[quote=FormerSanDiegan]A prepayment penalty essentially prevents someone from refinancing during the penalty period. It’s not really a moot point for those whose loans were going to reset and who could have locked into a low fixed rate.
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That’s correct…But I was referring to this particular case in this particular point in time for getting new loans right now (which I assume the OP would be doing a fixed rate loan). That 3 year penalty (if it’s the bank that I think it is) I believe is something that they recently did, because if it’s the same bank as before, clearly this wasn’t one of the terms a few years back when people were getting ARMS. Those people, probably already already beyond 3 years even if that clause existed….Anyone who gets an ARM right now and who can’t otherwise purchase with a fixed rate right now is just asking for it imho