Mortgage.net - Mortgage refinancing

Gerri Willis answers reader e-mails on mortgage refinancing, credit cards limits and investing year-end bonuses. NEW YORK (CNNMoney.com)

Question 1: How long do I have to keep my mortgage before I can refinance? - Wayne, PA

The short answer is that it depends. You'll need about 10 to 20 percent of equity in your home in order to refinance, so it really depends on how much money you put into your down payment and how much principal you've paid off so far.
Check your mortgage note to see if there are any prepayment penalties. This is a penalty you'll have to pay in case you pay off your mortgage early. Some penalties are 3 percent of the original loan. So, if you have a $200,000 loan, your penalty will be $6,000.

Prepayment penalties may expire after 2 or 3 years, or a year after your rate resets if you have an adjustable rate mortgage.

If you are looking to refinance, you'll want to shop around. Rates can vary widely and some lenders are pulling the purse strings more tightly, making it harder to qualify.

Question 2: Although I have never requested an increase, my credit card limit moved up to $13,000. I don't think I'll ever need a credit limit that high. If I decline this increase, what are the implications to my credit? - Dee, CA

Don't decline the increase even if you don't think you'll spend up to that amount. When your credit limit is increased automatically, that's a good thing.

As long as you don't charge more money on your credit card than you normally would on your credit card, your credit score will get a bump up, says John Ulzheimer of Credit.com.

Credit card companies will automatically increase your credit so you'll be tempted to spend more says Ulzheimer. But as long as you've been using credit responsibly, a credit increase will be in your favor.

Question 3: What is the smartest way to invest a year end bonus? - Carolyn, GA

One of the best things you can do, Carolyn, is to put that money toward maxing out your 401(k). This year you can contribute up to $15,500. If you're over 50, you can contribute $20,500.

This way you won't be penalized by Uncle Sam for that holiday bonus. If you have a mortgage, you may want to consider paying down more of your principle. This will reduce the amount of interest you end up paying over the life of the loan.

And finally, it's a good idea to check your emergency fund. Make sure you have at least 3 to 6 months worth of living expenses. If you need to pad your fund, consider a high-yield savings or money market account.

Gerri's Mailbox: Got questions about your money? We want to hear them! Send e-mails to toptips@cnn.com or click here - each week, we'll answer questions on CNN, Headline News and CNNMoney.com.