Refinancing your mortgage loan can be a stressful process; some mortgage lenders try and take advantage of their borrowers with the intent of repossessing their homes. Doing your homework and researching mortgage lenders will help you avoid these predatory lenders. Here are several tips to help you find the best mortgage lender for your financial situation.

At least 24 hours before closing on your new mortgage it is important to get all closing costs, fees, points, what they are for, and your interest rate in writing. Many lenders will try and raise your interest rate .25% just prior to closing because they don’t think you’ll forego closing. This .25% they slipped into your loan contract will cost you thousands of dollars over the life of the mortgage.

If a lender or broker encourages you to borrow more than you need or asks you to sign incomplete or blank documents, this is a sign that you should find another mortgage lender. Borrowing too much could lead to a monthly payment you cannot afford and end in foreclosure. If you sign blank or incomplete documents the lender could fill in anything they like and you have already agreed to unfavorable terms or even balloon payments.

Make sure your new mortgage does not include any kind of prepayment penalty. Mortgage lenders use prepayment penalties to discourage homeowners from refinancing. This penalty can be quite steep; some lenders charge as much as six months interest on 85% of the original loan balance. Bad credit mortgage lenders tend to be inflexible when it comes to prepayment penalties; however, if you are a homeowner with good credit there is no reason to accept a mortgage that includes any prepayment penalties.

Finally, make sure you are qualifying for an interest rate that corresponds to your credit rating. Predatory lenders often try and sell bad credit mortgages to homeowners with good credit so they can charge more. When you carefully compare loan offers from a variety of lenders and brokers, it is very easy to spot lenders that are overcharging.

You can learn more about mortgage refinancing, including costly mistakes to avoid by registering for a free mortgage guidebook.