Go for a smaller mortgage

31. Buy beneath your means. "Dream home" size has been rising lately, says Trulia.com. For wealth building, smaller is better. Less space, resulting in a lower mortgage, improves the odds your lender will green-light the deal, and you'll be left with more cash to invest.

Standard rule: Mortgage payments (including taxes and insurance) should be no more than 28% of your gross income. A better gauge: 22%, the average for borrowers lately, says data provider Ellie Mae.

32. Cut it shorter. Your mortgage, that is. Some 28% of new conventional mortgages last year were 15- and 20-year loans instead of the traditional 30-year fixed rate. If you're thinking about refinancing or trading up, opting for a shorter term can be a smart move.

Sure, you'll cough up a little more each month, but you'll save a bundle in interest and be house-debt-free a lot faster, freeing up cash to invest toward other goals.

30-YEAR MORTGAGE:
Interest rate: 3.8%
Monthly payment: $1,403
Total interest paid: $205,080

20-YEAR MORTGAGE:
Interest rate: 3.7%
Monthly payment: $1,772
Total interest paid: $125,382

15-YEAR MORTGAGE:
Interest rate: 3.1%
Monthly payment: $2,079
Total interest paid: $74,214
Source: HSH Associates


  @Money - Last updated April 17 2013 10:09 AM ET
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