{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/6.2-421.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/6.2-421.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/6.2-421.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/6.2-421.html"}],"law_id":76124,"edition_id":1,"section_id":76124,"structure_id":13385,"section_number":"6.2-421","catch_line":"Certain contracts to permit prepayment; amount of prepayment penalty","history":"1987, c. 622, \u00a7\u00a7 6.1-330.69, 6.1-330.81; 2010, c. 794.","full_text":"A\n\nFor the purpose of this section:1\n\n“First deed of trust” or “first mortgage” includes all deeds of trust and mortgages, and amendments thereto, that are made by the same grantor or mortgagor, secure notes held by the same holder, convey substantially the same real estate, and are superior to all other deeds of trust or mortgages on the real estate; and2\n\n“Real estate” includes a leasehold estate of not less than 25 years.B\n\nEvery loan contract, except as provided in subsection D, that is secured by a first deed of trust or first mortgage on real estate if the principal amount of the loan is less than $75,000, shall:1\n\nPermit the prepayment of the unpaid principal at any time; and2\n\nNot provide for a prepayment penalty in excess of one percent of the unpaid principal balance.C\n\nAny prepayment penalty provision in violation of subdivision B 2 shall be unenforceable as to the amount in excess of one percent of such balance.D\n\nThe provisions of:1\n\nSubsections B and C shall not apply to secured or unsecured notes evidencing installment sales contracts; and2\n\nSubdivision B 2 and subsection C shall not apply to any loan contract that is (i) subject to § 6.2-422 or 6.2-1409 or (ii) governmentally regulated as to prepayment privilege.","order_by":null,"text":{"0":{"id":273217,"text":"For the purpose of this section:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":273218,"text":"“First deed of trust” or “first mortgage” includes all deeds of trust and mortgages, and amendments thereto, that are made by the same grantor or mortgagor, secure notes held by the same holder, convey substantially the same real estate, and are superior to all other deeds of trust or mortgages on the real estate; and","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":273219,"text":"“Real estate” includes a leasehold estate of not less than 25 years.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"B"},"3":{"id":273220,"text":"Every loan contract, except as provided in subsection D, that is secured by a first deed of trust or first mortgage on real estate if the principal amount of the loan is less than $75,000, shall:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A2","next_prefix":"B1"},"4":{"id":273221,"text":"Permit the prepayment of the unpaid principal at any time; and","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"5":{"id":273222,"text":"Not provide for a prepayment penalty in excess of one percent of the unpaid principal balance.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"6":{"id":273223,"text":"Any prepayment penalty provision in violation of subdivision B 2 shall be unenforceable as to the amount in excess of one percent of such balance.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2","next_prefix":"D"},"7":{"id":273224,"text":"The provisions of:","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"D1"},"8":{"id":273225,"text":"Subsections B and C shall not apply to secured or unsecured notes evidencing installment sales contracts; and","type":"section","prefixes":["D","1"],"prefix":"1","entire_prefix":"D1","prefix_anchor":"D1","level":2,"prior_prefix":"D","next_prefix":"D2"},"9":{"id":273226,"text":"Subdivision B 2 and subsection C shall not apply to any loan contract that is (i) subject to § 6.2-422 or 6.2-1409 or (ii) governmentally regulated as to prepayment privilege.","type":"section","prefixes":["D","2"],"prefix":"2","entire_prefix":"D2","prefix_anchor":"D2","level":2,"prior_prefix":"D1"}},"ancestry":[{"id":13385,"edition_id":1,"name":"Loans Secured by Lien on Real Estate","identifier":"2","label":"article","depth":4,"order_by":1,"parent_id":12854,"metadata":{},"date_created":"2026-06-26 03:44:46","date_modified":"2026-06-26 03:44:46","permalink":{"id":263491,"object_type":"structure","relational_id":13385,"identifier":"2","token":"6.2\/I\/4\/2","url":"\/6.2\/I\/4\/2\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12854,"edition_id":1,"name":"Certain Lending Practices","identifier":"4","label":"chapter","depth":3,"order_by":1,"parent_id":12853,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263463,"object_type":"structure","relational_id":12854,"identifier":"4","token":"6.2\/I\/4","url":"\/6.2\/I\/4\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12853,"edition_id":1,"name":"General Provisions","identifier":"I","label":"subtitle","depth":2,"order_by":1,"parent_id":12852,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263251,"object_type":"structure","relational_id":12853,"identifier":"I","token":"6.2\/I","url":"\/6.2\/I\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12852,"edition_id":1,"name":"Financial Institutions and Services","identifier":"6.