Q: Do you know where I may find a list of states which allow prepayment penalties?

I understand that prepayment penalties are not allowed on fixed rate mortgages in some states, but that each state has different laws in regard to being allowed to charge a prepayment penalty on adjustable loans.

A: Most federally-chartered lenders will offer prepayment penalty-loans even if they’re in a state that prohibits them. They claim they do not have to follow the states’ rules because they’re federally chartered.

If you’re looking for a loan with a prepayment penalty, try the local branches of federally-chartered lenders, including federal savings banks.

I’m not sure why you want to have a loan with a prepayment penalty. I’d rather see you get an adjustable rate loan that carries a lower rate than a prepayment penalty loan that locks you in for several years.

Feb. 28, 2001.