Can you pay off a mortgage early if the note doesn’t contain any language prohibiting it?

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Can you pay off a mortgage early if the note doesn’t contain any language prohibiting it?

Elderly former owner is the note holder; note has 5.5 years remaining to be paid off in full (on a 15 year amort, 7.25% loan). The Note doesn’t contain any language except for assumption of the loan. I want to pay it off. The note holder doesn’t want me to and says I can’t.

Asked on July 10, 2011 under Real Estate Law, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Generally speaking, most mortgages do not have any prohibition in them about accelerating the mortgage and paying off the debt.  So if the mortgage here does not containt a pre-payment penalty clause then you should be fine.  Now, from what I can gleam from the question the former owner held the mortgage and is being paid monthly, correct, and she is stating that you can not pay it off why?  Because paying it off early cuts down on her income probably as it cuts down on the amount you have to pay back.  But I think that you have every right to do so.  I would take it to an attorney to review and to handle at this point in time.  Otherwise you may not get the satisfaction that you need to file to show it is a paid debt.  Good luck.


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