Backing out of a mortgage refi

[(former)FormerSanDiegan]

[quote=teaboy]OK, so I just signed my refinance closing docs and one of the docs I signed reads:
The refinance loan or purchase loan with Bank/Investor is at No prepayment penalty. However, Bank/Investor or
its successor lender requires the borrower to stay with them for 190 days before they can refinance with other banks.
The borrower has to pay 5 (five) full payments to the new investor after the close of the transaction. If borrowers
choose to pay off the remaining balance or sell the subject property within 190 days, the borrowers have the liability
to pay 2.0% penalty of the loan amount.

I dont remember seeing this the last time I refinanced, which was less than 190 days ago…
Is this typical or even legal? If so, I should probably use my right to cancel…
Help!

tb[/quote]

To me all the words after “No prepayment penalty” are describing a pre-payment penalty. So if this clause is legal it is essentially equivalent in all cases to a pre-payment penalty, with the exception (I guess) of simply paying it off in full with proceeds from anything other than a refinance or sale.

[teaboy]

I would prefer not to cancel this closing as it’s at a good rate.
However, if this refi causes me to be liable for a penalty on my current loan then I will cancel this refi.

I pored over the closing documents of my current loan and could not find a similar
However, when I emailed the broker of my current loan to check if there is such a penalty, he said yes there was a penalty for prepayments within the first 6 months or 6 payments. But the guy I talked to doesn’t know where in the fine print of the closing docs this is written.

Is this kind of sneaky prepayment penalty typical, then? If so, where is it written? On the Note? Or on a separate doc, like with my pending refi?

tb

[teaboy]

I would prefer not to cancel this closing as it’s at a good rate.
However, if this refi causes me to be liable for a penalty on my current loan then I will cancel this refi.

I pored over the closing documents of my current loan and could not find a similar
However, when I emailed the broker of my current loan to check if there is such a penalty, he said yes there was a penalty for prepayments within the first 6 months or 6 payments. But the guy I talked to doesn’t know where in the fine print of the closing docs this is written.

Is this kind of sneaky prepayment penalty typical, then? If so, where is it written? On the Note? Or on a separate doc, like with my pending refi?

tb

[teaboy]

I would prefer not to cancel this closing as it’s at a good rate.
However, if this refi causes me to be liable for a penalty on my current loan then I will cancel this refi.

I pored over the closing documents of my current loan and could not find a similar
However, when I emailed the broker of my current loan to check if there is such a penalty, he said yes there was a penalty for prepayments within the first 6 months or 6 payments. But the guy I talked to doesn’t know where in the fine print of the closing docs this is written.

Is this kind of sneaky prepayment penalty typical, then? If so, where is it written? On the Note? Or on a separate doc, like with my pending refi?

tb

[teaboy]

I would prefer not to cancel this closing as it’s at a good rate.
However, if this refi causes me to be liable for a penalty on my current loan then I will cancel this refi.

I pored over the closing documents of my current loan and could not find a similar
However, when I emailed the broker of my current loan to check if there is such a penalty, he said yes there was a penalty for prepayments within the first 6 months or 6 payments. But the guy I talked to doesn’t know where in the fine print of the closing docs this is written.

Is this kind of sneaky prepayment penalty typical, then? If so, where is it written? On the Note? Or on a separate doc, like with my pending refi?

tb

[teaboy]

I would prefer not to cancel this closing as it’s at a good rate.
However, if this refi causes me to be liable for a penalty on my current loan then I will cancel this refi.

I pored over the closing documents of my current loan and could not find a similar
However, when I emailed the broker of my current loan to check if there is such a penalty, he said yes there was a penalty for prepayments within the first 6 months or 6 payments. But the guy I talked to doesn’t know where in the fine print of the closing docs this is written.

Is this kind of sneaky prepayment penalty typical, then? If so, where is it written? On the Note? Or on a separate doc, like with my pending refi?

tb

[Coronita]

chalk this one up as a lesson learned, i think.

[Coronita]

chalk this one up as a lesson learned, i think.

[Coronita]

chalk this one up as a lesson learned, i think.

[Coronita]

chalk this one up as a lesson learned, i think.

[Coronita]

chalk this one up as a lesson learned, i think.

[teaboy]

Had I learned anything yet, then i probably would.
But I’m very little the wiser right now.

I’m thinking of going ahead with my second sequential refi within 2 months. Unless someone can help me understand this better.

All this Truth In Lending stuff and I’d still feel that things could be much more transparent…

Anyone know more about this?

tb

[teaboy]

Had I learned anything yet, then i probably would.
But I’m very little the wiser right now.

I’m thinking of going ahead with my second sequential refi within 2 months. Unless someone can help me understand this better.

All this Truth In Lending stuff and I’d still feel that things could be much more transparent…

Anyone know more about this?

tb

[teaboy]

Had I learned anything yet, then i probably would.
But I’m very little the wiser right now.

I’m thinking of going ahead with my second sequential refi within 2 months. Unless someone can help me understand this better.

All this Truth In Lending stuff and I’d still feel that things could be much more transparent…

Anyone know more about this?

tb

[teaboy]

Had I learned anything yet, then i probably would.
But I’m very little the wiser right now.

I’m thinking of going ahead with my second sequential refi within 2 months. Unless someone can help me understand this better.

All this Truth In Lending stuff and I’d still feel that things could be much more transparent…

Anyone know more about this?

tb

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