Tips to Avoid Paying More for Your Mortgage

Buying a house is a major financial commitment. You want to be certain you're getting the best mortgage rate and terms, and that you will be able to afford your mortgage payment now and into the future. Unfortunately, some people don't really shop around or look at their mortgage options when buying a home. Someone who may spend hours researching and comparing prices for technology or a new car will take the first loan offer they receive.

If you're in the market for a new house, here are a few tips that will help you obtain the best mortgage possible.

Save Money to Make a Down Payment

If you can make a good-sized down payment, you won't have to worry about financing as much. That may help you get a better rate so your monthly payment isn't as much. While it's tempting to make only the minimum down payment and use the rest of the money for other things, remember that the more you borrow, the more you'll pay in interest. You'll save money by making a larger down payment in the long run. Plus, you'll have lower monthly payments, so you'll have extra money to spend each month.

Look at the Right Properties

Just because you can afford a larger house doesn't necessarily mean that's the right house for you. If it's just you and your spouse, a four-bedroom home may be too much. On the other hand, if you have several children or need space for a home office, it might be the perfect size. Don't buy more house than you need just because you can. Otherwise, you may end up paying for space that you don't actually use, but still have to keep clean and maintain.

This also applies to the extras you might find in a house. If you don't really need a swimming pool, for example, don't buy a house with one. Take the time to determine what you truly need in your future home before you start looking at houses.

Know Your Budget

Do you know how much you can really afford to spend every month? If you don't, you need to figure it out before you start looking at mortgages. First, look at your income. Banks generally won't offer you a loan if your expenses are more than about 30% of your overall income. There are a number of online calculators that will help you determine what percentage your monthly expenses are of your total income.

Remember to take your down payment into consideration, too. Then look at all of your debt and see if you can eliminate some of that. For example, you may need to spend a little bit of your down payment on eliminating a credit card if it helps lower your overall debt percentage.

Know Your Options

You also need to know what kind of loans you qualify for. Many people go straight to their bank and don't even look at things such as FHA loans or VA mortgages. These loans often have very low interest rates, and some don't require much of a down payment at all. If you qualify, these loans are often the better way to go than getting a loan from a traditional lender.

Compare and Contrast

Once you know if you qualify for any of these mortgages, you can compare and contrast them with traditional loans. Always be sure to get quotes from a few different mortgage lenders. While getting recommendations from your gay real estate agent is a great place to start, also take the time to do your own research. Once you have that information, you can determine which mortgage will best serve you in the long run.

When you've chosen a lender, be sure to get pre-qualified. This ensures the seller you're qualified to purchase their house. It also helps you know what you can afford. If you're pre-qualified for a $250,000.00 mortgage, you shouldn't be looking at $350,000.00 homes – it's a waste of your time and your agent. It's always better to know what your limits are before you spend a lot of time looking at homes you simply can't afford.

Your real estate professional can help you understand how mortgages work, and what options you may have. It's important to feel comfortable talking to your agent about your finances, and all of your real estate and housing needs. For those in the LGBTQ community, this often means finding an agent who identifies as a member of the community. You can find these agents online at www.GayRealEstate.com.