“A closed mortgage is one that cannot be prepaid, renegotiated, or refinanced before the end of the term without paying a prepayment charge.”
tbh im not really understanding what this is. What prepayment charge? And why not prepaid?
And for port mortages what is the purpose of switching over to the morgtage from orgin to destination?
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If you’re a lender on a mortgage, you expect to make a certain amount of money on the interest paid on that loan over its lifetime. However, if the borrower pays it off early, then the lender stops getting interest, and it loses what it was expecting under the loan agreement. A prepayment penalty ensures that the lender is going to get what it was originally expecting under the loan.
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