Are men or women getting the better deal on a mortgage?

Research reveals that while women are statistically better than men at keeping up with their mortgage payments, they're also more likely to pay more for a loan. According to the Urban Institute, while women borrow less money from lenders than men, 4.9% of female homebuyers end up with a higher-priced mortgage loan compared to 4.6% of male homebuyers.

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What's Behind the Gender Gap in Mortgage Lending?

m vs w 2 Are Men or Women Getting the Better Deal on a Mortgage?

It's hard to say why women seem to be at a disadvantage when it comes to home buying. You might assume that it's because women tend to have lower credit scores than men (resulting in higher mortgage rates). But some studies tell a different story. For example, a recent Experian study shows that women have average credit scores of 675, versus 670 for men.

You could also conclude that women just aren't as good at managing their finances and perhaps have more debt than men. But research also contradicts that argument. Experian found that on average, women have 3.7% less debt.

One thing that we know for sure is that there's a gender pay gap. That's one factor that could possibly explain why more women end up paying more for mortgages. After all, having a smaller income might mean that you have less money to put toward a down payment and other housing costs. Having less disposable income could cause a lender to raise your mortgage rate.

Some research suggests that female homeowners are worse off than their male counterparts, particularly when it comes to home appreciation. An analysis from RealtyTrac found that among single male homeowners, home values were 10% higher, on average, than those among single female homeowners. Home appreciation for single male homeowners was more than $10,000 higher.

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RELATED: Ranking the gender pay gap by state

2016 gender pay gap state to state ranking
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2016 gender pay gap state to state ranking

51. Louisiana 

Gender pay gap: 34.7%

(Ian Dagnall / Alamy)

50. Utah 

Gender pay gap: 32.4%


49. Wyoming 

Gender pay gap: 31.2% 

(Philip Scalia / Alamy)

48. West Virginia

Gender pay gap: 30%

(J. Stephen Conn/Flickr)

47. North Dakota

Gender pay gap: 28.7%

(Tim Evanson/Flickr)

46. Alabama

Gender pay gap: 27.4%

(Danny Hooks / Alamy)

45. Idaho

Gender pay gap: 27.2%

(Philip Scalia / Alamy)

44. Oklahoma

Gender pay gap: 26.5%


43. Montana

Gender pay gap: 25.8%

(John Elk III / Alamy)

42. Michigan

Gender pay gap: 25.5%


41. Indiana

Gender pay gap: 24.8%


40. New Hampshire

Gender pay gap: 24.3%


39. South Dakota

Gender pay gap: 23.8%

(SuperStock / Alamy)

38. Mississippi

Gender pay gap: 23%

(Don Smetzer / Alamy)

37. Kansas

Gender pay gap: 23%

(Jim West / Alamy)

35. Iowa

Gender pay gap: 22.7%

(Ellen Isaacs / Alamy) 

34. Missouri

Gender pay gap: 22.6%

(L. Allen Brewer/Flickr)

33. Ohio

Gender pay gap: 22.2%


32. New Mexico

Gender pay gap: 21.9%

(Patrick Ray Dunn / Alamy)

31. Arkansas

Gender pay gap: 21.8%

(Buddy Mays / Alamy)

30. Texas

Gender pay gap: 21.2%

(Ian Dagnall / Alamy)

29.  Maine

Gender pay gap: 21.2%


28. Nebraska

Gender pay gap: 21.1%

(Ian G Dagnall / Alamy)

27. Wisconsin 

Gender pay gap: 21.1%

(Jeff Greenberg 5 / Alamy)

26. Illinois

Gender pay gap: 20.9%

(incamerastock / Alamy)

25. Pennsylvania

Gender pay gap: 20.8%


24. Kentucky

Gender pay gap: 20.1%


23. Virginia

Gender pay gap: 19.8%


22. South Carolina

Gender pay gap: 19.8%

(Ellisphotos / Alamy)

21. New Jersey 

Gender pay gap: 19.7%

(Robert Quinlan / Alamy)

20. Alaska

Gender pay gap: 19.2%

(retro traveler/Flickr)

19. Delaware

Gender pay gap: 19.0%

(J. Stephen Conn/Flickr)

18. Tennessee

Gender pay gap: 18.5%

(Jim Nix / Nomadic Pursuits/Flickr)

17. Minnesota

Gender pay gap: 18.4%


16. Rhode Island

Gender pay gap: 18.3%


15. Georgia 

Gender pay gap: 18.2%

(Ian Dagnall Commercial Collection / Alamy)

14. Colorado 

Gender pay gap: 18.1%

(Jesse Varner/Flickr)

13. Massachusetts

Gender pay gap: 18.0%


11. Connecticut

Gender pay gap: 17.4%


10. Vermont

Gender pay gap: 16.2%


9.  Arizona

Gender pay gap: 15.9%

(Photoshot Holdings Ltd / Alamy)

8. California

Gender pay gap: 15.8%

(Robert Landau / Alamy)

7. North Carolina

Gender pay gap: 15.3%


6. Florida

Gender pay gap: 15.1%

(FL Stock / Alamy)

5. Nevada

Gender pay gap: 14.9%


4. Maryland

Gender pay gap: 14.6%

(tim caynes/Flickr)

3. Hawaii

Gender pay gap: 14.1%

(Mauro Ladu / Alamy)

2. New York

Gender pay gap: 13.2%


1. Washington D.C.

Gender pay gap: 10.4%

(Alexandre Deslongchamps via Getty Images)

Puerto Rico has the smallest gender pay gap, and it benefits women. 

Gender pay gap: -4.6% -- Women earn more than men by a small margin

(Fuse via Getty Images)


What Can Women Do to Get the Best Deal on a Mortgage?

If you're a woman who's planning to apply for a mortgage, it's important to understand that getting a low mortgage rate might be difficult. If you don't want to pay more for a loan than you need to, here are some steps you might want to take.

  • Reduce your debt-to-income ratio. Even though the data suggests that women may have less debt than men, they're also bringing home smaller paychecks. Paying down as much of your debt as possible can lower your debt-to-income ratio and potentially strengthen your position as a borrower.
  • Lower your credit utilization ratio. This is how much credit you've used relative to your credit limit. By paying off credit card debt and using your credit card less often, you might be able to reduce your credit utilization ratio (also known as your debt-to-credit ratio). Lowering your debt-to-credit ratio can raise your credit score.
  • Save up for a larger down payment. Putting down 20% or more on a home can work in your favor in two ways. First, it allows you to avoid paying private mortgage insurance (PMI), which can add to the cost of buying a home. Second, it means you're financing a smaller amount, which may lower your mortgage rate. You can increase your chances of ending up with a cheaper home loan by paying more cash up front.

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Final Word

m vs w 03 Are Men or Women Getting the Better Deal on a Mortgage?

Perhaps the most important thing women can do to secure the best deal on a mortgage is to take time to shop around. Comparing loan offers from multiple lenders can help you avoid loans that are more expensive.

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The post Are Men or Women Getting the Better Deal on a Mortgage? appeared first on SmartAsset Blog.

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