Soft Prepayment Penalty - A "Soft" prepayment penalty indicates that the mortgaged property can "NOT" be refinanced during the set no-prepayment timeframe. However, it can be sold at any time without incurring a penalty. Legally, with a soft prepayment penalty, the mortgaged property could be sold at any time after the loan has closed. And, there would be no prepayment penalty at all.In many cases a loan with a "Hard" prepayment penalty has a lower rate than similat loan with a "Soft" prepayment penaly.
Soft Prepayment Penalties are less restrictive than Hard Prepayment Penalties because they allow you to sell your home without incurring a penalty.
There are different types of 100% loans. You can
either get 1 loan for 100% or an "80/20" loan. Speak to your mortgage
professional to see which program is best for you!
