How To Keep Your Home Clean And Fresh

Keeping your home clean and tidy can sometimes feel like too tough a challenge. But no matter how often you clean, the house seems to get dirty again before the floors have even dried. For those who don’t have hours to spend cleaning, worry not! There are simple, effective ways to keep your home clean on a daily basis. Here are some tips to consider:

Buy doormats. Placing doormats at your back and front doors helps cut the amount of dirt and debris trailing into your home. Placing additional mats outside can help cut even more.

Groom pets daily. Pet hair — especially cat and short-haired dog hair — can invade your home in an instant. Brushing your pets every day — and giving your dogs a bath every now and again — can do a lot to help.

Keep ducts and fans clean. Air vents and ceiling fans build up dust over time. When they’re turned on, that dust is then transferred to your floors and furniture. Cleaning them regularly will reduce the amount of dirt flowing throughout your home. If you need professional help, you can generally get your ducts and vents cleaned for about $330 (the national cost average).

Replace air filters. If the air feels stale or musty, there’s a chance you need to replace your air filter. Do so frequently to avoid too much debris entering into the air. You can also hire a pro to do this for you.

Remove window screens. Window screens don’t really prevent dirt and debris from entering your home — just bugs, really. Unless you have small children, it’s better to remove them; removing the screens will keep your windows cleaner.

Keep storage handy. Storage boxes are always good to have on hand. Keep some broken down in your closet or under the bed for easy access. You can also build shelves for a relatively inexpensive cost.

Organize the coffee table. Coffee tables get cluttered quickly. Make sure you keep only the bare essentials on the table — and clean the table’s surface often.

Make sure your floor is showing. If you have kids or pets, there’s a good chance that your floor is littered with toys. You can teach kids how to pick up after themselves, depending on their age. But with pets, you may need to keep another storage box handy.

Dust Regularly You shouldn’t have to spend hours dusting your home on the weekends. Take a moment or two to wipe off surfaces once a week. This keeps the dirt down and makes your house look a bit shinier.

Create a place for every item. You should have a designated place for every item you use. Racks, shelving — whatever you need to keep everything organized. That way, items don’t end up piled on your dining room table or in the living room.

Written by Andrea Davis

Market Commentary for the Week of January 25th

 

This week is quite busy with six economic reports along with other events that are relevant to bond trading and mortgage rates. In addition to those six reports, there is also a two-day FOMC meeting and a couple of Treasury auctions that have the potential to affect bond trading enough to slightly move rates. There is nothing of importance set for release Monday, but we still should see some movements in the markets due to this weekend’s weather-related news and expected volatility in stocks.

The week’s calendar kicks off Tuesday with January’s Consumer Confidence Index (CCI) at 10:00 AM ET. This report is considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from December’s reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 96.8 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher Tuesday.

December’s New Home Sales will be released late Wednesday morning. It is considered to be the sister release to last week’s Existing Home Sales, giving us a small snapshot of housing sector strength. It tracks a much smaller portion of home sales than last week’s report did and is forecasted to show an increase in sales of newly constructed homes. However, this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts.

This year’s first FOMC meeting that begins Tuesday will adjourn Wednesday at 2:00 PM ET. There was a decent chance of this meeting yielding another quarter point increase to key short-term interest rates before the recent sell-off in stocks and oil costs. However, I believe the significant selling in stocks may alter the Fed’s monetary policy plans, at least temporarily. A rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets Wednesday is a strong possibility following the post-meeting statement release.

Thursday’s only relevant monthly report is December’s Durable Goods Orders at 8:30 AM ET. It helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. These are also known as big-ticket items and include things such appliances, electronics and airplanes. The data is known to be quite volatile from month-to-month, but is currently expected to show a decline in orders of approximately 0.5%. A large drop in orders would be considered good news for bonds and mortgage rates. Even though this an important report, a slight variance likely will have little impact on Thursday’s mortgage pricing because of the large swings that are common in the data. Bond traders would prefer to see a large decline that would indicate weakness in the manufacturing sector.

