If you are in the market for a mortgage or a home equity loan, you need to do your homework before signing on the dotted line. There are a number of common mortgage mistakes that can cost you thousands. Many mortgage lenders rely on you making mistakes so they can charge you more. There are a number of gimmicks mortgage lenders use to trick unsuspecting homeowners into paying more.

Here are tips to help you avoid being taken advantage of by your mortgage broker or lender.

Prepayment Penalties

A prepayment penalty is a fee your lender charges if you refinance the mortgage or sell your home. This penalty usually only applies for the first five years of the mortgage; however, some lenders try and slip more stringent conditions in their loan contracts. The actual penalty varies by lender; however, you may be required to pay as much as six months interest on 85% of the original loan balance if you refinance or sell before the penalty expires.

Don