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Are Prepayment penalties on mortgages legal in North Carolina?

April 26, 2017Business Estate Finance mortgages north carolina penalties prepayment renting

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Are Prepayment penalties on mortgages legal in North Carolina?

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Yes, they are legal, and they are now very commonplace, as opposed to a few years back. Lenders started adding prepayment penalties to mortgages when substantial numbers of borrowers were taking out mortgages and then refinancing rather shortly after taking the initial mortgage. Lenders discovered that the costs they were incurring to initiate and complete the mortgage were larger than the profits they were receiving on those very short duration mortgages.