Friday has the remaining three reports, starting with what is arguably the single most important economic report that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Friday’s release is the first of three we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter’s first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of only 0.9%. A noticeably weaker reading would be great news for the bond market, questioning the strength of our economy. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower Friday morning. However, a larger than expected increase, indicating the economy was stronger than thought, will probably fuel bond selling and lead to higher mortgage rates.

The second release of the day will be the 4th Quarter Employment Cost Index (ECI), also at 8:30 AM ET. This index measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and businesses usually need to charge more for their products and services. The report is considered moderately important and usually has more of an impact on the bond market than the stock markets. Current forecasts are showing an increase of 0.6%. A lower than expected reading would be favorable to bonds and mortgage rates Friday, but unless we see a large variance from forecasts and no surprises in the GDP, I am not expecting this report to have much of an influence on rates.

The final economic report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment just before 10:00 AM ET Friday. This index is another measurement of consumer confidence that is thought to indicate consumer willingness to spend. I don’t see this data having much of an influence on the markets or mortgage rates unless we see a large revision from the preliminary reading of 92.6.

Also worth noting, there are two relatively important Treasury auctions for the markets to digest. The Fed will auction 5-year and 7-year Treasury Notes Wednesday and Thursday respectively. If the sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates mid-afternoon Wednesday and/or Thursday.

Overall, Wednesday is a pretty safe bet as most important for mortgage rates but Friday is also a key day. Wednesday has the FOMC meeting adjournment that is always big news and Friday’s GDP report is highly important also. And stocks can affect bond trading and mortgage pricing any day, as we have seen with all the recent volatility. With all of this scheduled, there is a decent chance of seeing a very active week in mortgage rates this week. Therefore, please maintain constant contact with your mortgage professional if still floating an interest rate and closing in the near future.

Easy Ways to Pay Down Your Mortgage

 

It may seem a huge task – paying down your mortgage early. But you’d be surprised how small things can make a big difference and give you a great sense of security and freedom.

The first is one you’ve already heard. Instead of paying one payment a month, split the amount in half and pay twice a month. You may think you’re paying the same amount wouldn’t have any impact, but you’re paying down the principal faster thus making the interest accrue less quickly.

If you get a windfall or bonus, instead of spending the money, make a lump sum payment on your mortgage. If you got a holiday bonus, make an extra payment on your mortgage in January. It will go completely towards the non-interest portion of your loan and reduce the amount you owe for the rest of the year.

 

For example, a $500,000 mortgage with an interest rate of 4.53 percent (the rate as of January 2, 2014 as reported by Freddie Mac), would have a monthly payment of $2,542. By making an extra payment of the same amount at the beginning of the year, you will shorten the loan payoff from 30 years to 26 years.

 

While four years may not seem like a huge difference, that time translates into big savings. By paying off this home loan four years early, you would save $67,582 in interest.

If you have an adjustable rate, and the amount you’re supposed to pay every month goes down, keep paying the same amount. You’re used to paying it, and once again, the extra will go towards paying down the principal.

So why do I keep bringing up paying down the principle? Did you know that with a 30 year mortgage at 7%, that about 80% of all your mortgage payments during the first 5 years of the loan are interest? The sooner you start chipping away at the base amount, the less you’ll pay over the term of the loan.

So what are some other ideas?

Talk to a reputable loan officer about refinancing. As we mentioned in a prior post, there are refinancing options out there that will allow you to get a lower interest rate for the same term that you’re at. So if you’ve been paying for four years, you can refinance for 26 years rather then 30 again.

If your credit card offers you money back, use the money towards your mortgage.

And finally, always round up the payment each month. So if you were paying $2349, you could round it up to $2400 or even $2500.

What are some other small ways you could pay down your loan faster?

