Market Commentary for December 29th The Last Week of 2014

Week two of the year-end holiday season has only two monthly economic reports scheduled for release that are relevant to mortgage rates. One of those two is considered to be highly important to the bond and mortgage markets. There is nothing of importance Monday, but we still may see some movement in the markets and mortgage pricing as traders return from the extended holiday weekend.

The Conference Board will post their Consumer Confidence Index (CCI) for December late Tuesday morning. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for a large increase in confidence from November’s reading of 88.7. Analysts are expecting Tuesday’s release to show a reading of 93.5, meaning consumers felt much better about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

The bond market will close at 2:00 PM ET Wednesday ahead of the New Year’s Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Thursday for the holiday and will reopen Friday morning for regular hours. As a result of the holiday schedule, we should see another round of lighter than normal trading a couple days. However, I don’t believe it will be as thin as we saw last week. That should help prevent larger moves in bonds on days with little or no news to justify the move like we saw last week.

After the holiday, the Institute for Supply Management (ISM) will post their manufacturing index for December late Friday morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 57.7 reading in this month’s release, meaning that sentiment softened from November’s 58.7. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher mortgage rates Friday morning as it would point towards a stronger manufacturing sector.

Overall, I am expecting to see Friday be the most active day for mortgage rates, although Wednesday morning could also be fairly busy as the year comes to an end. It is difficult to label any day as the calmest because even Monday that doesn’t have anything scheduled to be posted could also be relatively busy following last week’s light holiday trading. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Market Commentary for the Week of December 22nd - Happy Holidays!

This week brings us the release of six pieces of monthly and quarterly economic data that are considered relevant to mortgage rates. It is a holiday-shortened week with the financial markets closing early Wednesday and remaining closed Thursday in observance of Christmas. None of the week’s data is considered key, but some of it does carry enough importance to affect mortgage pricing. All the reports come before the holiday, so the busiest part of the week will be the first couple days.
The first of this week’s releases will be November’s Existing Home Sales figures from the National Association of Realtors late tomorrow morning. It will give us a measurement of housing sector strength and mortgage credit demand and is expected to show a decline in sales, indicating a slowing housing sector. A sizable decline in sales would be considered positive for bonds and mortgage rates because a softening housing market makes broader economic growth more difficult. But unless the actual sales figures vary greatly from forecasts, the results will probably have a minor impact on tomorrow’s mortgage rates.
Tuesday has most of this week’s reports plus the first of two Treasury auctions. There are five pieces of economic data being posted Tuesday morning. It starts with November’s Durable Goods Orders at 8:30 AM ET. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years such as appliances, airplanes and electronics. Analysts are expecting the report to show a 2.9% rise in new orders. A decline in new orders would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should help push mortgage rates lower. However, a much larger jump in orders could lead to mortgage rates moving higher early Tuesday morning. This data is known to be quite volatile from month-to-month though, so it is not unusual to see large headline numbers in this report.
Also at 8:30 AM ET Tuesday is the final revision to the 3rd Quarter Gross Domestic Product (GDP). I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 3.9% annual pace during the quarter and this month’s final revision is expected to show a 4.2% growth rate. A revision higher than that would be considered bad news for bonds. But since this data is quite aged at this point and 4th quarter numbers will be posted next month, I am not expecting this release to affect rates Tuesday.
There are three reports being released late morning Tuesday. The first of that group is the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. Current forecasts are calling for no change from the preliminary reading of 93.8. This is a fairly important index because rising consumer confidence indicates that consumers feel better about their own financial and employment situations, meaning they be more apt to make large purchases in the near future. A reading above forecasts would be negative for bonds and mortgage rates while a large decline would be favorable.
Next up is November’s Personal Income and Outlays data at 10:00 AM ET. It will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up over two-thirds of the U.S. economy, any related data usually has a noticeable impact on the financial markets and mortgage rates. Current forecasts are calling for a 0.5% increase in income and a 0.5% increase in spending. If this report reveals weaker than expected readings, we could see the bond market improve and mortgage rates drop slightly late Tuesday morning, especially if the Durable Goods Orders report gives us favorable results also.
November’s New Home Sales data is the final economic report of the week. This report gives us another measurement of housing sector strength and mortgage credit demand. It is the sister report of Monday’s Existing Home Sales report, but covers a much smaller portion of the housing market than that one does. A weakening housing sector is considered good news for the bond market and mortgage rates because broader economic growth is less likely in the immediate future. Since bonds tend to thrive in weaker economic conditions, a large decline would be considered favorable for bond prices and mortgage rates. Current forecasts are calling for a slight increase in sales of newly constructed homes. Ideally, we would like to see a large drop in sales.
In addition to this week’s economic data, we also have Treasury auctions scheduled the first three days. The two that are most likely to influence mortgage rates are Tuesday’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand, bond prices may rise enough to lead to improvements in mortgage rates shortly after the results are posted. They will be announced at 1:00 PM Tuesday and 11:30 AM Wednesday. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates Tuesday and/or Wednesday.
We also have early closings this week that sometimes influence trading. The stock and bond markets will both close early Wednesday ahead of the Christmas Day holiday and will reopen for regular trading hours Friday. Trading will likely be thin Wednesday, particularly during late morning and early afternoon hours as traders head home for the holiday and again Friday. It is fairly common for some traders to sell small portions of their holdings before a holiday or long weekend to protect themselves from unforeseen events that may take place while U.S. markets are closed. That is more common on 3-day weekends than just a day-and-a-half holiday, especially when the geo-political and international financial issues seem to be calm. However, the possibility does exist, so minor losses in trading Wednesday morning will not be of much concern.
Overall, labeling Tuesday as the key day of the week for mortgage rates is an easy call with five report releases and one auction all taking place. Friday should be the calmest day due to the expected light trading and nothing of importance scheduled for release. After Tuesday, I don’t think we have much to be concerned about regarding mortgage rate movement. However, it still would be prudent to watch the markets and maintain contact with your mortgage professional if still floating an interest rate.

Happy Hanukkah – Some Trivia to Start Off the Holiday

This year, Hanukkah (sometimes written Chanukah) starts at sundown on Tuesday, December 16th. It will continue until the evening of Wednesday, December 24th. In Hebrew, the word “hanukkah” means “dedication,” and this holiday celebrates the rededication of the holy Temple in Jerusalem following the victory of a small band of Jewish rebels (called the Maccabees) over the Syrian-Greeks in 165 BCE.

The story is that there was only enough oil to last one night, and the lamps were able to be lit for 8 nights.

The food

Because this is the festival of the oil, traditional foods are fried. You might think the most common one would be the latkes or potato pancakes, but it’s actually the sufganiyot which is a fried donut filled with jelly.

Eating dairy food, especially cheese, is another tradition. Its story is in honor of Judith who, according to legend, saved her village from Syrian attackers. She fed the general Holofernes so much wine and cheese until he passed out. Judith took the general’s sword and chopped off his head which she brought back to her village in a basket. The next morning, the Syrian soldiers were so frightened by seeing the headless body of their leader that they headed for the hills.

The fun

The dreidel is played with and you can win gilt which are chocolate coins. In ye really olden times, the Syrians forbade people from learning the Torah. So the students kept the dreidels around, and pretended to gamble when the Syrians popped by. Outside of Israel, a dreidel has the Hebrew letters “nun,” “gimel,” “hay,” and “shin” on its four sides. These letters stand for “Nes gadol haya sham,” which means, “A great miracle happened there,” referring to Israel. An Israeli dreidel has the letter “pay” rather than “shin.” This stands for “poh,” meaning “here”a great miracle happened here.”

