That time a bridge loan's fine print ate my closing costs

I was sitting in a title office in Nashville, watching the closer flip through 40 pages of a bridge loan docs and found a 2.5% prepayment penalty hidden on page 27, so I called my lender right there and made them waive it before I signed anything - has anyone else caught a sneaky fee like that buried in their loan paperwork?

3 comments

3 Comments

emery_young132d ago

Bridge loans are notorious for hiding prepayment penalties in the fine print, always check pages 25-30 before you sign anything. A lot of times they stick that clause in the miscellaneous fees section to blend in with the other numbers. Calling the lender out right there in the title office works well too, they usually bend if you catch it before closing. I started making lenders send me the entire fee schedule broken out line by line upfront, not just the estimate.

keith_rodriguez7h ago

Your buddy's story about the three grand is rough but it makes you wonder why title companies don't flag these penalties for the buyer since they're the ones running the numbers anyway. I had a title officer once tell me off the record that they see these clauses all the time but legally they can't step in unless the buyer asks. Makes you think they should be required to point out anything over a certain dollar amount in penalties before anyone sits down to sign.

kelly_west742d ago

My buddy got burned on this exact thing last year. He signed for a bridge loan and didn't catch the prepayment penalty until he tried to pay it off early, cost him an extra three grand. Now he reads every single page like a detective before he signs anything.