Is there a prepayment penalty on an ARM – Adjustable Rate Mortgage in California?
Written By: admin on November 29, 2009
3 Comments
I know that there is no prepayment penalty on fixed rate mortgages in California. I’m looking to pay off my mortgage in the next 2 years and the rates on the 3/1 ARMs look excellent. But, a prepayment penalty may invalidate the savings.
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You are incorrect.
Whether there is a prepayment penalty depends on your specific loan. It has nothing to do with the state you are in or the type of loan you have, at least not in California.
You have to read your specific mortgage terms.
You need to read your mortgage contract. Pre-payment penalties are not illegal anywhere. Whether or not there is any sort of penalty is determined by your contract language.