The Hebrew letters also represent Yiddish words that tell how to play the dreidel game. Each player starts with the same amount of candies, chocolate coins (gelt), or other tokens, and puts one in a pot. Players take turns spinning the dreidel, waiting to see which letter lands face up. Nun is for “nisht,” do nothing. Gimel is for “gants,” take the whole pot. Hay is for “halb,” take half. Shin is for “shtel,” add to the pot. The game ends when a single player wins all the tokens.

Thanks to: Hanukkah — Infoplease.com http://www.infoplease.com/spot/hanukkah.html#ixzz2ENeUj7cn for this information.

Eight Things You Didn’t Know About Hanukkah

1. This is actually a minor holiday, but because of its proximity to Christmas, it has become a large, family-centered celebration. (some claim it happened in the late 1800s.)
2. One additional candle is lit on the Menorah (also called the ‘hanukkiyah’) until all nine candles are lit. The tradition is to start on the left, and move the candles one spot to the right so the newest candle is in the far left position.
3. The original Menorah had room for 7 wicks, and after the miracle of having oil to light the lamp for eight days, they added in two more branches to the lamp.
4. The ninth candle is an “attendant candle” and used to light all the others.
5. The dates (to us) always seem to be different. But if you had a Hebrew calendar, you’d note that Hanukkah always starts on the 25th day of the Jewish month of Kislev. This corresponds to beginning four days before the new moon which is the darkest night of the Kislev month symbolizing bringing light in the darkest time of the year.
6. The candles are supposed to burn for at least a half an hour after the stars come out.
7. The menorah should be placed in a window to share the miracle and celebration with passers-by.
8. Gift giving wasn’t a part of the original holiday (lucky for the kids, this got changed)

What’s your favorite holiday? Post it in the comments so we can post trivia and share it with our readers.

Should You Remodel or List Your Home For Sale?

by Blanche Evans

If you’ve been watching a lot of HGTV, you may be in the mood to make changes. Is it time to remodel? Or is it time to sell? Just like anything that gets a lot of use, homes show wear and tear after a few years. Certain color schemes and decorative styles begin to look outdated. And there are some improvements that you may have put off as a new homeowner that you can afford to do now.

Some market conditions are in your favor — interest rates are still extremely low and below where they were a year ago and the economy is improving, so you’ll likely get much of what you spend to improve your home back when it comes time to sell.

The question to answer is this: If you improved your home the way you want, would you want to stay in it for a few more years, or are you ready for a complete change?

Home improvements can be substantial, such as adding a bedroom and bath to the existing footprint of your home or outfitting a kitchen with new countertops, cabinets and appliances. You want your home to support the standards set by your neighborhood, but you also don’t want to end up with the most lavish house on the block.

To get started, put together the right team. If you’ aren’t moving walls or pouring a new foundation, you probably won’t need an architect, but you will need the right contractors, kitchen planners and interior designers to help you put it all together.

You’ll also need to talk to your lender to learn how much you can borrow and whether the current market value will support the facelift.

As you’re putting together bids, you may find more work is required that you weren’t expecting. Plan for problems to come up, change orders and delays on materials, so you won’t get upside down with expenses or sideways with your contractor.

Before you make a decision on remodeling, make sure you are going to get what you want at the price you want to pay and that you’ll be happy with the results for at least several years to come.

If you’re not sure the remodel is the way to go, you can talk to your real estate professional. Be honest with your agent that you are considering remodeling, but that you are also open to finding another home. Your agent might know of homes for sale that have the size, features and finishes you’re wanting. After you view a few homes, you should have a better idea of what you want and what you like.

You and your agent will also discuss selling your home. He or she will create a comparative market analysis of similar homes to yours that have sold recently and are currently for sale so you’ll know what you can reasonably expect to net from the sale of your home. From these homes, you’ll learn how long homes are staying on the market and if other sellers are getting their asking prices. Together you and your real estate professional can discuss a price range for your home, based on its location and condition.

Keep in mind that all markets have ups and downs so what your agent can show you is only a snapshot of what’s true today. If you’re happy with where your home ranks amid the competition, then it should be a good time to list your home for sale.

Change is an evolution, and will bring some upheaval to your life. You’ll either have to open your home to workers or to buyers. But if you come out on the other side with what you and your household desire, it will all be worth it.

Market Commentary for the Week of December 15th

This week has only four monthly economic reports scheduled for release in addition to some key Fed events that could potentially affect mortgage rates. There is data set for release four of the five days, but the more important events will take place the middle of the week. We also need to watch stocks for influence on bond trading and mortgage rates following the recent slide in oil that negatively impacted stocks last week. Generally speaking, stock weakness should be good news for the bond and mortgage markets.
The week opens with November’s Industrial Production report mid-morning Monday. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Forecasts are calling for a 0.7% increase in output, indicating manufacturing growth. A smaller than expected rise would be good news for bonds, while a stronger reading may result in slightly higher mortgage pricing.
Next up is November’s Housing Starts at 8:30 AM ET Tuesday morning. This data isn’t known to be highly influential on bonds or mortgage pricing, but it does give us an indication of housing sector strength by tracking new home groundbreakings, so it is worth watching. Analysts are expecting to see an increase in new starts, indicating strength in the new home portion of the housing sector. Slowing starts would be favorable for the bond market, although a wide variance is likely needed for the data to cause noticeable movement in the markets or mortgage rates Tuesday.
November’s Consumer Price Index (CPI) will be released at 8:30 AM ET Wednesday. It is similar to last Friday’s Producer Price Index, except it tracks inflationary pressures at the more important consumer level of the economy. Current forecasts show a decline of 0.1% in the overall reading and an increase of 0.1% in the core data that excludes more volatile food and energy prices. This data is one of the most watched inflation indexes, which is extremely important to long-term securities such as mortgage related bonds. Rising inflation erodes the value of a bond’s future fixed interest payments, making them less appealing to investors. That translates into falling bond prices and rising mortgage rates. Therefore, weak readings would be favorable for the bond market and mortgage shoppers.
Wednesday also has some significant FOMC events that can be highly influential on the financial and mortgage markets. The two-day FOMC meeting that began Tuesday will adjourn at 2:00 PM ET Wednesday. It is widely expected that Ms. Yellen and company will not change key short-term interest rates at this meeting, but traders and analysts are anxious to get the Fed’s current economic forecasts and any indication of when they will make their first increase to key short-term rates. Also worth noting is that the meeting is ending earlier than the traditional 2:15 PM because it is one that will be followed by a press conference hosted by Fed Chair Yellen. The meeting will adjourn at 2:00 PM, forecasts will be posted at 2:00 PM and the press conference will begin at 2:30 PM. It is fairly safe to assume that all of that will lead to afternoon volatility in the markets and mortgage rates Wednesday.
The Conference Board will release their Leading Economic Indicators (LEI) for the month of November late Thursday morning. This release attempts to measure or predict economic activity over the next three to six months. It is expected to show a 0.5% increase, meaning that it is predicting economic growth over the next several months. This probably will not have much influence on bond prices or affect mortgage rates unless it shows a much stronger reading than forecasts. The weaker the reading, the better the news it is for bonds and mortgage pricing.
Overall, Wednesday is the key day of the week due to the CPI and the afternoon Fed schedule. The rest of the week’s data and events are considered to be only moderately important, so unless stocks make a major move higher or lower, we should see only minor changes to rates each day. I believe Friday is the best candidate for calmest day. Despite the lack of a lot of highly important data, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future as the markets can get crazy at any time.

