prepayment penalties by state? are there limits?

[mlm04]

What is the name of your state? Washington.

I am in Washington State and recently bought a home. I am considering refinancing my second mortgage but would like to know if Washington State has a maximum limit on prepayment penalties? If so, how does that work? Is it by State where the property is or based on the terms of my loan?

Thanks!

 

[MortgageGuru]

Is it by State where the property is or based on the terms of my loan?

I don't think Washington has restrictions on pre-payment penalties on second mortgages but I could be wrong on that. Also depends on the Lender and the type of License they have. Industry standard is 6 months worth of interest. Some states restrict it altogether on 2nd mortgages. Read the pre-payment penalty rider to the note for your mortgage. It will tell you very clearly what the penalty is.