In North Carolina, a prepayment penalty cannot be imposed if:

In North Carolina, the law states that a prepayment penalty cannot be imposed on loans with a principal amount of less than $150,000. This regulation is designed to protect consumers, particularly first-time homebuyers or those seeking smaller loans, by ensuring they are not penalized for paying off their mortgage early. Prepayment penalties can limit a borrower's ability to refinance or pay off their loan ahead of schedule, which can lead to financial strain. Thus, the threshold of $150,000 establishes a consumer-friendly policy aimed at promoting flexibility and reducing barriers for smaller loan amounts.

The other options relate to conditions that do not necessarily affect prepayment penalties under the North Carolina law. For example, a credit score below 600 does not automatically eliminate the possibility of imposing a prepayment penalty, nor does it provide a basis for charging one. Similarly, loan terms of less than 10 years and pre-agreements do not meet the criteria set forth in the relevant state legislation regarding prepayment penalties. The specific stipulation regarding the loan amount is a clear and straightforward rule designed to protect smaller borrowers in the mortgage market.