Most people don't realize it, but you typically pay more for your mortgage loan than you do for the house. In fact, quite a bit more. For example, imagine you buy a $250,000 home, pay $50,000 (which is 20% of the cost) for the initial down payment, and obtain a loan for the remaining $200,000. If that's a 30-year loan with an 8 percent interest rate, you'll wind up paying over $328,000 in interest alone over the course of your mortgage. That's why you need to invest the time into finding the best mortgage for the best price.

Typically, we browse the newspaper or the Internet and call just a few lenders who appear to offer good rates, or maybe we go to the same lender as our neighbor or the one our real estate agent recommended. However, not shopping around is going to cost you money - a lot of money.

Loans that look good in an ad or over the phone may have hidden closing costs, early payment penalties and additional application costs that will all cost you money. Keep reading to learn how to avoid lending pitfalls and save money on your first mortgage, making it a more positive experience.

1. Buying from a builder.

If you're buying a new home, you may be able to get a lender recommendation from builder. In some cases, builders negotiate special financing rates and can actually save you money. In other cases, the lender may be owned by the builder, or the builder may simply be receiving a commission from the lender. Before you commit to a builder's lender, always shop around for other quotes so you have several to compare.

2. Getting a recommendation from your agent.

While your agent can often direct you to a lender with whom he or she has a good relationship, you could also be walking into a commission trap. Before saying yes to an agent's lender recommendation, always get alternate quotes.

3. Do some comparison shopping and preliminary research.

Before you formally apply for an application, do some preliminary research into mortgage rates in your area. Having an idea of your credit score and price range before you start will help you get a more accurate picture of the mortgage market in your region.

4. Ask your friends and family for referrals.

Start by talking to family and friends who have recently borrowed funds. Ask if they had pleasant experiences and if they would recommend the company they dealt with. Personal references are frequently the most compelling since they come from someone you know personally and trust.

5. Don't be afraid to interview your lender.

When hunting for a mortgage, always remember that you're the customer. Just because you have to apply and qualify, doesn't mean you should feel "lucky" for the privilege of purchasing their mortgage. Remember, you could be giving this lender over $300,000 in interest.

Always try to sit down and chat with a few lenders to get a feel for their level of customer service. You can also find additional helpful information on their web site. Even if one lender has a marginally higher interest rate, the quality of their service could be worth the extra expense.