What to Do When Your Identity Is Stolen

What if you were sitting down to review your mortgage paperwork, and were given a poor rate because of bad credit? And you knew you paid everything on time. You should have a score over 750! But you don’t because someone stole your identity, opened up a number of credit lines in your name, and never paid. If you think you should know because they would call, or you’d receive a bill at your address, you’d be mistaken. They can often use a different address and phone number claiming that you just moved. And unfortunately, it happens more often than you’d think, especially during the Holiday Season when you’re using credit cards a lot both in person and online.

Large companies like Home Depot, Toys R Us, and Kohl’s are often the target of identity thieves. It’s easy to open up a credit card, and they can buy items like gift cards. But because the actual amount is usually under $2000, the corporation doesn’t want to spend the time or money to prosecute. But your credit report shows you in default of $10,000.

So What Do I Do?

If your identity was stolen, you need to report it to your local police. A crime was committed, and it needs to be reported. Then you will use that report when you contact the major companies letting them know that a card was opened without your permission. They will be responsible for closing out the account and removing it from your credit file. You also need to put an alert on all three credit bureaus that you were a victim of identity theft. They will lock down your file and work with you and the corporations to remove the false items.

Unfortunately, it doesn’t always end there. Some companies will open up a line of credit, or will sign someone up for a cell phone without checking the report. They’ll just note if there is a credit score. Additionally, the thief might use your information to obtain health care benefits that could come back to you if the bills are unpaid. So even when you think you have things cleaned up, something new could show up even with a locked credit report. Therefore, you need to check regularly.

Here are some resources with checklists and links:

• NoLo Press
• FTC (Federal Trade Commission)
• BBB

Maybe your identity wasn’t fully stolen. But thieves can still draw on your checking or savings or charge against your credit card leaving you with no money and a huge bill.

Can I Prevent This From Happening?

It’s not fool-proof, but there are definitely things you can do to lessen the possibility of having your identity stolen.

1. Lock your credit reports down. It will cost you about $5-10 depending upon where you live and the fees vary by the reporting agency. The good news is that it will cut down on the junk mail you get. Secondly, it will cut down on your impulse purchases because you won’t be able to open up a credit card on the spot. You will need to plan ahead when you make purchases like a home or an automobile.
2. Shred, Shred, Shred. Any item that has personal and identifying information should be shredded before you recycle. This includes your medical statements, credit card statements, bank statements,
3. Change your passwords often. Don’t have them written down. This includes your PINs as well.
4. Review your statements carefully when they arrive. Yes, it’s easy to toss it into the “I’ll get to it later” pile, but the sooner you find something, the easier it is to fix it.
5. Never give your credit card number over the phone to an unsolicited caller. You may genuinely believe in their cause, but it’s best to have them send you a statement, and you can validate the address before you send it.
6. Avoid writing personal checks to people you don’t know. They can use all of the routing and banking information to print checks, and then write checks against your account.
7. Ask your credit card companies to stop sending you promotional checks against your account. Unlike checking accounts, credit card companies don’t keep a signature card, and these are easily used to draw money against your credit card.
8. When purchasing online, make sure you’re buying from a reputable place, and that it’s a secure transaction. You can verify that by looking up at the URL area and seeing if it tells you that it’s secure, or https.
9. Write “Please Ask for Photo ID” on the back of your credit cards in permanent ink. Some people recommend putting tape over it to prevent it from being modified. And then make sure you bring your photo ID with you. Some people recommend signing, but then the thief can practice your signature and use it for other things.
10. Get your credit reports annually and review them carefully.

We hope you never need to use this blog post! Have you ever known anyone who was the victim of identity theft?

Start Building Your Home’s Equity Now

by Blanche Evans

There are two ways to build equity, or ownership, in your home. One is to pay what you owe your lender which reduces the principle owed on your mortgage, and the other is to take advantage of market upswings which increase the value of your home. One way to build equity is to put more money down on the home you want to buy. Lenders have returned to tried and true models of income-to-debt ratios, requiring that borrowers put more money down when they purchase a home. While it’s still possible to get zero-down loans, such as those offered by the VA, most loans with low down payments require mortgage insurance.

For a conventional loan, one eligible for purchase on the secondary market by Fannie Mae or Freddie Mac, requirements are stricter, but there is also more leeway on eligibility. The minimum down payment required is as little as 3% to 5%, under special circumstances, including excellent credit and the willingness to pay private mortgage insurance. But to make sure the loan goes through, most borrowers are putting down as much as 20%.

The more you put down, the more equity you will instantly have. This is important because you need equity in order to sell your home one day so you don’t need to come up with additional cash at settlement.

As you make your house payments, you build equity slowly. The longer you own your home, the less you’ll pay in interest and a greater share will go toward ownership, or building equity.

For example, if you borrow $250,000 at 5%, your monthly payment is $1,342.05. Over 30 years, you’ll pay an additional $233,139 in interest for a total of $483,139.

The first month of paying your mortgage, you’ll pay $1041.67 in interest, and only $300.39 toward reducing your principal. At that rate, building equity may seem like it will take forever. But only two years later, your interest payment lowers to $1011.52 and $330.53 goes toward reducing what you owe your lender.

In five years, $383.91 goes toward reducing principal. To learn more, you can go online and look for mortgage calculators with amortization.

You can build equity faster by adding a little more to your payment, which can remove hundreds of dollars in interest from your payments and allows you to own your home in full much faster. You don’t have to refinance to do this — simply allow more to be deducted from your checking account to be applied to principle, or add an additional payment onto your payment coupon.

The second way to build equity is to allow the market to do it for you. Home values historically beat inflation by one to two percentage points, but the last decade has been anything but typical. However, all markets return to the norm, so assuming a normal market is on the way, your home should appreciate at least one percent annually.

If you purchased your home for $300,000, (hence the $250,000 mortgage), your home’s value should grow $3000 in one year. The next year, your $303,000 home is worth $306,030, and so on. This is all providing that your home’s condition remains exemplary, the jobs outlook continues to be positive, and other market variables go your way.

But one thing is certain, you can’t build equity unless you’re invested. If you want to take advantage of the recovering housing market to build equity, it’s time to invest in a home.

Market Commentary for the Week of December 8th

This week has only three pieces of monthly economic data scheduled for release in addition to a couple of Treasury auctions that have the potential to influence mortgage rates. Two of the economic releases are considered highly important though and the Treasury auctions are the more important set of auctions we regularly deal with, so despite the lack of a busy calendar we still should see noticeable movement in rates this week.
The first events we need to deal with are the two Treasury auctions. Wednesday’s 10-year Note auction is the more important one and will likely have a bigger influence on mortgage rates. Results of the sales will be posted at 1:00 PM ET each day. If they are met with a strong demand from investors, particularly international buyers, we should see strength in the broader bond market and improvements to mortgage pricing during afternoon hours those days. On the other hand, a weak interest in the auctions could lead to upward revisions to mortgage rates.
November’s Retail Sales report is scheduled for release Thursday at 8:30 AM ET. This report will give us a key measurement of consumer spending by tracking sales at retail level establishments. This data is highly important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rapidly rising consumer spending raises the possibility of seeing solid economic growth. Since long-term securities such as mortgage bonds are usually more appealing to investors during weaker economic conditions, a large increase in retail sales will likely drive bond prices lower and mortgage rates higher Thursday. Current forecasts are calling for an increase of 0.4% in November’s sales.
The second relevant report of the week will be November’s Producer Price Index (PPI) early Friday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices, giving a more stable reading for analysts to consider. If Friday’s release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond well and mortgage rates could fall. Current forecasts are showing a 0.1% decline in the overall index and a 0.1% rise in the core data.
The final report of the week is the release of December’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to change mortgage rates slightly if it shows a sizable miss from forecasts. Consumer sentiment or confidence is tracked because the more comfortable consumers are about their own financial situations, the more likely they are to make a large purchase in the near future. Since consumer spending makes up such a large part of our economy, any related data is watched closely. Friday’s release is expected to show a reading of 89.5, which would be a small rise from last month’s final reading of 88.8. A large decline in confidence would be considered good news for the bond market and mortgage rates.
Overall, I suspect Thursday will be the most active day of the week with the consumer spending data and 30-year Bond auction, but Friday’s data can also cause movement in rates. The calmest day will likely be Tuesday. It will probably be a calmer week than last week in terms of mortgage rate movement although we still should see rate changes multiple days. Accordingly, maintaining contact with your mortgage professional is still strongly recommended if still floating an interest rate.

