Penalty Clause

Definition:   a provision in a mortgage that requires the borrower to pay a penalty in money if the mortgage payments are made in advance of the normal due date or if the mortgage is paid in full ahead of schedule

Pronunciation:   \ˈpe-nəl-tē\ \ˈklȯz\

Used in a Sentence:   We chose a mortgage without a penalty clause because we planned on paying it off early.

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