What You Need to Know About Powers Of Attorney

  Imagine if you needed to sell your home, but your spouse is currently unable to sign the sales contract. This could be because he is physically and mentally unable to make decisions or sign legal documents or she is stationed outside the United States and unable to sign the documents.


What can you do?

You need a document called a “power of attorney”, whereby your spouse signs a legal document authorizing you to act on his/her behalf. The giver of the power of attorney is called the Principal.

The receiver is generally called the “attorney in fact”. The latter is given the right to act on behalf of the principal, for the purposes and functions spelled out in the legal document.

There are two types of Powers of Attorney:

General

Here, the principal authorizes the attorney in fact to take any and all actions as if the principal was taking them himself. This is also known as a Durable Power of Attorney.
Keep in mind that your own State law may have specific requirements in order to sell real property by way of a Power of Attorney. Some states will not permit real estate to be conveyed by a General power of attorney.

Specific

And here, the principal gives specific information and instructions to the attorney in fact. For example, sell my house located at 123 ABC Street; or write a $1,000 check to my insurance company from my bank account. The specific instructions are contained in the legal document, and the attorney in fact has no authority to exceed those instructions.

If you plan to sell your house, and find yourself in the situation where one party in title will not be available to sign contracts, deeds or other legal documents pertaining to the sale, it is best to have your attorney draw up a Power of Attorney that meets your needs, as well as the legal requirements in the State where your property is located.

The principal may want to put a time limitation on the Power — for example one or two months. However, with a durable power of attorney, the principal normally does not place any such limitations. The purpose of a durable Power is to assure that in the event the Principal becomes incapacitated, his attorney in fact will be able to step in without having to go to Court.

Let’s go back to our example. If your spouse knows in advance that he/she will be out of the country when you want to sell your house, have the Power of Attorney executed before the trip starts — and give a long lead time before the Power expires.

However, if you do not have a Power of Attorney and your spouse suddenly has a stroke — or is otherwise unable to comprehend and sign legal documents, then you will have to go to your local Court and seek permission to become the Conservator of the Estate of your spouse. This is a relatively easy (but potentially time consuming and expensive) process. The Courts, however, want to make absolutely sure that you are sincere in your efforts to represent your spouse and that your spouse is, in fact, not able to sign any legal documents. There is a lot of fraud involved, such as situations where children try to use the conservatorship route to take away property from their parents; accordingly, the Court will also look carefully at all of the facts, and if possible, will even interview the person to whom the conservator will be appointed. I once attended an interview where the Judge went to the hospital to make sure that no one was taking advantage of the sick person.

Preventive law is the key; consider obtaining a durable power of attorney now, while you both are in good health. Each spouse should sign a separate document, making the other spouse the attorney in fact. However, an alternative attorney in fact should also be designated, just in case both of you become incapacitated at the same time.

Your local attorney should be consulted to make sure you are using the proper forms and that you fully understand the consequences of your actions. A Power of Attorney gives someone else the right to sell your house, and you want to make sure that you are not giving away the store.

Written by Benny L. Kass

Market Commentary for the Week Celebrating Martin Luther King

 

This week brings us the release of only four pieces of monthly economic data for the markets to digest, with one of them considered to be highly important for mortgage rates. It is a shortened trading week with the stock and bond markets closed yesterday in observance of the Martin Luther King Jr. holiday. The financial and mortgage markets today for regular trading hours.

The first data of the week is December’s Consumer Price Index (CPI) at 8:30 AM tomorrow. This is one of the more important monthly reports for the bond market each month since it measures inflationary pressures at the consumer level of the economy. As with last week’s Producer Price Index (PPI), there are two readings in the release. The overall index is expected to remain unchanged from November’s reading while the core data rose 0.2%. Weaker than expected readings would be favorable news and should lead to bond strength and lower mortgage rates Wednesday morning.

