Iowa Code 528.4 – Prepayment penalty prohibited
Current as of: 2023 | Check for updates
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Terms Used In Iowa Code 528.4
- Alternative mortgage loan: means a mortgage loan which is a reverse annuity mortgage loan or graduated payment mortgage loan. See Iowa Code 528.2
- Financial institution: means financial institution as defined in section 535A. See Iowa Code 528.2
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Mortgagor: The person who pledges property to a creditor as collateral for a loan and who receives the money.
A financial institution making an alternative mortgage loan may contract with the mortgagor for interest to be paid currently or to accrue, and if accrued, for accrued interest to be added to the mortgage debt on which interest may be charged and collected. Accrued interest which is added to the mortgage debt shall be secured by the mortgage to the same extent as the principal of the alternative mortgage loan. An instrument evidencing an alternative mortgage loan shall not contain a provision imposing a penalty for prepayment of the loan.