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:56","date_modified":"2026-06-26 03:43:56","permalink":{"id":263249,"object_type":"structure","relational_id":12852,"identifier":"6.2","token":"6.2","url":"\/6.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":68627,"structure_id":13385,"section_number":"6.2-406","catch_line":"Disclosure of terms of mortgage application","url":"\/6.2-406\/","token":"6.2\/I\/4\/2\/6.2-406","metadata":false},{"id":76659,"structure_id":13385,"section_number":"6.2-407","catch_line":"Lenders to furnish borrower with copy of appraisal","url":"\/6.2-407\/","token":"6.2\/I\/4\/2\/6.2-407","metadata":false},{"id":73416,"structure_id":13385,"section_number":"6.2-408","catch_line":"Priority of interest on debts secured by mortgage or deed of trust","url":"\/6.2-408\/","token":"6.2\/I\/4\/2\/6.2-408","metadata":false},{"id":55630,"structure_id":13385,"section_number":"6.2-409","catch_line":"Addition of unpaid interest to principal balance","url":"\/6.2-409\/","token":"6.2\/I\/4\/2\/6.2-409","metadata":false},{"id":86582,"structure_id":13385,"section_number":"6.2-410","catch_line":"Borrowers not to be required to employ particular professionals","url":"\/6.2-410\/","token":"6.2\/I\/4\/2\/6.2-410","metadata":false},{"id":86576,"structure_id":13385,"section_number":"6.2-411","catch_line":"Requirements relating to insurance","url":"\/6.2-411\/","token":"6.2\/I\/4\/2\/6.2-411","metadata":false},{"id":75246,"structure_id":13385,"section_number":"6.2-412","catch_line":"Insurance coverage under certain loans not to exceed replacement value of improvements","url":"\/6.2-412\/","token":"6.2\/I\/4\/2\/6.2-412","metadata":false},{"id":79804,"structure_id":13385,"section_number":"6.2-413","catch_line":"Obligation of lender to reimburse unused mortgage guaranty insurance premiums","url":"\/6.2-413\/","token":"6.2\/I\/4\/2\/6.2-413","metadata":false},{"id":70580,"structure_id":13385,"section_number":"6.2-414","catch_line":"Obligation of person maintaining escrow account to pay taxes and insurance; penalties","url":"\/6.2-414\/","token":"6.2\/I\/4\/2\/6.2-414","metadata":false},{"id":84302,"structure_id":13385,"section_number":"6.2-415","catch_line":"Lender not to cancel insurance policy at time of refinancing under certain circumstances","url":"\/6.2-415\/","token":"6.2\/I\/4\/2\/6.2-415","metadata":false},{"id":59737,"structure_id":13385,"section_number":"6.2-416","catch_line":"Certain mortgages not to prohibit further encumbrance of real property","url":"\/6.2-416\/","token":"6.2\/I\/4\/2\/6.2-416","metadata":false},{"id":72706,"structure_id":13385,"section_number":"6.2-417","catch_line":"Mortgage or deed of trust to contain notice that debt is subject to call or modification on conveyance of property","url":"\/6.2-417\/","token":"6.2\/I\/4\/2\/6.2-417","metadata":false},{"id":81416,"structure_id":13385,"section_number":"6.2-418","catch_line":"Property owner entitled to written statement of payoff amount","url":"\/6.2-418\/","token":"6.2\/I\/4\/2\/6.2-418","metadata":false},{"id":76947,"structure_id":13385,"section_number":"6.2-419","catch_line":"Disclosure of terms of assumption","url":"\/6.2-419\/","token":"6.2\/I\/4\/2\/6.2-419","metadata":false},{"id":82644,"structure_id":13385,"section_number":"6.2-420","catch_line":"Prepayment penalty not to be collected in certain circumstances","url":"\/6.2-420\/","token":"6.2\/I\/4\/2\/6.2-420","metadata":false},{"id":76124,"structure_id":13385,"section_number":"6.2-421","catch_line":"Certain contracts to permit prepayment; amount of prepayment penalty","url":"\/6.2-421\/","token":"6.2\/I\/4\/2\/6.2-421","metadata":false},{"id":54357,"structure_id":13385,"section_number":"6.2-422","catch_line":"Prepayment penalty for loan secured by home occupied by borrower","url":"\/6.2-422\/","token":"6.2\/I\/4\/2\/6.2-422","metadata":false},{"id":61310,"structure_id":13385,"section_number":"6.2-423","catch_line":"Prepayment of loans secured by certain subordinate mortgages or deeds of trust; rebates for unearned interest","url":"\/6.2-423\/","token":"6.2\/I\/4\/2\/6.2-423","metadata":false}],"previous_section":{"id":82644,"structure_id":13385,"section_number":"6.2-420","catch_line":"Prepayment penalty not to be collected in certain circumstances","url":"\/6.2-420\/","token":"6.2\/I\/4\/2\/6.2-420","metadata":false},"next_section":{"id":54357,"structure_id":13385,"section_number":"6.2-422","catch_line":"Prepayment penalty for loan secured by home occupied by borrower","url":"\/6.2-422\/","token":"6.2\/I\/4\/2\/6.2-422","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/6.2-421\/","history_text":"

