Be sure you have a prepayment penalty by sifting through your stack of mortgage papers. "It usually says ‘prepayment disclosure’ or ‘prepayment penalty disclosure,’" says Glink.
Prepayment Penalty. By Investopedia Staff. A prepayment penalty is a clause in a mortgage contract stating that a penalty will be assessed if the mortgage is paid down or paid off within a certain time period. The penalty is based on a percentage of the remaining mortgage balance or a certain number of months’ worth of interest.
6.2-422. Prepayment penalty for loan secured by home occupied. – The prepayment penalty in the case of a loan secured by a mortgage or deed of. by a borrower shall not exceed two percent of the amount of such prepayment.