Legal Question in Real Estate Law in Florida

Re: Prepayment penalty

If no amount is specified I would not pay it.

Re: Prepayment penalty

It should be stated on the Promissory Note you signed when you closed on the purchase of the property or refinancing of your mortgage loan. Read it and it should be there. If you do not have a copy, request one in writing from your lender. Your lender should have the original Note and the law firm or title company that did the deal may also have a copy of the Note in its files.

Re: Prepayment penalty

NOTE: This communication is not intended as and should not be interpreted as legal advice. Rather, it is intended solely as a general discussion of legal principles. You should not rely on or take action based on this communication without first presenting ALL relevant details to a competent attorney in your jurisdiction and then receiving the attorney's individualized advice for you. By reading the "Response" to your question or comment, you agree that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then you are instructed to stop here, and do not read any further.

As an attorney who handles many real estate closings, I have yet to see a mortgage that has a prepayment penalty that is not set forth in either the Promissory Note or the Mortgage. It may be included as a Rider. The clauses often state a specific amount, an amount equal to a percentage of the unpaid balance or an amount equal to 6 months interest on the unpaid balance.

I strongly suggest that you meet with a real estate attorney in your area to review these documents and answer your specific legal questions.

Scott R. Jay, Esq. 305-249-8000