How to Buy a House home Learn the basics 1. The Basics 2. How much home can you afford? 3. The Down Payment 4. The Loan - Assuming a Loan - Owner Financing 5. Qualifying for a loan 6. Understand Closing Costs Do the groundwork 7. Get your finances in order 8. Clean Up Your Credit Record 9. Establish Credit if you don't have any The Process 10. Find a Lender 11. Evaluate the bank's offer 12. Start looking at houses 13. Get the Disclosure 14. Make an offer / Sign a Contract 15. Have the House Inspected 16. Problems on the Inspection? 17. Renegotiate the terms 18. Appraisal, Survey, & Insurance 19. Appraisal went through? 20. Closing! After the purchase Avoding scams More about Mortgages How much loan can you get? Figuring your monthly pmt. 15- vs. 30-year loans Prepaying your mortgage Understand Compound Interest Private Mortgage Insurance If you won't live long enough to pay off the mortgage Other Topics Renting vs. Buying: Which is better? Paying cash vs. getting a loan The Debt Ratio Tax breaks are actually welfare for the rich Other Links to helpful sites Fan Mail Michael Bluejay's home page Email Me	How to Buy a House
	Paying off a 30-year loan in 15 years The good things about a 30-year loan are that it lets you buy a more expensive home than you could with a 15-year loan, and your payments are lower on a 30-year loan vs. a 15-year loan. The bad thing is that you pay for those benefits, in the form of higher interest costs. It's no surprise, really: When you're making payments for twice as long, you're going to be paying more money -- even if the 30-year payments are a little less than the 15-year payments. But it's possible to have the best of both worlds. You can get a 30-year mortgage, which allows you to qualify for a pricier home, and then pay it off in 15 years. You have the bigger home but you still saved money. Paying off a mortgage early is simple: Just pay a bit extra each month. To find the extra amount you need to pay each month see our page about figuring your mortgage payment. For example, if your payments were $800/mo., you might wind up paying $1100/mo. instead. On a 7% loan, you'd pay $74k in interest over the life of the loan instead of $167k -- a savings of $93,000! You might be thinking, "Well, I'll save $93k, but I'm losing that extra $300 I'm paying each month." Not so! You'd be paying that $300 anyway with the 30-year loan, as part of the payments you'd be making over the life of that loan. You're not paying any extra money by boosting your payments each month, you're just paying it earlier. And when you do so you save a bunch of interest. When you make your mortgage payment each month just include a separate check along with your mortgage payment check, for the amount of extra principal you want to pay. (In our example, $308.) Write "FOR PREPAID PRINCIPAL" on the memo blank, and write the same thing on a post-it note attached to the extra check. If you don't indicate that you want the extra check to go towards prepaid principal, your lender will just count it as a partial early payment for the next month, and won't apply it to your principal balance. We have more details about this on the Understanding Compound Interest page. It's also included in the book More Wealth Without Risk by Charles Givens. .