I just recently received an email from a lady stating that her and her husband wanted to buy a new car but really didn't know if they could afford it. This family probably saved themself a lot of headaches just by asking that question. I wrote back showing her how they could determine if they could afford car or not.

My answer to her question was to have her develop a budget, listing all of other bills and expenses they have, and then see what's left over. I also reminded her that she should consider extra costs like insurance, maintenance, etc.

Over years I have seen people with as little as $500 a month income manage their finances very well while someone else with $5000 income can't make it last entire month. It all boils down to planning. If you plan your bills and purchases each month with goal of not exceeding your income, you can make it on almost any income.

By adding $74.70 to your 20 year loan you can save $16,662.42 and pay loan off in 16 1/2 years.

By adding $101.07 to your 15 year loan you can save $11,271.73 and pay loan off in 12 1/2 years.

You can also see by chart that obtaining a shorter loan term when you buy your house can save a lot of money.

There are a couple of things that you need to check. First is that your loan agreement doesn't allow loan company to charge penalties for early payment. Secondly, if you itemize your federal income taxes and deduct mortgage interest, paying less interest will mean a lower deduction. I believe it is safe to say that interest savings will far outweigh tax savings.

Even if you don't have $75 to $100 a month to add to your mortgage payment, even $25 would save a lot.

If you would like to have your own Loan Calculator, just visit www.pine-grove.com to download their Loan*Calculator! Plus. This is a free version and has everything average family can use. It is also Loan Calculator I have used for several months. Highly Recommended.