Your House Can Be Your Biggest Source of Savings

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If you want to save a lot of money (and who doesn't?), then you need to look at where you spend a lot of money. Remember that 1980s movie The Money Pit? Actually the movie wasn't very memorable at all, but I've always remembered it because it was about a house. A house in need of tons of ultra-expensive repairs. Even if your home is in good shape, it's still your most expensive undertaking. BUT it can also be your biggest source of savings. I'll say it again: if you want to save money, figure out where you spend money.

Here's a roundup of helpful websites that can help you SAVE BIG on a house when you initially buy it and then as you own it.

Buying the House for Less

Almost every state offers first-time homebuyer assistance programs that can be pretty dramatic. They may be able to help you afford a home faster, by helping with your down payment or closing costs or mortgage rate. And the funny thing is "first-time homebuyer" is defined very loosely. If you haven't owned a home in three years, many of these programs consider you a first-timer. To see a listing of programs state by state, Click here

If you live in a rural area --or would like to-- you need to know about Section 502 Loans. They are special low interest mortgages guaranteed by the US Department of Agriculture as an incentive to get people to buy in less populated area. The mortgages are called Section 502 loans or Rural Housing Guaranteed Loans. To learn more, visit the U.S. Department of Agriculture's website. Click here

Saving on Your Mortgage

If you can afford a 10, 15, or 20-year loan instead of a 30-year mortgage you will SAVE BIG. Ask lenders to run these different scenarios for you or do it yourself using an online mortgage calculator. I like the mortgage payment calculator offered by Here's a link that will take you directly to it. Click here

Do you have an adjustable rate mortgage? They are perfect for some circumstances, but beware! Banks are notorious for miscalculating adjustable-rate mortgage interest rates when they adjust. You can easily double check your bank's math --without doing any math yourself. Just go to and click on the adjustable-rate mortgage calculator. Click here

Paying extra principal toward your mortgage is one of the most dramatic ways to save money that you will ever come across. By paying extra toward your principal, there is less principal for the bank to charge you interest on. You save thousands in interest and pay off your mortgage years early. Some people do this by paying bi-weekly which has the effect of making one extra payment a year. I prefer to send a set amount of extra money each month. A Baltimore couple who I gave a savings makeover stood to save $37,000 just by sending in an extra hundred bucks a month! It's kind of fun to plug in different prepayment numbers and time frames and see how much you can save by prepaying your mortgage. Here's a great calculator to help you do it. Click here

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