What to Buy In December

Is your credit card fresh as a daisy or worn out after this past weekend with Black Friday and Cyber Monday?

Unlike May and June (wedding and graduation season), you can’t avoid buying stuff in December. There’s always some gift exchange or a deal you can not resist.

So what’s the best way to get more for your money? Read on!

If you’re buying toys, wait until closer to the middle of the month, but not much later. Prices will slowly decline until it reaches a point midway and then it will go up sharply. Retailers believe that if you’re searching for toys close to Christmas, you’re desperate and will pay a premium (and they may be right…)

Look for gift card promotions. Companies like Target will offer gift cards with certain purchases. Other retailers offer gift cards with certain levels (In prior years, we saw Outback and Chili’s advertise that if you bought a gift card for $100, you’d get a bonus gift card worth $25). Some places like iTunes are offering discounted gift cards ($50 card for $40)

Many airlines recently increased their fees for checked baggage, so pack lightly if you’re traveling.

It’s still a good time to buy tools and hardware. Look for significant discounts on drills, wrenches, general tool sets, lawn-care items, and more.

It’s also a great time for kitchenware and small appliances. Check Amazon for lightening deals as well as major retailers.

If you can stand the wait, many places start discounting fresh Christmas trees after the 20th of December. To get the best deal on Christmas decorations, though, you’ll have to wait until December 26th.

What to wait on? Calendars, electronics and jewelry. The Consumer Electronics Show in January is the official launch for many 2015 models, which means that all the goods from 2014 will begin to see a round of discounts. Waiting to buy a calendar is dicey if you really use your calendars, but if you wait until the end of January, you’ll get it for a lot less. Also, beware of gym membership deals. There will be better ones in a few months.

The lowest prices for televisions tend to be around the SuperBowl followed by Black Friday. However, that doesn’t mean there aren’t some really good deals out there now. Many retailers are pushing the plasma televisions since they’ve been end of life’d. Smart HDTVs are also seeing a big push.

Premium laptops will also be on sale this month. Budget and ultraportable were their cheapest last month.

Lifehacker is suggesting that now is the best time to sign up for golf clubs, have a pool installed, and stock up on champagne for that spring or summer wedding.

This is also a great time to buy wedding dresses and real estate, if you’re looking for a new home.

There are rumors abound that many retailers this Black Friday shopping season raised their prices, and then said that the sale price was half off. If the widget normally sold for $25, and they raised the price to $50 and gave you 50% off, you’d not be getting a bargain, now would you. And if you stayed out late, you’d have missed out on important things like sleep.

Thankfully for you, we’re looking out for tools that will help you save money. Here’s an article from CNET on 20+ tools for price watching. It includes a few for Amazon, one specifically for clothes, and others that send alerts when a price drops.

Who do you still have to buy presents for?

9 Reasons to Buy a House Right Now

by Jaymi Naciri

Buying a house is like having a baby: there’s no absolute perfect time to do either. The down payment-interest rate-economic factors-qualification quadrangle can be so confusing. Rising rates, loosening requirements, down payment options, buyer’s markets, seller’s markets – what does it all mean to you if you want to buy a home? The truth is that while the banks might have a magical formula to determine your mortgage-worthiness, determining if the time is right really comes down to three main questions:

• Do you want to buy a home?
• Are you financially prepared?
• Is your credit where it needs to be?

If yes, then go for it. Here are nine reasons to do it now.

1. Prices are good. According to the latest S&P/Case-Shiller report, home prices are still gaining, but have slowed. “The 10-City Composite gained 5.5% year-over-year and the 20-City 5.6%, both down from the 6.7% reported for July,” they said. “The National Index gained 5.1% annually in August compared to 5.6% in July.” This is good news if you were afraid that big price gains would put homeownership out of reach and also bodes well for your long-term equity once you purchase.

2. Rates are low. “Imagine paying over 18% interest on a 30-year fixed mortgage. It’s almost unthinkable. But that was the reality for home buyers in October 1981 — a year when the average rate was almost 17%,” said Yahoo Finance. “The average rate has been 5.18% since the start of this country’s history,” making today’s rates, which hover around historic lows at 4%, sound even better.

3. Loan requirements are softening. They’re not approaching the look-the-other-way-and-stamp-it-approved levels that led to the market crash, but the overly tough restrictions that followed have loosened. “Major lenders are making adjustments,” said The Street. “Wells Fargo has lowered the minimum FICO score for borrowers applying for loans insured by the Federal Housing Administration to 600 from 640.” They also count JPMorgan Chase’s lowered loan-to-value “standards in certain markets for both jumbos and conforming mortgages.” For buyers that can mean an easier road to loan approval, even without a ton of money upfront and perfect credit.

4. FHA loans make it even easier for first-time buyers. If your credit is less than stellar and you don’t have a large down payment, an FHA loan can get you in the door. Credit scores can be as low as 620 to qualify and only 3.5% down is required. Whether you’ve never bought before or have been out of the market for a few years, an FHA loan can be your answer.

5. Fewer buyers around the holidays means less competition for you and more negotiating power. “Sellers who are actively looking to sell their homes during the holiday months — namely, October through December — are serious about shedding the weight of their residences,” said US News. “This often works in favor of savvy buyers looking to get a deal on discounted homes. Having less competition on the buyer’s side can mean lower prices on homes, in addition to fewer counter-offers to compete against.”

6. Rates are predicted to rise. “The Mortgage Bankers Association expects the average rate on a 30-year, fixed rate mortgage to rise slowly to 5.1 percent by the end of 2015,” said the Washington Post. If you want to take advantage of low rates, now is the time.

7. Pent-up demand could zap affordability. “The housing market is about to get even more competitive,” said Yahoo. “The pent-up demand of younger professionals, who moved back in with their parents during the recession, is about to explode. This eager subset of buyers will create some steep competition for homes, especially if they have been saving up to make larger down payments or high ticket offers. If the current homes on the market have more potential buyers, bidding wars develop, and the purchase prices are driven up.

8. “Buying is cheaper than renting in most markets,” said Housingwire. With a little knowledge of loan options and low down payment programs, you can easily flip the switch from renter to homeowner.

