This article by Money Magazine explains the strategy that will get you to save $50,000 in nine years. It will put a lot more cash in your pocket -- money you can, no doubt, put to very good use.

Strategy: Refinance a 30-year mortgage to a 15-year loan.

Years to $50,000: Nine

How to do it: You should move fast: While rates are still historically low, they've risen about half a percentage point since hitting bottom last fall and could rise another half a point later this year, according to forecasters.

But nabbing a lower rate by itself won't yield enough savings to get you to $50,000. To really slash interest costs, you also have to reduce the term of the loan. Answer these questions to see if this strategy is right for you:

Can you swing higher payments?

You'll save 60% more in interest by refinancing to a 15-year rather than a 30-year loan at recent rates -- 4.3% for a 15-year vs. 5.1% for a 30-year loan. But your monthly payments will also rise, as you pay back more of the principal over a shorter term.

"If your current rate is above 5% and you don't expect to move for at least three years, it pays to make an inquiry with lenders," says Frank Nothaft, chief economist for Freddie Mac.

On a $280,000 refi of a 30-year loan with 25 years left on it, your payments would rise $260 a month but you would save nearly $175,000 in interest and pay off your mortgage a decade sooner.

Is there a better alternative?

Can't swing the higher payments? Look instead at a 20-year loan, which will get you close to the goal: At recent rates around 4.9%, you'll save $44,000 over 10 years on that $280,000 refi and $115,000 over the life of the loan, while cutting your monthly payments by $18. But not all lenders offer 20-year loans. Plus, rates vary more than on 15-year loans and are closer to current rates on a 30-year.

Do you have enough equity?

You should have no problem refinancing if you have at least 20% equity in your home. With less than 20%, some lenders won't approve a refi, or they'll require private mortgage insurance, which will add to your monthly costs. To see how much, use this PMI calculator.

The tradeoffs: Don't want to go through the hassle and expense of refinancing? Switching to biweekly payments may be the answer: On the loan in the example above, you'd save $49,000 in interest and cut four years off your repayment period.

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This  article provided by Lending Tree breaks down the Escrow process

How it works

When you put money in escrow it is held by a neutral third party (called an escrow agent) who works for both the lender and the borrower. The agent's role is to carry out the instructions agreed upon by both parties. The money is released when all the terms of the agreement are met. Escrow can be involved in anything from multimillion-dollar building projects to purchases made on online auction sites.

When it's used

When your mortgage closes, your lender will usually require you to open an escrow account to cover property taxes and homeowner's insurance. You'll make an initial deposit, followed by payments to the account every month. (Usually these are added to your regular mortgage payment.) The escrow agent will then release these funds as your taxes and insurance premiums come due.

Its purpose

The idea is to protect the lender by ensuring that you pay your taxes and insurance on time. If you default on your property tax, for example, your municipality can put a lien on the house, which would make it difficult to sell. Or if your house burns down and you've neglected to pay the insurance, the lender would be left with no collateral.

How you benefit

Escrow can benefit borrowers by helping them spread insurance and tax expenses evenly over 12 payments. For example, assume your yearly property taxes are two payments of $1,000 each, and your insurance is $400 annually. If you paid these directly, it would mean three large payments a year; your escrow costs, however, would be a manageable $200 a month.

Escrow payments

Your escrow account will have a built-in cushion -- if you miss a payment, the lender must still be able to pay your accounts on time. However, federal law prohibits lenders from requiring more than two months. expenses in escrow. And because your tax and insurance costs will change slightly from year to year, the lender will review and adjust your escrow payments annually.

When escrow may be waived

In most states, the money you place in an escrow account earns no interest for you. For that reason, many borrowers prefer to pay their taxes and insurance directly. Lenders may agree to this if your down payment is more than 20 percent, although some will raise your interest rate slightly to compensate. Once you agree to putting funds into an escrow account, however, it is difficult to cancel it, so make sure you fully understand the arrangement before your mortgage closes.

Five years ago, it was easy to tell a good neighborhood from a bad one. All you had to do was conduct a quick check on nearby schools and keep an eye out for hopelessly abandoned properties. If the schools were good and the homes well-kept, the neighborhood, and your future home, were keepers.

Today, though, determining whether a neighborhood is good and will hold its value isn't so easy. The suburbs, once the Mecca of homebuyers with kids, now outrank urban city centers in terms of poverty. And that sparkly McMansion on the corner might actually be in foreclosure.

So how can you tell if you're buying into a neighborhood you'll like and, just as importantly, will likely hold its value until you're ready to sell? Below are some tips you can use to find the perfect neighborhood and new home for you and your family. Neighborhood is a big factor that should be considered when buying and investing in real estate.

1. Create Your Dream Neighborhood: Most people know what they'd like their dream home to be like, but they give little thought to the neighborhood. Start by defining what your dream neighborhood is like. Can you walk to the downtown area? Do you want to live in a historic neighborhood? Do you want to be in an exciting college town or in a more sedate, family-oriented environment? Write out your list of wants so you know what to look for.

2. Look at Public Services: With property taxes falling, many towns and cities are having to cut back on the public services they offer. Parks, libraries and police often get the ax first. Drive through a potential neighborhood, and then through the town, and look carefully for clues that the city is having financial trouble. Are the streets clean? Are the parks in good condition? Is the grass cut? Check the library as well. Have they had to cut their hours? You could also ask the librarians about the neighborhood and town as well. They're often a gold mine of information.

3. Look at Schools: If you have kids, then the quality of local schools is a huge issue. Even if you don't have children or plan on teaching a home school curriculum, schools still matter simply because when it comes time to sell, your buyers will likely have kids. Research the local schools using sites like GreatSchools.org. It can also be helpful to attend a PTA meeting to talk with local parents. They'll tell you candidly how well (or badly) the schools are doing, and if they're having budget troubles as well.

