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“The first step in getting what you want from life is deciding what you want.” Ben Stein 

Your mortgage is usually the biggest debt you have. It is usually the one debt you keep the longest too.   Getting the right terms on your mortgage will impact your financial struggles and successes through life.  


Describe what you want in your home.  What are the amenities in the house that are a necessity? Describe the surrounding area where you want to live. Do you want to be in the city, the suburbs, or out in the country?   

How long do you plan to keep the home and the mortgage? What other activities will be a part of your lifestyle?  Will your home be located near those events and activities? What other financial events do you expect over the next five years?


How much can you comfortably afford to pay each month on your house payment? The usual advice you can find on financial posts and podcasts suggests keeping your total house payment under 33% of your gross income.  The total house payment includes taxes and insurance, mortgage insurance, and association fees.  These same financial gurus suggest keeping total debt under 43% of your gross income, including the new house payment.  Think about other activities where you spend money.  Your comfort level may be different than the standard recommendations. 

How much can you comfortably pay down to buy that house that is calling your name?   Remember to keep a healthy amount of emergency funds ready in the bank.  If you are short on funds to close, check out for down payment assistance programs in your area.  If you have a house to sell and will have a windfall profit coming to you within a few weeks of buying the new home, you may want to look at a temporary bridge loan to help until you sell the other house and pay off the bridge funding. 

Consult with a trusted financial advisor.   Other great resources to help you gather the information you need are reputable realtors, a knowledgeable and trustworthy lender, home inspector, real estate attorney and insurance professional. 


If you need down payment assistance, the geographic location of your home will be key on which programs are available. If you plan to keep this home longer than five years, a general rule of thumb is to stay with a stable, fixed-rate mortgage program.  The lower the interest on this loan, the better. If you are paying extra money to buy down the mortgage rate, make sure the difference you are enjoying in the lower payment will more than pay you back for the extra buy-down funds you paid for the lower rate. 

If you are not planning to keep the home for more than five years, the general rule of thumb is to minimize your costs to buy the house. The down payment you can get back if values continue to rise over time, but the closing costs to third parties is a cost to do the transaction and eats into your profit when you sell shortly down the road. 

Compare mortgage terms with other lenders.  If you are shopping mortgage terms with different mortgage lenders over a two-week period, you can risk getting a few credit pulls from mortgage companies. Those mortgage inquiries score as one inquiry to give you a chance to shop for the best terms without being penalized on your credit score.  

Remember, the lowest rate is rarely ever the best deal.   Look at the details on the estimate of closing costs. Some lenders quote an extremely low rate but have higher fees than a different lender quoting a little higher rate.  

Get your copy of Jo Garner’s new book “Choosing the Best Mortgage-The Quickest Way to the Life You Want.”  An essential mortgage guide with stories of people finding the right loan and overcoming common barriers.  

Buy on Amazon and Barnes and Noble or 

Posted On Monday, 13 September 2021 00:00 Written by

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