9. Because you want to buy a home. There really is no more compelling reason than that. You want it. So make it happen.

Market Commentary for the Week of December 1st

This week has six economic reports set for release, including two that are considered to be highly important to the markets and mortgage rates. November’s manufacturing index from the Institute for Supply Management (ISM) is the first, coming at 10:00 AM ET Monday. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a decline in sentiment from October to November. October’s reading was previously announced as 59.0. A weaker reading than the expected 58.0 would be good news for the bond market and mortgage rates. A reading above 50 means that more surveyed business executives felt business improved during the month than those who felt it had worsened. The lower the reading the better the news it is for bonds because waning sentiment indicates a slowing manufacturing sector and makes broader economic growth less likely.
Tuesday has nothing of importance scheduled, but Wednesday has three. The first is the ADP Employment report before the markets open Wednesday morning, which has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs of the company’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a noticeable reaction to the report, it is on this week’s calendar. Analysts are expecting to see 228,000 new private-sector payrolls for November.
The next piece of data that we need to be concerned with also comes early Wednesday morning when revised 3rd Quarter Productivity numbers are posted. This index is expected to show a small upward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It’s the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 2.2%, up from the previous estimate of 2.0%. The higher the reading, the better the news for the bond market. Although, this report generally does not have a noticeable impact on mortgage pricing, so it will take a wide variance to draw much attention.
Later Wednesday, the Federal Reserve will release their Beige Book at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions by Fed region. That information is relied upon heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any noticeable changes from the last update. More times than not though, this report will not influence the markets enough to cause intra-day changes to mortgage rates, but the potential to do so does exist.
The biggest news of the week comes early Friday morning when the Labor Department posts November’s Employment figures. This is arguably the most important monthly report we see, so its impact on the markets and mortgage rates is often significant. It is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 5.8% while 225,000 new jobs were added to the economy. The income reading is forecasted to show an increase of 0.2%. An ideal scenario for mortgage shoppers would be a higher unemployment rate, a much smaller increase in payrolls (or a decline) and no change in the earnings reading. If we are fortunate enough to hit the trifecta with all three, we should see the stock markets fall, bond prices rise and mortgage rates move much lower Friday. However, stronger than expected readings would likely fuel a stock rally and bond sell-off that would lead to higher mortgage rates.
October’s Factory Orders report will close the week’s calendar late Friday morning. This report is similar to the Durable Goods Orders report that was released last week, except this one includes manufacturing orders for both durable and non-durable goods. This data usually doesn’t have a significant influence on bond trading, particularly when following a major event such as the Employment report. Analysts are expecting to see a 0.2% increase in new orders. The weaker the number, the better the news for bond prices and mortgage rates because it would signal manufacturing sector weakness.
Overall, look for Friday to be the most active day of the week but we could see noticeable movement in rates Monday also. The best candidate for calmest is Tuesday with nothing in terms of relevant economic data set for release. With so much on tap this week, there is plenty of opportunity to see large swings in the major market indexes and mortgage rates multiple days. Accordingly, it would be prudent to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Last Minute Thanksgiving Tips

Hopefully you have today off from work and all your shopping is done.

If not, don’t panic.

Tip number one is to reset expectations. If you’re having family over, remember that they’re family and they really don’t care how the house looks. They’re there to see you. So just make sure that you have space to hang up coats, ensure that the bathroom they’re to use is clean, and vacuum the areas where your guests will be hanging out. Place clutter in a box or in shopping bags and move them to a spare room.

Tip number two is make sure your turkey is fully thawed. If it’s not, that’s ok. You can thaw it out this evening, and then keep it in the refrigerator until you’re ready to roast, barbecue, or deep fry the bird.

USA Today suggests that you could even cook a turkey from the frozen state, and that it might turn out better because the frozen water in the breast slows the cooking, thus having the legs and breast meat done at the same time.

Just make sure you get the neck and bag of giblets out of the center cavity before you place it in the 325F oven.

Tip number three is to look for shortcuts. AllRecipes recommends some store-bought short-cuts for Thanksgiving:

1. Pies: hit the local bakery or grocery store for some pumpkin, apple, or berry pies. Add homemade touches by serving with real whipped cream and a cup of freshly brewed coffee.
2. Dinner rolls: whether they are frozen or fresh from a bakery, you can still get that “right from the oven” effect by wrapping them in foil and warming them at 350 degrees F for 10-15 minutes, while you’re baking the stuffing.
3. Easy appetizers: put out some fresh veggies, chips, or crackers with a delicious dip.

If you still haven’t shopped, try to get out this evening. The stores will tend to be packed until around 7pm. And tip number four is to have a list. Start now and then add to it as the day goes by. That way, you won’t have to run to the market tomorrow morning.

Tip number five is to find out if your store is open in the morning just in case you forgot something.

Tip number six is to consider using paper plates and plastic silverware to make cleaning up easier. If you do, purchase them today, and then set the table tonight if you can. It will be one less thing you have to do tomorrow.

Tip number seven is to make the stuffing or dressing today so it’s cooled down for when you stuff the bird, if you choose to stuff the bird. The turkey will cook faster if it’s not stuffed, but there are those people who love the stuffing with all the bird flavor baked into it.

Tip number eight is to prepare the potatoes today. If you do peel and cut up the potatoes, place them in a container with water. Then rinse them off right before you cook them. Your kitchen will stay cleaner if you don’t have peels all over the place.

Are you having a lot of people over to your place for Thanksgiving?

What If You Don't Own Your House for 2 Years?

If you owned and lived in your home for at least two years before it is sold, the law — today at least — is clear: you can exclude from profit up to $250,000 if you are single or $500,000 if you are married and file a joint return.

But what if you have made a profit on your house, but sell it before the magic two years spelled out in the tax law?

In l997, when Congress enacted this favorable legislation, it had absolutely no inkling that the real estate market in the early 2000’s would be so hot, and that so many homeowners would make such large profits on their home sales — even if they did not own their property for the full two years. However, Congress did provide reduced exclusions if prior to holding the property for the full two years, the homeowner had to sell due to a change in employment, health reasons or “unforseen circumstances”.

The IRS has established certain “safe harbors”. If the taxpayer falls within one of these safety zones, they will automatically be entitled to the appropriate exclusion of gain.

Here are some of the “safe harbors”:

Employment: If your new place of employment is at least 50 miles father from the residence sold than was the former place of employment, the homeowner who sells his/her home in order to be closer to the job can take a proportionate exclusion of gain. For example, if the homeowner owned the home for only one year, that homeowner would be entitled to exclude half of either the $250,000 or the $500,000 exclusion, depending on the marital and tax filing status of the taxpayer. According to the regulations, employment is defined as “the commencement of employment with a new employer, the continuation of employment with the same employer, or the commencement or continuation of self-employment.”

Health: if a doctor recommends a change of residence for reasons of health, this will be a safe harbor. What determines “health”? According to the IRS, “if the taxpayer’s primary reason for the sale is (l) to obtain, provide, or facilitate the diagnosis, cure, mitigation, or treatment of disease, illness, or injury… or (2) to obtain or provide medical or personal care for a qualified individual suffering from a disease, illness or injury.” It should be noted that “qualified individuals” includes family members who are in need of medical assistance away from the principal residence.

The IRS made it clear, however, that a sale of the family home merely because it is beneficial to the general health or well-being of the taxpayer will not fall within the safe harbor.

Unforseen Circumstances: Congress passed the buck to the IRS to come up with definitions — safe harbors — under this amorphous category. The IRS rose to the challenge, by providing that the following events would be considered “safe harbors”, on the condition that these events involve the taxpayer, his/her spouse, co-owner or a member of the taxpayer’s household:

1. death;
2. being terminated from employment and thus eligible for unemployment compensation;
3. a change in job status that results in the taxpayer being unable to pay the mortgage and reasonable basic living expenses for the taxpayer’s household;
4. divorce or legal separation;
5. multiple births resulting from the same pregnancy;
6. Involuntary conversion of the property — such as a condemnation by a governmental authority, and
7. destruction of the property because of a man-made disaster, an act or war or terrorism.

Additionally, the IRS kept the safe harbor door open by allowing the IRS Commissioner the right to expand these seven items should the need arise – either generally or in response to a particular situation involving a specific taxpayer.

Taxpayers who believe that they are entitled to claim an exemption because they fall into one of these safe harbors should immediately consult their tax advisors — and preferably before you sell.

