Beginning Thursday, January 17, 2019, Carrington Mortgage Services, LLC (CMS) will permit prepayment penalties to be charged on Investor Advantage, Carrington Flexible Advantage and Carrington Flexible Advantage Plus non-owner-occupied, investment property loan transactions. Prepayment penalties may only be charged when permissible by State law. The prepayment term may be three years, two years, one year or no prepay.
The Base Price is improved to reflect the three-year Prepayment Penalty.
Borrowers can opt for a two-year, one-year, or Buy Out the Prepayment Penalty by adjusting the price as shown on the Rate Sheet.
Prepayment Penalties are prohibited in Alaska, Delaware, Illinois, North Carolina, New Jersey, Vermont, Virginia, West Virginia and Wisconsin.
The following disclosure requirements apply to loans with a prepayment penalty:
State Specific Requirements
State |
Prepayment Requirements |
Maryland |
Permissible for loan amounts greater than $75,000 but subject to the same limitations prior to June 1, 2008 (see below) Prior to June 1, 2008: Permissible on loans with interest rate of 8% or less within the first 36 months (3 years) not to exceed 2 months’ advance interest on the aggregate amount of all prepayments made in any 12-month period in excess of 1/3 of the original loan amount. |
Minnesota |
Loan Amount must exceed Conforming Loan Limits |
Ohio |
Permissible for loan amounts greater than $89,261 (as of 01/01/2018) within the first 60 MONTHS. Penalty may not exceed 1% of the original loan amount. PROHIBITED (on 1st and 2nd liens): · If refinanced is made by the same lender or an assignee. · If loan is paid off in full as a result of sale of the property. · If loan is paid off in full using the borrower’s life insurance proceeds or proceeds from a property insurance claim. |
Refer to the Investor Advantage Program and Carrington Flexible Advantage Program guidelines and matrices for the applicable prepayment penalty requirements.
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Government Agency Approval | FHA Non-Supervised Mortgage Approval #: 24751-0000-5 | VA Automatic Lender Approval #: 902324-00-00