Prepayment Penalty Loans containing prepayment penalty clauses allow a lender to collect extra money from the home owner if the loan is prepaid above a certain percentage. (winutah.com)
For example, prepayment penalty clause can be very important if you are planning to sell your house or refinance in the next 3 - 5 years, or if you expect to prepay your loan. (mortgage-x.com)
DO NOT sign a mortgage agreement that contains a prepayment penalty clause! (thecollegeinvestor.com)