Determining the safe harbor is the easy part; calculating the applicable exclusion may require a graduate degree in mathematics. According to the IRS, “to figure the portion of the gain allocated to the period of non-qualified use, multiply the gain by the following fraction:

Total nonqualified use during the period of ownership (after 2008 for 2013 tax returns) / Total period of ownership

For more information, check out IRS Publication 523, “Selling Your Home”, available free from irs.gov/publications.

Written by Benny L. Kass

Market Commentary for the Week of Thanksgiving

This holiday-shortened week brings us the release of six relevant economic reports for the markets to digest in addition to a couple of Treasury auctions that have the potential to affect rates. All of the week’s data is being posted over only two days, partly due to the Thanksgiving holiday, so the middle part of the week should be the most interesting for mortgage shoppers.

The week’s data starts early tomorrow morning when the first revision to the 3rd Quarter Gross Domestic Product (GDP) is posted at 8:30 AM ET. It is expected to show a small downward revision from last month’s preliminary reading of a 3.5% annual rate of growth. The GDP measures the total of all goods and services produced in the U.S. and is considered to be the benchmark measurement of economic growth. Current forecasts call for a reading of approximately 3.3%, meaning that there was a little less economic activity during the third quarter than previously thought. This would be good news for the bond market and mortgage rates because strengthening economic growth hurts bond prices and mortgage rates.

November’s Consumer Confidence Index (CCI) will be released late tomorrow morning by the Conference Board, giving us a measurement of consumer willingness to spend. If a consumer’s confidence in their own financial and employment situation is strong, analysts believe that they are more apt to make larger purchases, fueling economic growth. This is important because consumer spending makes up over two-thirds of the U.S. economy and makes long-term securities such as mortgage-related bonds less attractive to investors. Analysts are expecting to see an increase in confidence from last month’s level, meaning surveyed consumers were more optimistic about their own financial situations this month than they were last month. A weaker reading than the 96.0 that is expected would be good news for mortgage rates, while a stronger reading could push mortgage rates higher Tuesday.

Wednesday has the remaining four economic reports that we need to be concerned with. The first is October’s Durable Goods Orders at 8:30 AM ET. This data helps us measure manufacturing strength by tracking orders for big-ticket items or products that are expected to last three or more years, such as airplanes, appliances and electronics. This data is known to be quite volatile from month-to-month, so sizable swings from the previous month are fairly normal. It is expected to show a 0.6% decline in new orders. A larger than expected drop would be considered good news for the bond market and mortgage rates as it would indicate manufacturing sector weakness. However, we need to see a sizable variance from forecasts for the markets to have a noticeable reaction due to the usual volatility in the data.

October’s Personal Income and Outlays data is the second report of the day. This data measures consumers’ ability to spend and their current spending habits and is important because consumer spending is such a large part of the U.S. economy. It is expected to show that income rose 0.4% and that spending increased 0.3%. Weaker than expected readings would mean consumers had less money to spend and were spending less than thought. That would be favorable news for bonds and could lead to improvements in mortgage rates Wednesday morning.

The revised November reading to the University of Michigan’s Index of Consumer Sentiment will be posted just before 10:00 AM ET Wednesday morning. As with Tuesday’s CCI, it will give us a measurement of consumer willingness to spend. Analysts are expecting to see an upward revision to the preliminary reading of 89.4. kUnless we see a significant variance from the forecasted 89.9, I don’t think this data will cause much movement in mortgage rates Wednesday.

October’s New Home Sales report will close out the week’s economic calendar. It will give us an indication of housing sector strength, but is the week’s least important release. Analysts are expecting to see little change between September and October’s sales of newly constructed homes. It will take a large change in sales for this data to influence mortgage rates, partly because this report tracks such a small portion of all home sales.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Treasury Notes Tuesday and 7-year Notes on Wednesday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. However, strong investor demand usually make bonds more attractive to investors and brings more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but the stock and bond markets will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

Overall, I am expecting Wednesday to be the busiest day for the bond market and mortgage rates with four of the week’s reports scheduled, but Tuesday is likely to be pretty active also with the most important release scheduled (Durable Goods). There is nothing of importance scheduled for Monday, but Friday will likely be the calmest day of the week as many traders will be home for the long weekend rather than in the office working.

Planning for Black Friday Sales

Did you go out to shop on Black Friday last year? Or did you stay home and take advantage of the online sales from Thursday through Cyber Monday?

And, did you stick to your budget?

Financial advisers recommend reviewing past performance regularly in order to ensure that you are going to stay on track. So if last year, you budgeted $1000 and spent $1500, but then you spent $750 less the rest of the month, perhaps you should update the budget to $1300 or $1400 for your Black Friday/Cyber Monday and then look at reducing the other areas where you spent less last year.

If you know that you’re hosting the big Christmas Day party and you’ll be spending more on food, liquor, decoration and napkins, then figure out your budget for that, and look at reducing spending for gifts. (You really don’t want to sit in your house with the heat off and the lights out to try to save on your electricity to make up for overspending.)

Once you have your budget, it’s time to do your research. There are many sites (see Resources) that leak black Friday ads early. You can figure out what you want to buy, and who has the best price.

Additionally, look carefully at the fine print. You may be able to purchase the item online instead of having to go onsite. And also look to see if there are limited quantities. If not, you may be able to get a rain-check.

Map your strategy out carefully. Also, compare that to your values. You may be able to get a $97 television if you shop on Thursday, but you’re giving up spending Thanksgiving with your family.

The National Retail Federation offers these tips:

• Read store ads carefully. Is the store offering sale items at a limited quantity? Can you get a rain check if it’s an out-of-stock sale item?
• Use the Internet to compare prices, not just the Black Friday ads but also retailers’ regular websites.
• Take the ad with you when you go shopping to make sure you find the precise item at the price advertised. It’s often a good idea to go to the store now to see if the items you want have the quality and features you desire.
• Check to see if your favorite retailer offers an option to buy online and pick up in store. That will allow you to skip the frenzy and head to the customer service counter.
• Focus on bottom-line prices, not discounts. Discount claims may not reflect real savings if the seller inflated the original price of an item.
• Know retailers’ return and exchange policies. Some have a specified number of days in which to return items. Others will give the recipient credit for their after-holiday clearance price without a gift receipt, and some won’t let you return an item bought online to a physical store.

Resources

• Black Friday Ads
• BlackFriday.com
• Brad’s Black Friday
• dealnews.com
• TheBlackFriday.com

Spend time looking online this weekend. Last year, there were some better bargains on the Sunday before Black Friday.

Turkey Fryer Safety

Have you started brining your turkey yet (if you brine)?

Everyone has their perfect turkey recipe. Some brine, some don’t. Some roast and some barbecue on their grill.

And then there are the brave souls who fry their turkeys. If you’ve ever eaten fried turkey, you understand why. The turkey cooks evenly, and the breast meat is done at the same time as the legs and thighs.

For a fun four minutes, watch this segment from the tv show Good Eats about turkey fryer safety on YouTube.

And State Farm provides these 15 Turkey Fryer Safety Tips:

1. Keep outdoor fryers off decks, out of garages and a safe distance away from trees and other structures.
2. Make sure the turkey is thawed and dry before cooking. Ice or water that mixes into the hot oil can cause flare-ups.
3. Watch the weather. Never operate a fryer outdoors in the rain or snow.
4. Place the fryer on a level surface, and avoid moving it once it’s in use.
5. Leave 2 feet between the tank and the burner when using a propane-powered fryer.
6. Follow the manufacturer’s instructions to avoid overfilling. Oil can ignite when it makes contact with the burner.
7. Choose a smaller turkey for frying. A bird that’s 8 to 10 pounds is best; pass on turkeys over 12 pounds.
8. Never leave fryers unattended.
9. Purchase a fryer with temperature controls, and watch the oil temperature carefully. Cooking oil that is heated beyond its smoke point can catch fire. If you notice the oil is smoking, turn the fryer off.
10. Turn off the burner before lowering the turkey into the oil. Once the turkey is submerged, turn the burner on.
11. Wear goggles to shield your eyes, use oven mitts to protect your hands and arms and keep a grease-rated fire extinguisher close by.
12. Skip the stuffing when frying turkey, and avoid water-based marinades.
13. Keep children and pets away from the fryer at all times.
14. Once finished, carefully remove the pot from the burner, place it on a level surface and cover to let the oil cool overnight before disposing.
15. Opt for an oil-less fryer. This uses infrared heat, rather than oil, to cook the turkey

And the Underwriters Lab has a 2 minute video on turkey fryer safety tips as well as a list of potential hazards you should be aware of and tips on how to stay safer.

