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.

Veterans Day - Honoring All Who Served - Thank You

Veterans Day

We want to thank everyone who has served and is serving in the military. We greatly appreciate your service.

Believe it or not, many Americans mistakenly believe that Veterans Day is the day America sets aside to honor American military personnel who died in battle or as a result of wounds sustained from combat. That’s not quite true. Memorial Day is the day set aside to honor America’s war dead.
 

 Veterans Day, on the other hand, honors all American veterans, both living and dead. In fact, Veterans Day is largely intended to thank living veterans for dedicated and loyal service to their country. November 11 of each year is the day that we ensure veterans know that we deeply appreciate the sacrifices they have made in the lives to keep our country free.

It is a federal holiday that is observed on November 11 regardless of what day of the week it falls on. It coincides with other holidays such as Armistice Day and Remembrance Day, which are celebrated in other parts of the world and also mark the anniversary of the end of World War I (major hostilities of World War I were formally ended at the 11th hour of the 11th day of the 11th month of 1918, when the Armistice with Germany went into effect). The United States also originally observed
Armistice Day; it then evolved into the current Veterans Day holiday in 1954.

In 1947, Raymond Weeks, of Birmingham Ala., organized a “Veterans Day” parade on November 11th to honor all of America’s veterans for their loyal and dedicated service. Shortly thereafter, Congressman Edward H. Rees of Kansas introduced the legislation changing the name of Armistice Day to Veterans Day in order to honor all veterans who have served the United States in all wars.

On October 8, 1954, President Eisenhower signed a bill proclaiming November 11 as Veterans Day, and called upon Americans everywhere to rededicate themselves to the cause of peace. He issued a Presidential Order directing the head of the Veterans Administration (now called the Department of Veterans Affairs), to form a Veterans Day National Committee to organize and oversee the national observance of Veterans Day.

Congress passed legislation in 1968 to move Veterans Day to the fourth Monday in October. However as it became apparent that November 11th was historically significant to many Americans, in 1978, Congress reversed itself and returned the holiday to its traditional date.

Veterans Day Facts

• In 1954, President Eisenhower officially changed the name of the holiday from Armistice Day to Veterans Day.
• In 1968, the Uniform Holidays Bill was passed by Congress, which moved the celebration of Veterans Day to the fourth Monday in October. The law went into effect in 1971, but in 1975 President Ford returned Veterans Day to November 11, due to the important historical significance of the date.
• Britain, France, Australia and Canada also commemorate the veterans of World Wars I and II on or near November 11th: Canada has Remembrance Day, while Britain has Remembrance Sunday (the second Sunday of November). In Europe, Britain and the Commonwealth countries it is common to observe two minutes of silence at 11 a.m. every November 11.

Mortgage News Roundup - 5 Common Problems for Home Sellers

Housing prices have leveled off. Mortgage interest rates are still affordable. But they won’t stay that way for long. The Feds continue to ease up on purchasing bonds so rates are slowly creeping up again.

The Mortgage Bankers Association (MBA) released its weekly report on mortgage applications Wednesday morning, noting a decrease of 2.6% in the group’s seasonally adjusted composite index for the week ending October 31. That followed a drop of 6.6% for the previous week. Mortgage loan rates rose during the week on three types of loans and remained unchanged on two others.

Now is definitely the time to talk with a professional loan officer to find out what options you have.

5 Common Problems for Home-Sellers

Here are five things sellers commonly try to hide during the sales process, and the questions you can ask to find out the truth about your soon to be dream home before it becomes a nightmare.

1. Leaks – roof, faucet, ceilings, whatever you can think of. If it can leak, you can bet it will be hidden or repaired just enough to not show.
2. Pests – termites, rats, ants. Some states require by law that the seller disclose, but if they don’t officially know, they don’t have anything to officially disclose.
3. “Emotional defects” – Is the house haunted? Was there a murder? Under California Civil Code Section 1710.2, if someone dies on the property, it’s a material defect and must be disclosed but only if the death occurred within three years of the date you make an offer to purchase or rent the home.
4. Problems with the foundation or roof – some damage may be hidden behind sheetrock
5. Age of systems – HVAC, water heaters, electrical

Always get a reputable home inspector in to do a thorough evaluation. You can also hire people do do deeper searches on the history of the home if you have concerns about if there were deaths.

How long to refinance a mortgage

USA Today answered this question. Generally between 30-45 days. It can be sped up if the borrower returns documents, disclosures and requests for information.

You Make Boatloads of Cash, but Still Can’t Get a Mortgage?!

When you apply for a mortgage, there are a few no-brainer items almost every borrower knows the lender will look at: your credit scores, your income and your debts.

But a mortgage lender looks at more then just the numbers. They review your income as a means to offset your mortgage payment liability. As a rule of thumb, the lender will want your income to be 55% greater than your outgoing mortgage payment, plus other liabilities such as car loans, student loans, or credit card payments. The lenders look at your ability to consistently pay on your obligations.

So, if you have alternate income, here’s how to make it work for you.

• If you intend to rent out a room, that won’t count towards your income. The only way it will is if it’s a multi-unit structure where the second unit has a bedroom, bathroom, and an honest to goodness kitchen. Mother-in-law units could work.
• Cash from side jobs or any other income that you receive but don’t report to the IRS won’t be considered real income. Lenders will expect to see your last two months of asset statements.
• The biggest mistake self-employed borrowers usually make when they apply for a mortgage is thinking they earn more money than they really do. Lenders don’t use gross receipts to qualify a borrower. They use the net income figures after expenses including depletion, depreciation, business use of the home and net profits.

