Legal Question in Real Estate Law in California

Re: pre-payment penalties

Since 1/1/76 principal and interest on a loan for a single family owner-occupied property can be prepaid. A penalty is permissible if the prepayment is within five years, or seven years if a loan broker was responsible for the loan. The penalty cannot exceed six months interest.

Further, up to 20% of such a loan is exempt; only the prepayment in excess of 20% of the original principal is subject to penalty.

So, the answer can be five or seven, depending upon whether a loan broker was used.