Yeah, I've noticed that too lately—seems like they're quietly making a comeback. A few things I've picked up on recently:
- Early payoff penalties are definitely not as common as they used to be, but they're still out there, especially with certain online lenders or smaller institutions.
- Sometimes they're buried pretty deep in the fine print, labeled as "prepayment penalties" or "early termination fees." Sneaky wording can make them easy to overlook.
- Usually, these penalties apply if you refinance or pay off the loan within the first 2-3 years. After that, you're typically in the clear.
- It's worth noting that some states have stricter regulations against these penalties, so it might depend on where you live.
When I refinanced last year, I specifically asked about this upfront and made sure to get it in writing. Saved me from any unpleasant surprises later on...
"Sometimes they're buried pretty deep in the fine print, labeled as 'prepayment penalties' or 'early termination fees.' Sneaky wording can make them easy to overlook."
Yeah, that's exactly what happened to my cousin last year. He refinanced with one of those online lenders because the rates looked great, but he totally missed the early termination fee buried in the fine print. Ended up costing him a decent chunk when he decided to refinance again after rates dropped even lower.
Makes me wonder though—do you think lenders offering shorter-term loans (like 15-year vs. 30-year) are more likely to include these penalties? Or is it more about the type of lender rather than the loan term itself? I've been considering refinancing myself, and now I'm definitely gonna double-check everything before signing anything...