The two most important tips are to never leave the fryer unattended while it’s on, and never let children or pets near the fryer even if it is not in use. The oil inside the cooking pot can remain dangerously hot hours after use.

How will you be preparing your turkey this year?

Surviving the Thankgiving Holidays

Surviving the Holidays

You’ve already started planning for Black Friday sales. Hopefully you’ve started planning for Thanksgiving.

If not, then we’ll help you get on track in today’s post whether you’re a guest locally, whether you have to travel to the destination (and we mean a long journey, not across town), or if you’re hosting the big supper.

If You’re Hosting

Step one is to make sure you’ve gotten all your invitations out. Does your great Aunt Thelma know that she’s invited? If not, she may start making other plans.

Once you have your final count, plan on a few extra mouths since you never know who will show up. This is one gathering where you want extra food to send home leftovers.

Step two is to plan the meal. The big question is always how big of a bird do I need to buy (unless you’re going vegetarian. In which case, here’s a great site for planning a vegetarian Thanksgiving meal). The answer is about a pound per person. Also, if you need a really big turkey, consider buying two smaller ones as it’s easier to roast and ensure the quality. Plus, a smaller turkey tends to be more tender.

For more on sides, drinks and appetizers, here’s a great site at Dummies.com that details amounts to plan and prepare. Also, if you’re hosting, don’t be shy about asking people to bring things. It cuts down on the amount of work you have to do, and allows new dishes to be introduced.

Step three is to start preparing. If you will be using a frozen turkey, it will need at least a week in your fridge to thaw. Also, you can start buying a few items each time you go to the store such as the bags of stuffing one day, butter and spices the next. Set aside a special place for your Thanksgiving items so they don’t accidentally get used.

Then, start cleaning. If you start small and spend 15-20 minutes a day every day decluttering, decobwebbing, and de-dusting, it won’t feel like such a stressful burden. Also, call now and set up a housecleaning appointment for that Monday or Tuesday. You will have everything picked up by then, and a professional can come in and do a professional cleaning. There are places out there where you can schedule by blocks of time rather than a standard cleaning service.

Step four starts the day before. If you’re going to make a pie, make them now. Set the table. Put out flowers or whatever decorations you want. Plan your day. For example, if you know your turkey needs to be in the oven by noon, plan to start making the stuffing at 11 so it has time to cool down, and you have time to preheat the oven, wash, dry, butter up and stuff (if you do stuff) your turkey.

Step five is the day of Thanksgiving. Follow your plan and make sure you take time out to relax. And once you have the turkey out of the oven, you’ll have time to toss in the wine, beer, soda and juice to chill.

If You’re Traveling

If you’re taking a long trip, remember that this is the busiest time of the year to travel, so expect a lot of delays. Check the weather reports and flight reports at ifly.com frequently. Get to the airport early.

And to reduce your stress, start packing the week before so you don’t forget anything.

Also consider mailing items like clothes to your destination so you only have to worry about a carry-on if you’re flying.

If you’re driving, take time to map out your journey and plan for regular stops to stretch your legs (about every hour if you have kids).

If possible, try to arrive at least a day beforehand so you can rest up from traveling and be your best on Thanksgiving.

If You’re Visiting

Always offer to bring something. If the host and hostess insist you can’t, bring a bottle of something or flowers. Also consider bringing items that they could use later like a box of cookies or chocolates. If you do bring wine or scotch or brandy, don’t expect it to be served. They may or they may have already planned their beverages. However, if you bring a non-alcoholic beverage because it’s what you intend to drink, you should be able to find some space in the fridge.

Offer to arrive early to help finish cooking or setting up.

And always help clear the dishes and offer to wash or dry.

But otherwise, your main job is to have fun.

If You’re Not Planning Anything

It’s happened to everyone where family is out of town, etc. So, first find out if any of your friends have plans. If not, then put together a group and hit a buffet on the town. There are some wonderful places to dig in. Look for hotels to have extravagant spreads.

And you may not know it, but it’s a great time to go out to the movies because they aren’t crowded.

Finally, it’s not too late to plan a quick trip to somewhere warm for a long weekend.

Don’t be stressed if it looks like you don’t have anything to do. Figure out what you enjoy, and then make it happen.

So, which will you be doing this Thanksgiving?

5 Ways Bargain Hunting for Homes Can Backfire

It’s natural to want to save money when you’re making a purchase as large as a home. You want to buy the best home in the best neighborhood at the best price, and to do that, you may think you have to shop in the bargain bin.

FSBOs (for sale by owner,) foreclosures, and short sales aren’t as plentiful as equity listed homes — homes listed with a real estate agent by the seller. You may even scour the MLS (multiple listing service) for signs of desperate sellers, such as homes priced AS-IS, or homes that have been on the market for months.

While some people are successful buying a bargain basement home, you may not be so fortunate, if you put price first. Here are five ways a low price can backfire on you:

The home doesn’t suit your needs. A home is a good buy only if it suits your family’s needs for space, features, comfort, and function. If you buy a home without enough bedrooms or baths, it’s not as comfortable or functional.

A bad fit costs you later. To get out of a home that’s too small, too old, or too far from where you need to be, you’ll likely to pay more in transaction costs to sell the home and buy another than if you’d chosen more wisely in the first place.

Bargains are rare. If a home is priced lower than others in the area, there’s a reason. Sometimes bank-owned home will appear to be a bargain compared to other similar nearby homes, but you may notice a real difference in the way it’s been maintained. It’s not much of a bargain if you find out that all the appliances have been stolen or all the copper wiring has been pulled out of the walls.

The home needs updating. A home priced below market value usually requires expensive repairs or updates. Are you willing to perform the work or pay someone else to do the work? Any remodeling you do will be at today’s prices. Before you buy, get a home inspection and then talk to professionals who can help you bring the home up to today’s standards.

You lose ground trying to lowball the seller. Just as you want the home you buy to appreciate in value, sellers purchased their homes as investments, too. They want to net as much as possible, because they’ve already taken on the risks of buying and maintaining a home. That makes sellers less willing to negotiate on homes that are well priced and well maintained.

If a home has been on the market for a long time without a price reduction, there’s usually a good reason. You have an unmotivated, unrealistic, or upside-down seller, any of which could waste your time unmercifully.

An unmotivated or unrealistic seller simply won’t negotiate to your level. For example, for-sale-by-owner homes are typically priced the same as listed homes, even though the sellers aren’t paying real estate agent commissions, including for your agent, if you have one. Why would you pay the seller not to represent your interests?

Furthermore, a bank foreclosure or bank-approved short sale could take months to close. What if interest rates go up before you close? You may get the home at a bargain price, but the savings could evaporate in higher interest payments.

Right now, home prices are still below previous market highs. Mortgage interest rates are hovering near historic lows. And inventory levels are improving in most areas.

