If your loan program has a pre-payment penalty or you elect to add a pre-payment penalty to receive a lower rate, the section on the Truth-In-Lending Disclosure near the bottom of the form will have a check mark indicating you may be subject to a pre-payment penalty. If your loan does not have a pre-payment penalty, the box indicating you will not be subject to a pre-payment penalty will be marked. One of the two boxes will have an X indicating your loan pre-payment option. You will sign a final Truth-In-Lending form at your closing appointment. Please review that disclosure to make sure no changes to the Pre-Payment penalty option has occurred. The Truth In Lending Disclosure Statement is neither a contract nor a commitment to lend. Your loan officer or mortgage broker is required to provide you with the Truth in Lending Disclosure Statement within three business days of the date that you apply for your loan. Truth in lending disclosure statements vary from lender to lender.

Toward the bottom, there are several categories of services on your statement. Again, these vary from lender to lender. Be sure to ask about the sections that are checked before you sign. You should be aware that in order to charge a prepayment penalty on an alternative type of mortgage (ARM or Balloon) it needs to be disclosed to the borrower on the Mortgage Note in the section "Borrowers Right to Repay." This section of the Mortgage Note will explain whether there is or is not a prepayment and how the amount of the penalty is calculated. The disclosure of a prepayment penalty can be also found in the Truth-in-Lending statement required by federal law to be sent to a borrower during the application process. This document will have a section titled "Prepayment" and indicate whether you may or will not have to pay a penalty if the loan is paid off early.