Financial Tips

• APR stands for "annual percentage rate" and is the cumulative yearly rate for a mortgage loan. It is usually higher than the "interest rate" stated on your mortgage note because it includes loan discount points, fees and mortgage insurance, in addition to the interest rate. So when comparing loan types, it's a good idea to look beyond the interest rate and see the bigger APR picture.

• Many people assume that their mortgage payment would be twice as much with a 15-year loan as opposed to a 30-year loan. But that's not the case! An $80,000 loan at 10% with a 3-5% down payment would have a $702 monthly payment for a 30-year mortgage, and a $860 monthly payment for a 15-year mortgage. That's only 22% more, but the savings in interest paid over the years is $97,920.*

• Depending on your loan, you may be able to use the following sources of income to help with closing costs and your down payment: a relative's gift of funds, your 401(k), IRA or Keogh, cash-in stocks or bonds, the cash value of insurance policies, or IRS tax refunds.

• Don't spend all of your money on the down payment and closing costs. "Incidentals" can add up quickly and you'll want to have some cash for moving expenses, new window treatments, landscaping - - and, of course, everything from caulk to painting supplies to lawn mowers and ladders. In fact, your lender may require that you show evidence of having at least two months of house payments after closing.

• Making just one extra payment per year can dramatically decrease the principal amount of your mortgage, allowing you to pay off a 30-year mortgage in as little as 20 years.

• Refinancing makes sense only if the new rate is at least 1% or more lower than the rate on your current mortgage.