This is a fee that is charged when you refinance a loan before the penalty period is up.

This fee can often be thousands of dollars.

Typically a pre-payment penalty is only charged in the first 3 years of a loan.

Some lenders will waive a pre-payment penalty if you refinance again with one of their loans.

You should read the fine print on the loan before you sign it.

You may be able to negotiate in no prepayment penalty, but this may cost you some money up front.

Not necessarily.

You should not assume that your bank will automatically give you the best possible rate of a mortgage.

You should shop around at least two or three other places to see if you're getting good rates and terms.

You should compare the interest rate and also the total costs.

Make sure that when you're comparing offers that they're the same type of loan.

For example, you can't directly compare a 30 year fixed from one company with a five year fixed loan from another company.

You should compare apples to apples.

The credit report will tell your mortgage lender a lot about you.

The report will show the current list of creditors, prior closed accounts, and any outstanding delinquent accounts.

Each account will show maximum available balance, current balance, the number of late payments, how many days late the payments were, etc.

The credit report will show many creditors, such as department store cards, credit cards, student loans, etc.

A mortgage lender will pay particular attention to any prior mortgages, and your track record in paying for these.

Other items that may show up on your credit report include a prior bankruptcy, employment, old addresses, etc.

You should make sure that you review your credit report on a regular basis.

Sometimes you may find errors on your credit report that you can fix. You need to provide proof to the credit bureaus to have them up update your credit report.

This can take a few weeks or longer.

This depends on a lot of different factors.

For starters you should make sure that your credit report is checked and accurate.

You do not want to have credit issues in the middle of more mortgage application process.

You will need to be able to provide to most lenders today a copy of your current income documentation, prior tax returns, proof of employment, verification of assets, bank records, etc.

The credit report is a critical factor in this process. You should check it on a regular basis.

Keep in mind that your lender may end up with a credit report was different than yours. This can be differences between time or sources.

Traditionally a mortgage loan was fixed for 30 years.

Mortgage loans now have options to be fixed for:

• two years
• three years
• five years
• seven years
• 10 years

Keep in mind that the loan term is often 30 years.

This means that after the fixed rate is up the loan becomes a variable loan. The loan rate can adjust.

If you plan on selling your property after only two years, you may not need a loan that is fixed for 10 years or more.

In general the longer you fix the interest rate on your loan the higher the interest rate will be on their loan.

This is the type of loan where you were given multiple options for your monthly payment.

For example, you can make a full regular payment or the interest only payment.

Some loans may have an option to make the minimum payment below the Interest-Only payment.

These payment options you exist for the first three to five years of the loan.

After this time the loan usually turns into a regular loan.

Keep in mind that this type of loan is quite rare these days.

When you refinance your mortgage you pay some costs upfront.

This includes your loan closing costs, such as an application fee, loan points, etc.

You then compare this total cost to the savings per month.

If you save $200 per month, and your total refinance costs were $2,000 then you will breakeven on your refinance in 10 months ($2,000 cost divided by $200 per month in savings).

Points are fees that is typically paid as part of a new mortgage loan.

This can be for a refinance or for new home purchase.

Each point represents 1% of the entire loan amount.

For example a $200,000 loan with a one point fee comes out to $2,000.

Typically the borrower should not pay more than one point on a loan.

When you see offer for "no points" on the loan this typically means that the interest rate is higher than normal.

If you think you're being charged too much for a loan just take your business somewhere else.

Often times people get their loans from mortgage brokers.

The idea behind this is of a mortgage broker shop around for you and get you the best possible deal.

This isn't always the case, but your friendly neighbor lender might not be much better.

Many mortgage brokers are experienced with getting tough loans done.

The mane of specialty lenders that will work with you your particular credit or income profile.

Often times loan officers at a bank can be inexperienced.

Some banks will no longer do loans with mortgage brokers at all.

You can check your options both ways.

There's so much turnover banks, and sometimes people working as mortgage brokers also do not have much experience or expertise.

One way to see if you're working with the right person is to ask them about how many years experience they have.

They should be willing to answer this very easily.  You can also ask them to estimate how many loans they worked on.

More precisely, you can ask them about their experience with working with your type of loan.

Paying your mortgage late can be a major red flag.

When a mortgage lender is evaluating your application for refinance, they will look at a variety of factors.

They will check out your credit score, and see how you paid your creditors.

Your credit report may list late payments to other creditors such as your car payment.

Other late payments that may show up include credit cards.

Late mortgage payments will show quite quickly on your credit report.

This is one of the reasons the last late payment people make is to their mortgage lender.

Late payments are much more common last several years than they were before.

You should check to see what a wonder how much this is a factor when they're looking at your refinance.