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To: smolejv@gmx.net who wrote (33672)	5/14/2003 3:07:18 AM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 74559

Hi DJ, What I meant was that if the lender I was bargaining with insisted upon having a prepayment clause in the mortgage, I would simply find another lender that didn't stipulate that requirement. In the USA, there are literally tens of thousands of lenders (wild a$$ guess), so it's a relatively easy task to find a lender where both parties can agree upon the terms of the mortgage. In years gone by, virtually all lenders routinely inserted prepayment clauses in their mortgages. My parents had such a clause in their 25 year mortgage some 40 odd years ago now. But as competition escalated, the prepayment clause has largely fallen by the wayside. Lenders that insist upon the clause would find themselves at a competitive disadvantage with other lenders. So, about the only instances where one will likely see those clauses anymore is either in very old mortgages (like in the 27th year of a 30 year mortgage) or in a credit risk situation, where the borrower doesn't have the easy option of simply going to another lender. A credit risk situation could be either a mortgagee with a bad credit history, or a mortgage on an asset where the underlying property entails some risks (say a fixer-upper home where the loan amount exceeds the current fair market value of the property)... As for why I wouldn't accept a mortgage with a prepayment clause... That's because at some future point in time I might want to refinance were it advantageous to me to do so, like if interest rates went down. Or, I might simply want to retire my mortgage because not paying interest on a mortgage gives me a bigger return on my money than say an investment in a 1% money market fund, or a 1.1% savings passbook rate or a potential loss in the equities or bond markets... I want to keep all of my options open as a borrower. If I am a good credit risk, pay my obligations on time and in full, then I think I have a right to expect to be able to negotiate the terms of my mortgage with my lender. Would I be wrong to infer from your posts that perhaps mortgages are handled somewhat differently in Germany? KJC