Q: My sister, a single parent, has a home mortgage and some credit card bills. Her mortgage company has offered to refinance her home, include her other debt and give her a new 15 year mortgage with bimonthly payments.

Is this a good idea?

A: I’ve removed the name of the lender from your letter because I think there are many bad-apple lenders that offer this deal and it often gets the homeowner into trouble. In your sister’s case, the lender has a lousy track record and has been called a predatory lender by more than one state attorney general’s office.

What usually happens, is the predatory lender offers to roll many loans into one huge loan that is completely unaffordable for the homeowner, who then starts missing payments and ends up in foreclosure or bankruptcy court.

In general, you have to shop around to know if your lender, and it could be any lender, is giving you a deal. I’d feel much more comfortable if you told me your sister had shopped around the deal she had been offered with other lenders, such as the sub-prime divisions of major lenders like Bank of America and Countrywide Home Loans.

If your sister shops around with two or three other lenders, she should get a good feeling about whether the debt she has can be refinanced and how much it should cost.

Another good idea is for your sister to pull a copy of her credit history and credit score, so she knows whether she should be getting a loan with the best rate and terms, or if her credit falls into the subprime” category.

She can go to myFICO.com and purchase the credit history and score for as little as $12.95. It’s a smart move, particularly since many victims of predatory lenders are told they have bad credit (and can only qualify for expensive loans with huge fees) when they have good or even excellent credit.

Jan. 19, 2009.