Under these circumstances, you’re buying a home at a bargain already. The best strategy for today is not to try to beat the seller down, but to offer a fair price for the home you think is best for your household.

Written by Blanche Evans

Market Commentary for the Week of November 17th

This week has six economic reports scheduled for release that are relevant to mortgage rates in addition to the minutes from last month’s FOMC meeting. A couple of the reports are considered highly important to the markets, meaning we could see noticeable movement in rates more than one day. This is especially true if stocks make a noticeable move higher or lower any particular day.
October’s Industrial Production data will start the week’s activities at 9:15 AM ET Monday. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.2% increase in production, indicating little strength in the manufacturing sector. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this report is not expected to greatly influence the markets. Therefore, it will likely take a sizable variance from forecasts for it to have a noticeable impact on Monday’s mortgage pricing.
Tuesday’s only report is October’s Producer Price Index (PPI) at 8:30 AM ET, which is one of the two key inflation readings on tap this week. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Signs of rapidly rising inflation make long-term securities such as mortgage-related bonds less attractive to investors and leads to higher mortgage rates. The overall reading is expected to show a 0.2% decline from September’s level while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while a larger than forecasted increase in the core reading could lead to higher mortgage rates Tuesday morning.
October’s Housing Starts is Wednesday’s only economic data worth watching. This report gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts’ forecasts. It is expected to show an increase in starts of new homes, meaning the new home portion of the housing sector strengthened last month.
Also worth noting is the release of the minutes from the last FOMC meeting Wednesday afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy, particularly when the first rate increase will come. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising, we may see some movement in rates Wednesday afternoon, but it is more likely there will be little reaction.
Thursday has three reports scheduled that may have an impact on mortgage rates. The first is the most important of the three. That is October’s Consumer Price Index (CPI) from the Labor Department at 8:30 AM ET. The CPI measures inflationary pressures at the consumer level of the economy and is one of the most important reports the bond market sees each month. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see a 0.1% decline in the overall reading and a 0.1% increase in the core data.
The second is October’s Existing Home Sales data from the National Association of Realtors at 10:00 AM. It gives us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. This report is expected to show little change, meaning the housing sector was flat last month. That would be relatively good news for the bond market and mortgage pricing, but unless it shows a significant surprise, it will likely not have a major impact on mortgage rates.
The final report of the week will come from the Conference Board, also at 10:00 AM ET Thursday, when they release their Leading Economic Indicators (LEI) for October. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.6% increase, meaning economic activity will likely rise fairly quickly over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to miss forecasts by a wide margin from forecasts for it to affect mortgage rates.
Overall, the most active day of the week will probably be Thursday with three reports being posted, one of which is the most important of the six scheduled. Wednesday afternoon also has the potential to be volatile if the FOMC minutes reveal a significant surprise. The best candidate for calmest day in rates is Friday. With data set for release four of the five days, it could end up being another active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if floating an interest rate and closing in the near future.

Colonial Architecture History

During the 1780’s the most popular style of architecture was the American Colonial. Built mostly by wealthy Anglo Americans, the houses afforded several distinct styles depending on where the home was located.

Also known as Colonial Georgian, these homes were the earliest style to grace the U.S. colonies. One example of early American Colonial architecture is called a Saltbox. The Saltbox is a wooden frame house with a high-pitched roof that slopes down to the back. Its flat front has two stories while the back of the house has only one, making the sides unequal, but distinctly looking just like an old salt box which was a wooden box with a lid which salt was kept.



Other types of Colonial Architectures are Pennsylvania Dutch, French, Southern, and First Period.

Generally, the chimney was centrally located, making the house, from a distance, look like a box with a lid and handle to lift it off. Other defining characteristics of American Colonial architecture are the square, symmetrical shape, the front door placed directly in the middle of the houses front and the even, straight line of windows throughout. Inside the front door are usually an entryway and a staircase. All rooms branch off these.

Typically they were constructed of brick with wood trim, but with homes like the Saltbox, they were also timber frame homes constructed with woodworking joints instead of metal nails, since they were costly. Saltbox homes were also finished with wood siding.

To maximize light in the North, the homes faced southeast. And those in the warm South faced northwest.

Another type of Colonial Architecture is inspired by the Spanish colonials and is often seen in churches and missions. This led to California Mission Architecture.

There was a revival of Colonial style from 1880-1960. These homes were characterized by:

• A symmetrical façade, but may have side porches or sunrooms on either or both sides.
• Rectangular mass
• 1 – 2+ stories
• Usually a medium pitch, side-gable roof with narrow eaves. Hipped roofs and dormers are occasionally seen.
• Multi-pane (six-over-six or six-over-one lights are common), double-hung windows with correctly proportioned shutters, bay windows.
• The entrance is centered and accented with columns, pilasters, pediment, and/or maybe hooded to create a covered porch. It may have a fanlight or transom, sidelights, and/or a paneled door
• Brick or wood clapboard is the most common siding, but shingle is occasionally seen especially on more informal New England style Capes.
• Other design elements may include classical columns, two-story pilasters, quoins at corners, dentil trim under eaves, or Palladian windows.

You can see similar design elements in modern homes. Would you like the big kitchen of a Colonial home?

Mortgage News Roundup - What to Know as You Try to Lock in a Low Mortgage Rate

Thursday’s bond market has opened in positive territory despite early strength in stocks. The major stock indexes are showing relatively minor gains with the Dow up 51 points and the Nasdaq up 26 points. The bond market is currently up 4/32 (2.35%), but due to weakness late yesterday we will likely see little change in this morning’s mortgage rates if comparing to yesterday’s morning pricing.

Mortgage rates for 30-year fixed mortgages were unchanged this week, with the current rate borrowers were quoted on Zillow Mortgages at 3.90 percent, the same as this time last week.

The 30-year fixed mortgage rate fell early in the week, then spiked to 4.02 percent on Tuesday before settling to the current rate.

“Last week, rates dipped after Friday’s weaker-than-expected jobs report,” said Erin Lantz, vice president of mortgages at Zillow. “This week, with limited economic data scheduled for release and the bond market closed for Veterans Day, we expect rate movement to remain fairly muted.”

Additionally, the 15-year fixed mortgage rate this morning was 3.04 percent, and for 5/1 ARMs, the rate was 2.88 percent.

What to Know as You Try to Lock in a Low Mortgage Rate

Because of these consistently lower rates, people are asking how they can refinance or lock in a new mortgage at the lower rate. Here’s a rate reference guide to help you navigate this market and obtain the best terms on your financing.

Understanding the rate market: Most home mortgages in the U.S. are eventually packaged into bonds, and rates change as mortgage bonds trade in the open market each day. This is also why we post the Market Commentary on Monday’s so you can see what may impact mortgage rates during the week.

Lender rate quotes explained: A professional loan officer will take the time to explain each fee line-by-line as well as how your rates may change if you are applying for a variable interest rate.

Rate lock tips for refinancers and homebuyers: Once you’re ready to buy or refinance, you’ll want to lock in your rate, which guarantees that rate for a set number of days. However, timing is critical. If you lock in a rate and you haven’t submitted an application to your lender, then you’re unlikely to close on time for the locked rate. This is true for both new loans and refinancing.

Does Your Credit Score Affect Your Homeowners Insurance?

Yes. Your credit score plays a role in the homeowners insurance premium that you will pay once you purchase a home. Insurance companies use information in your credit report to calculate an insurance score. These are similar to credit scores. Insurance companies use these scores to help them predict losses by determining which consumers are more likely to file claims.

Insurers also consider your prior insurance claim history, the construction type of your home, the distance of your home from fire hydrants, fire stations and whether or not you have smoke detectors, fire alarms and a security alarm in your home plus other factors that vary from company to company.