On Mon, 06 Jun 2011 08:05:37 -0400, Kurt Ullman wrote:

In article ,
" wrote:


There also may be a pre-payment penalty. These are normally used to recapture
paid (financed) closing costs. There may be a substantial penalty for paying
more than, say, 1/5 of the mortgage in a given year for the first five years
of a mortgage (or some such numbers).

That isn't a prepayment penalty, though. That is merely paying what
you owed for services rendered. If you had paid those ahead of time
(which is the bright thing to do since they charge interest on these
over the term of mortgage otherwise) there would have been no additional
charges. Pure prepayment penalities are illegal and have been since at
least the mid-70s since I have prepaid through all of my houses.

It may not technically be a "prepayment penalty", but that's what it has been
called. Financing closing costs might not be an awful thing to do, 1) if
there is no other way to refinance, or 2) you don't plan on being in the house
longer than... At that point it's a numbers game. That's what the
"prepayment penalty" above is all about, of course.

I don't view this as being a bad thing, just part of the cost of the
house, like the shingles (grin). Now LETTING you take 30 years to pay
off the closing costs with interest..

Again, I don't see this being the worst thing that could happen.

Congrats on paying off your house. I look forward to that feeling!