Pre-payment Addendum at closing

[Rugrats]

What is the name of your state? Kentucky

I bought a house in 3/06 and we have put major money into fixing it up and adding on to the house. We have almost completed the process. We want to refinance so that we will have more funds to get the rest done now instead of waiting another 6-12 months. the value of the house has increased by several thousadn due to the work we have done. My question is, if there was not a figure put in the blanks at closing for the prepayment addendum can they charge us a fee?

Example : the addendum reads " If I make a full prepayment within TWENTY-FOUR (24) months of the date of this Note, I agree to pay the Note Holder a Prepayment fee. The fee I will pay shall be an amount equal to _________ percent (______%) of the outstanding principal balance of this Note. I will not be obligated to pay a Prepayment fee if such a charge violates state of federal law."

There was never an amount put on the line at anytime before or during closing. What does this mean?

 

[seniorjudge]

Q: What does this mean?

A: My guess is that there is no prepayment penalty. But, ask your lender.

 

[Rugrats]

I am in the process of finding out from the lender this information. The thing is though, if they did not have a figure on the line when we signed the papers can they add that after we signed? That would be a cause to void the contract from what I understand. I also know that in real estate law it does not count unless it is in writting. So I honestly believe that there is not a prepayment fee since there was nothing put there. I need to know what card to play if the lender tells me there is one anyway.

 

[LindaP777]

To avoid problems, negotiate with your current lender for the new mortgage, or possibly a line of credit. They might be willing to work with you instead of against you.