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Are prepayment penalties for mortgages normal?
Fannie Mae and Freddie Mac uniform loans do not have prepayment penalties, so most plain-vanilla loans from national banks and brokers shouldn't have the penalty.  (Fannie Mae rules are categorical; Freddie Mac will buy loans with prepayment if the loan originator documents that a loan without prepayment was offered and the borrower made the choice for other considerations; the uniform instrument they share conforms to the more restrictive rules) "Mortgage loans subject to prepayment penalties will be ineligible for sale to Fannie Mae" Fascinating historical discussion of how the two GSEs negotiated the compromise uniform form back in 1975 Exotic terms, subprime, jumbo loans, ARMs, construction loans, secondary loans or really local banks where they'll hold the loan are cases where there might be a prepayment penalty.