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To: EL KABONG!!! who wrote (33676)	5/14/2003 3:24:45 AM
From: smolejv@gmx.net	Read Replies (1) \| Respond to of 74559

I understand "prepayment clause" as the mortgagee's right to pay down on the principal under conditions to be agreed upon (max once a year, not more than x % of principal etc). In other words I dont get the meaning of "Lenders that insist upon the clause would find themselves at a competitive disadvantage with other lenders." Why would a lender insist?! What's their side of the story? Could it be that by accepting the prepayment clause you abrogate your right to terminate the contract at your convenience? In Germany there's no "easy option of simply going to another lender." before the end of the (5, or 10 year for instance) period. I mean, it is possible but you pay through your nose and as far as I can see nobody does it (Or maybe I am just an real-estate illiterate) For instance you have to pay up when selling, which probably goes by unnoticed elsewhere (like CDN or US) because it does not cost anything or at least not as much as here. Plus, mtg interest on the residence is not tax-deductible - reasonable from the state point of view, because, as opposed to rental property, it's not some cost incurred to create (taxable) new income.