This law was first created in 1987. The record of its establishment is cataloged in chapter 622 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1987 \u201cActs\u201d aren\u2019t available online. It has been modified 1 time. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. That modification is as follows: in 2010, chapter 794<\/a>.<\/p>","references":false,"refers_to":[{"id":78712,"section_number":"6.2-1409","catch_line":"Prepayment by borrower from association; rebates for unearned interest; prepayment penalty","order_by":null,"url":"\/6.2-1409\/"},{"id":54357,"section_number":"6.2-422","catch_line":"Prepayment penalty for loan secured by home occupied by borrower","order_by":null,"url":"\/6.2-422\/"}],"permalink":{"id":263553,"object_type":"law","relational_id":76124,"identifier":"6.2-421","token":"6.2\/I\/4\/2\/6.2-421","url":"\/6.2-421\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/6.2-421\/","token":"6.2\/I\/4\/2\/6.2-421","dublin_core":{"Title":"Certain contracts to permit prepayment; amount of prepayment penalty","Type":"Text","Format":"text\/html","Identifier":"\u00a7 6.2-421","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> For the purpose of this section: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> “First deed of trust<\/span>” or “first mortgage<\/span>” includes all deeds of trust and mortgages, and amendments thereto, that are made by the same grantor or mortgagor, secure notes held by the same holder, convey substantially the same real estate<\/span>, and are superior to all other deeds of trust or mortgages on the real estate<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> “Real estate<\/span>” includes a leasehold estate of not less than 25 years. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Every loan contract<\/span>, except as provided in subsection D, that is secured by a first deed of trust<\/span> or first mortgage<\/span> on real estate<\/span> if the principal amount of the loan is less than $75,000, shall: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Permit the prepayment of the unpaid principal at any time; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Not provide for a prepayment penalty<\/span> in excess of one percent of the unpaid principal balance. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Any prepayment penalty<\/span> provision in violation of subdivision B 2 shall be unenforceable as to the amount in excess of one percent of such balance. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The provisions of: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Subsections B and C shall not apply to secured or unsecured notes evidencing installment sales contracts<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Subdivision B 2 and subsection C shall not apply to any loan contract<\/span> that is (i) subject to § 6.2-422<\/a> or 6.2-1409<\/a> or (ii) governmentally regulated as to prepayment privilege<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCERTAIN CONTRACTS TO PERMIT PREPAYMENT; AMOUNT OF PREPAYMENT PENALTY (\u00a7\n6.2-421)\n\nA. For the purpose of this section:\n\n 1. “First deed of trust” or “first mortgage” includes\n all deeds of trust and mortgages, and amendments thereto, that are made by the\n same grantor or mortgagor, secure notes held by the same holder, convey\n substantially the same real estate, and are superior to all other deeds of\n trust or mortgages on the real estate; and\n\n 2. “Real estate” includes a leasehold estate of not less than 25\n years.\n\nB. Every loan contract, except as provided in subsection D, that is secured by a\nfirst deed of trust or first mortgage on real estate if the principal amount of\nthe loan is less than $75,000, shall:\n\n 1. Permit the prepayment of the unpaid principal at any time; and\n\n 2. Not provide for a prepayment penalty in excess of one percent of the unpaid\n principal balance.\n\nC. Any prepayment penalty provision in violation of subdivision B 2 shall be\nunenforceable as to the amount in excess of one percent of such balance.\n\nD. The provisions of:\n\n 1. Subsections B and C shall not apply to secured or unsecured notes\n evidencing installment sales contracts; and\n\n 2. Subdivision B 2 and subsection C shall not apply to any loan contract that\n is (i) subject to § 6.2-422 or 6.2-1409 or (ii) governmentally regulated\n as to prepayment privilege.\n\nHISTORY: 1987, c. 622, \u00a7\u00a7 6.1-330.69, 6.1-330.81; 2010, c. 794.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}