4. Examine Clues: Do you see a lot of For Sale signs? Does your potential neighborhood have a lot of cheap apartments for rent? Are the businesses downtown shutting down? These are signs that things might be on the decline. Also, picture yourself in the neighborhood. Go through your daily routine to make sure you'll still have the same quality of life. For instance, if you run every morning, are the roads safe enough for your morning jog? If you bike to work, are there bike lanes for you to use? If you love grabbing a cup of coffee, is there a neighborhood barista for you to enjoy? Don't forget to listen. Can you hear noise from the highway or airport? Is there a club or bar nearby that might get annoying at 2 a.m.? These are all important things to consider.

5. Talk to People: Talk to your potential neighbors. You'll be living next to these people, perhaps for years. Having great neighbors can make or break a neighborhood, so find out how they like living there and what they're like. Remember, you can always make home improvements to your house if there's something you don't like. But changing your neighborhood? It's not so easy. It's worth the time and effort to do some research and legwork early on - you'll be glad you did. What are some things you consider when moving into a new neighborhood? Did you ever find anything unexpected after moving in?

Article from US NEWS & World Report

Below  is a great article from KCM as to why waiting for prices to bottom out before buying will actually cost you more.

“Many purchasers have been sitting on the sidelines waiting for home prices to hit bottom. They want to guarantee that they

are purchasing at the best possible price. Like them, we also believe that prices still have some room to fall in most markets. However, we disagree that waiting is a good financial decision. The buyer should not be concerned about housing prices.They should be concerned about cost.

The cost of a house is made up of the price AND THE INTEREST RATE they will be paying. Two different pieces of news released yesterday highlight this point.

PRICES

The National Association of Realtors (NAR) released their 4^th quarter housing research report. In the release, they reported that home sales rose 15.4% in the 4th quarter over the 3rd quarter. They also showed that prices remained stable during the year:

The national median existing single-family price was $170,600 in the fourth quarter, up 0.2 percent from $170,300 in the fourth quarter of 2009.

A buyer who delayed a purchase might find solace in the fact that prices have not increased. However, the other news released yesterday paints a different picture.

INTEREST RATES

The Primary Mortgage Market Survey was released by Freddie Mac which showed that the 30 year fixed rate mortgage was at 5.05%. Frank Nothaft, vice president and chief economist of Freddie Mac said:

“Long-term bond yields jumped on positive economic data reports, which placed upward pressure on mortgage rates this week…As a result, interest rates on a 30-year fixed-rate mortgage rose to the highest level since the last week in April 2010.”

So prices have remained stable but interest rates have risen dramatically in the last 90 days. What does that mean to a buyer looking to purchase a home this year?

The price is the same. It just costs more.

By sitting on the sidelines for the last 90 days a purchaser lost:

• $89.44 a month
• $1,073.28 a year
• $32,198.40 over the thirty year life of the mortgage

If you buy a $340,000 home, double all these numbers.

Bottom Line

Even if prices fall another 10% this year, the cost of a home will increase if interest rates go up more than 1%. Buyers should not worry where prices are going. They should be concerned where costs will be later in the year.”

Article from Keeping Current Matters

Steps to picking the best mortgage for you:

COMPILE THESE DOCUMENTS IN ONE FOLDER:

One month’s worth of recent pay stubs from each earner

Tax returns and W-2 forms from the past two years

Three months’ worth of statements from your bank, 401(k), IRA, mutual funds, and stocks

Three months’ worth of student loan statements or past mortgage payments

Letter of employment verification

Letter from financial gift givers, confirming that it’s a gift

MAKE SURE YOU:

Review mortgage terminology and rates online (MTGProfessor.com is a great source)

Make appointments with at least three banks or brokers.

Get a GFE (good faith estimate) from each loan officer,with terms and fees spelled out.

Crunch the numbers and decide which loan is best.

Sign a mortgage agreement.

15-YEAR FIXED RATE

Monthly payment: higher

Interest rate: lower

Rate changes: never

Total interest paid: lower

Best for: those who can afford higher monthly payments, want to save in the long run, and plan to stay in their home for a long time

30-YEAR FIXED RATE

Monthly payment: lower

Interest rate: higher

Rate changes: never

Total interest paid: higher

Best for: those who prefer lower monthly payments,may need more time to pay for the house they desire,and plan to stay there for a long time

3/1 ADJUSTABLE RATE

Monthly payment: lower for three years; then may change each year

Interest rate: lower

Rate changes: fixed for three years; then can fluctuate

Total interest paid: depends on interest rates

Best for: those who prefer lower initial monthly payments, are confident they can handle future market fluctuations, and plan to move after a few years

5/1 INITIAL INTEREST ONLY PAYMENT

Monthly payment: much lower for five years because only interest payments are required

Interest rate: lower

Rate changes: fixed for five years, then can fluctuate

Total interest paid: depends on interest rates

Best for: those who prefer very low initial monthly payments, are sure they can handle significantly higher payments in five years, and plan to move in a few years

7-YEAR BALLOON

Monthly payment: lower, then—whammo!—the entire balance of the loan must be repaid or refinanced.

Interest rate: lower

Rate change: fixed for seven years

Total interest paid: depends on rates when balance is due

Best for: those with a magic crystal ball that shows a) lottery numbers or b) interest rates in seven years

PAY OPTION ADJUSTABLE RATE

Monthly payment: four choices each month—very low minimum,low interest-only, or higher principal/interest options

Interest rate: very low

Rate changes: monthly

Total interest paid: depends on interest rates

Best for: one making minimum payments (like with a credit card), can lead to a mortgage growing over time