Is Your Loan Fully Amortizing?

• If you took out a 30-year, fixed-rate mortgage, or a 15-year version, your mortgage contract should specify that your loan is fully amortizing. This means that when you make your monthly payments, you will be paying enough to pay back the entire loan over its 30-year or 15-year lifespan. Some adjustable-rate mortgages are actually examples of negative amortization. Eventually, the amount you pay each month might not be enough to pay back your loan before the end of its lifespan. If you see the words "negative amortization" on your mortgage contract, at some point in your loan's life, your monthly payments will have to increase to allow you to pay off your loan on time.
  
  

Fixed-Rate Or Adjustable-Rate?

• Your mortgage documents should spell out somewhere whether your loan's interest rate is fixed, meaning it will not change during the life of your loan, or adjustable. If your loan is adjustable, its interest rate will change after a certain number of years. Your loan contract will say how long your interest rate remains fixed: 30 years, if you took out a 30-year fixed-rate mortgage, or a smaller number of years if you have an adjustable-rate loan.
  
  

What Is Your Interest Rate?

• Interest rates make a big difference in the amount of money you pay each month to your mortgage lender or bank. Because of this, you want to make certain that the interest rate listed in your mortgage contract matches the rate promised to you by your lender. Make sure, too, that your mortgage contract states that your interest rate will remain constant for the life of your loan if you took out a fixed-rate loan.
  
  

Are There Early Payment Penalties?

• Many loans come with prepayment penalties. If you pay off the loan--including through a refinance--within a period of three to five years, you will be charged a penalty of up to several thousands dollars. Your mortgage contract will list any prepayment penalties that you can incur. Make sure to look for them.
  
  

What Is the Timeline?

• The most intimidating part of your mortgage contract is the long list of monthly payments you'll make. It is important to study this list, though. It will tell you when your last mortgage payment is due. And will also clearly spell out the amount you'll pay each month. Make sure this information matches what your lender told you earlier.