Choosing a Pre-Payment Penalty?

Over the years lenders have developed numerous products and loan modifications which provide the opportunity for you, the borrower, to get the lowest rate possible in exchange for some type of offset such as security (as in short-term adjustable rate mortgages) freedom (2-5 year pre-payment penalties) or deferred expense (negative amortization loans, short-term teaser rate loans and interest only periods). These trade-offs that you make for that lower rate have varying levels of impact on your overall financial well being and your flexibility as a homeowner to respond to changing market conditions as well as changes in your life. In this series we are going to look at the mostly cons of choosing some of these loan modifications when deciding on new financing; as well as look at some real