Legal Question in Real Estate Law in Illinois
residential mortgage interest
Can a mortgage lender charge a prepayment penalty on a residential mortgage in Illinois? Does it make a difference if the interest is a fixed or adjustable rate in relation to a prepayment penalty?
Asked on 2/02/00, 11:04 am
1 Answer from Attorneys
Thomas Moens
Moens Law Offices, Chartered
Re: residential mortgage interest
Yes, if the note allows for it. While many states have law prohibiting prepayment penalties, there is a federal statute which supercedes state statutes allowing lenders to charge prepayment penalties. It makes no difference if it is a fixed or adjustable.
Answered on 2/03/00, 8:59 am
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