Four Things to Understand About Prepayment Penalties by John Steely If you have a mortgage, of any type, many people will give you the advice to make extra payments on the mortgage in order to pay off the mortgage that much sooner. Indeed, depending on the interest rate of the mortgage, making extra payments has a return in line with the best money market accounts. And you get debt free that much sooner. Whether or not you should pay extra on your mortgage depends on many factors, and there are many articles written about doing that; one of the factors involved is whether there are prepayment penalties in your mortgage or not.So, if you are going to make an informed decision about paying off your mortgage early, whether through extra payments or through refinancing your mortgage (which mortgage companies would love for you to do), you need to understand what prepayment penalties are, how they work, and why do they exist.Types of Prepayment PenaltiesIf your mortgage has prep ... Read more »