What are the typical pre-payment privileges?
Generally, pre-payment privileges allow you to do two things: • Increase your monthly payment by a certain percentage (normally 15%-20%). You can’t, however, decrease your payments once you’ve increased them. • Pay a certain percentage of your principal per year (normally 15%-20%). • Depending upon the mortgage product, some lenders also allow you to “double-up” mortgage payments, or double your mortgage payment for just that month. Increasing your monthly payments or doubling-up cannot exceed the annual percentage of your principal you’re allowed to pay down.
