This is a HUGE win for consumers!!! Effective Jan 21, 2015. #realestate
Kim Novak, Principal Broker & Owner l Novak Advantage Real Estate l (801) 726-1443 l firstname.lastname@example.org
NAR: National Association of Realtors Article:
Elimination of FHA “Prepayment Penalty”
By Sarah C. Young, Megan Booth
August 29, 2014
On August 26, 2014, the Federal Housing Administration (FHA) issued its final rule to eliminate post-payment interest charges on FHA-insured single family mortgages. NAR has urged FHA and Ginnie Mae to remove this prepayment penalty for years as the policy placed an unreasonable burden on consumers who already face high housing and closing costs. Conventional loans, as well as loans from the Veterans Administration’s Loan Guaranty Program and the U.S. Department of Agriculture’s Rural Housing Service loan program, do not have post-payment interest charges. The policy change will prohibit mortgagees from charging borrowers interest on their home mortgages after a principal balance pay-off. The final rule will go into effect on January 21, 2015.