Originally Posted by sperbonzo

You are correct in some ways. If you try to prepay by refinancing BEFORE the 2 year adjustment, then you will pay a penalty. The trick is too pay at least one month at the higher adjusted rate, THEN refi.

As for not getting back on track financially, this is not the fault of the lenders, it is the fault of the people getting the loans that don't get their crap together.

If Forest was to REALLY work on fixing his credit, and then paid one month into his higher adjusted rate after two years, he could make this work, refinance, and fix his situation. If he waits another year to fix things, the housing prices in this area will be SKY HIGH and it will be much harder for him to afford anything.