A reputable loan officer will be able to work with you to provide the best documentation for your situation.

Market Commentary for the Week of November 3rd

This week brings us the release of five economic reports for the markets to digest with two of those reports being much more important than the others. The first release of the week will come from the Institute for Supply Management (ISM), who will post their manufacturing index at 10:00 AM ET Monday. This index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month, partly because it is the first report every month that tracks the preceding month’s activity. Monday’s release is expected to show a reading of 56.2, indicating that manufacturer sentiment slipped from September’s level. This means fewer surveyed manufacturing executives felt business improved during the month than in September, hinting at slower manufacturing sector growth. A smaller than expected reading would be good news for bonds and likely lead to lower mortgage rates Monday.

The second report of the week will be September’s Factory Orders data at 10:00 AM ET Tuesday. This report is similar to last week’s Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show a 0.5% decline in new orders from August’s level. A larger decline would be good news for the bond market and mortgage rates while an unexpected rise would be bad news and could push rates slightly higher Tuesday morning since it would indicate economic strength. It is worth noting though, that this report is not considered to be highly important to mortgage rates.

Wednesday’s only report worth watching is the ADP Employment report before the markets open. It has the potential to cause some movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP’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 accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have seen reaction to the report recently, we should be watching it. Analysts are expecting it to show that 220,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

The 3rd Quarter Productivity reading will be released Thursday at 8:30 AM ET. It is expected to show a 1.4% increase in worker productivity during the third quarter. A larger increase would be good news for the bond market because higher levels of employee productivity allow the economy to expand without inflationary pressures being a concern. This is a relatively low importance report, meaning it will take a significant variance from forecasts for it to directly affect mortgage rates.

The last report of the week is the most important. Friday brings us the release of arguably the most important monthly piece of economic news- the Employment report. The Labor Department will post October’s employment stats early Friday morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate, holding at 5.9%, an increase in payrolls of approximately 235,000 and a 0.2% increase in average earnings. Weaker than expected readings should renew concerns about the labor market and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news.

Overall, the single most important day is Friday but Monday is likely to be pretty active also. Tuesday will probably be the calmest day unless something unexpected happens. We have relevant data set for release each day of the week and stocks have been volatile recently, so this leads me to believe that we will see another active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if still floating a rate and closing in the near future.

Daylight Savings Time - Does It Save Energy?

Daylight Savings Time

It’s happening this Sunday at 2am. We spring forward and set our clocks back one hour. Most of us will do that Saturday before we go to bed.

Some of us may not need to do that at all. Computers, phones, and televisions now automatically change time for us.

Those of us old enough to remember, it was fairly time consuming (yes, sorry, pun intended) to go around and find every clock in the house as well as wrist-watches.

And I hear you asking: why do we do this? Does it really provide a benefit or should we go Hawaii and Arizona on the Daylight Savings?

How Did It All Begin?

If we have to “blame” anyone for our sleep deprivation, it would be the Germans back in 1916 in an effort to conserve fuel. Of course, they didn’t change their clocks until May 1st. The plan was not adopted here until the Standard Time Act of March 19, 1918, which established our standard time zones and set summer DST to begin on March 31, 1918. The idea was unpopular even then, and Congress abolished DST after the war, overriding President Woodrow Wilson’s veto.

Daylight Savings became a local option until FDR made it mandatory in 1942. He called it “War Time” rather than Daylight Savings, and it was in effect until 1945.

Local regions went back to choosing whether they wanted to adjust time to save fuel or not until 1962.

By 1962 the transportation industry found the lack of consistency confusing enough to push for federal regulation. The result was the Uniform Time Act of 1966 (P.L. 89-387). Beginning in 1967, the law defined standard time within the established time zones and provided for adjusting time. Clocks would be advanced one hour beginning at 2:00 a.m. on the last Sunday in April and turned back one hour at 2:00 a.m. on the last Sunday in October. States were allowed to exempt themselves from DST as long as the entire state did so.

In 1986 Congress enacted P.L. 99-359, amending the Uniform Time Act by changing the beginning of DST to the first Sunday in April and having the end remain the last Sunday in October.

The Energy Policy Act of 2005, DST was extended in the United States effective March, 2007 when DST would begin on the second Sunday of March and end on the first Sunday of November.

Does It Save Energy

It probably used to but it’s not so true anymore.

DST’s potential to save energy comes primarily from its effects on residential lighting, which only consumes about 3.5% of electricity in the United States and Canada. Delaying the time of sunset and sunrise reduces the use of artificial light in the evening but it increases it in the morning. So there isn’t much savings.

Plus, it doesn’t impact the usage of people working early or late in the office.

How Can I Recover More Easily

We could try to tell you to start changing your habits weeks in advance (like we do with getting school kids back on a regular schedule after Summer), but the truth is, there’s not a lot you can do.

So, the number one thing is to get as good of a night’s sleep as you can Sunday night. Don’t drink alcohol as it will disrupt your sleeping patterns. Exercise lightly when you wake up to help get the blood flowing.

Drink coffee or tea if caffeine’s your thing.

Be extra cautious when driving. There are more accidents in the few weeks after a time change than normal, even when we get that extra hour’s sleep. And we trust you to be a good driver, we just don’t trust everyone else out there.

Look into shifting your hours for a few days, maybe going in earlier and leaving earlier (and then taking a short nap when you get home), or going in a little later while you adjust your internal clock to the new time.

If we had a referendum to change the state to not be on Daylight Savings, would you vote for it? Or do you like having more hours during the summer for exercise or playing outside?