What is a demand feature? What does it mean if the demand feature is checked off on my Closing Disclosure
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The Closing Disclosure has a statement that reads "Your loan has a demand feature," which is checked "yes" or "no." A demand feature permits the lender to require early repayment of the loan.
If the demand feature is checked "yes," the lender can require that you immediately pay the entire loan balance (principal and interest) at or after the date set forth in the loan documents. The lender can make this demand on you for any reason or for no reason. Be sure to check your Closing Disclosure and promissory note for any demand features. Think carefully about whether you want to agree to a demand feature, ask for it to be removed, or seek out another mortgage lender. Most mortgage loans do not have a demand feature.
Note: You will not receive a Loan Estimate or Closing Disclosure if you are shopping for:
- A reverse mortgage
- A home equity line of credit (HELOC)
- A manufactured housing or mobile home loan not secured by real estate
- A subordinate loan through certain types of homebuyer assistance programs
For these kinds of loans, you should receive Truth-in-Lending disclosures. If you are shopping for a reverse mortgage, you will also receive a Good Faith Estimate (GFE) and a HUD-1 Settlement Statement.
Familiarize yourself with some of the key documents you will be signing so that you know what to look for when you get them.
If you have a problem with your mortgage, you should talk with your lender immediately. You can also submit a complaint to the CFPB online or by calling (855) 411-CFPB (2372).