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Florida Real Estate Course
Chapter 13
Florida Real Estate Practice Question
What is the specific purpose of a prepayment penalty clause in a mortgage agreement?
Answer choices
A
It allows the lender to demand the entire loan balance immediately if the property is sold to a new owner.
B
It charges the borrower a specific fee if they pay off the loan balance ahead of the scheduled maturity date.
C
It guarantees the borrower the right to pay off the debt early without incurring any additional fees or interest.
D
It penalizes the borrower by raising the interest rate if they miss more than two consecutive monthly payments.
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