December’s Housing Starts will also be posted at 8:30 AM tomorrow. It helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don’t see it causing much movement in mortgage rates Wednesday but does carry the potential to affect trading and rates if it shows a significant surprise. Analysts are expecting to see an increase in new home starts between November and December.

The remaining two monthly reports are scheduled for release at 10:00 AM ET Friday. One is December’s Existing Home Sales from the National Association of Realtors. This data will give us a measurement of housing sector strength and mortgage demand by tracking home resales in the U.S. It is expected to show a rise in sales from November’s level, meaning the housing sector strengthened last month. Ideally, bond traders would like to see a decline in sales that would point toward housing sector weakness because a weakening housing sector makes broader economic growth more difficult. However, as long we don’t see a significant surprise in its results, it shouldn’t have a noticeable impact on Friday’s mortgage rates.

December’s Leading Economic Indicators (LEI) is the final report of the week. It will be posted at 10:00 AM ET Friday also. The Conference Board, who is a New York-based business research group compiles the data and releases this report. It attempts to predict economic activity over the next several months, but since it is posted by a non-governmental agency, it is not considered to be of high importance to the financial and mortgage markets. Friday’s release is expected to show a 0.1% increase, meaning the indicators are predicting a slight increase in economic activity this spring. As long as we don’t see a much stronger than predicted increase, I don’t think this data will have much of an influence on mortgage pricing either.

Overall, despite a light week in terms of the number of economic reports scheduled, we still may see a very active week in the markets and mortgage pricing. In addition to our data there are also some key pieces of foreign economic data being released that can be highly influential and the volatility in our stocks markets will also play into this week’s bond trading and mortgage rates. Accordingly, there is a strong possibility of seeing intraday revisions to mortgage rates more than one day.
Therefore, please maintain contact with your mortgage professional and proceed cautiously if still floating an interest rate and closing in the near future.

New Year, New Credit Score

 

The New Year is a great time to get a fresh start on your credit by checking your credit report and score. If you’re planning on purchasing a house soon, remember that it can sometimes take up to 90 days for disputes to work through on your credit report, so the sooner you start, the better. Also, you can set up some good habits that will help build up your credit rating and ensure that it will stay at the best levels.

1. Get Your Credit Report

You’re entitled to get your personal credit report once a year from each reporting agency. This doesn’t include the score.

When you see a site offering a free credit score, keep in mind that it’s not going to be the same credit score pulled by lenders. What you are getting is an estimate based upon your credit report, and not a true evaluation. San Jose based FICO is the first U.S. credit scoring company, and it is their score that tends to be the gold standard. Each credit reporting agency uses FICO differently which is why your score is different if you had pulled it separately from each bureau.

There are many sites out there that allow you to pull your credit report and score from one or all three of the credit reporting bureaus.  You can get your free report Annual Credit Report.  Now, this won’t give you a score unless you pay for it.  But you can at least look for mistakes which do happen. If you start there, it will send you to the three main sites where you can fill in your personal information and get your record:

1. Equifax
2. Experian
3. Transunion

Often, sites try to get you to sign up for a monitoring service, and they have a free trial period. If you cancel before the end, you will get your score for free.

Some credit card companies like Discovercard and Citibank are offering your credit score. They don’t say which bureau it’s pulling from, but it can give you a ballpark. They also offer recommendations to increase your score.

2. Review Your Credit Report

Check your personal information including name, address, phone number, birth date, and Social Security number to make sure everything is accurate. Information regarding lawsuits, judgments, liens, late child support, or other late payments should be stricken from your credit report after 7 years and bankruptcies after 10 years. Credit inquiries from companies to determine eligibility for credit must be removed after 2 years.

Then mark anything that looks suspicious including credit card accounts that you closed but still appear as open on the report; accounts that you never opened; activity that you were not involved in; and account histories that show late payments when you know you paid on time.

So you’ve found errors. Now what do you do?

The FTC has a full page on how to dispute including a sample dispute letter. In a nutshell, you need to write out a description of the errors and inaccuracies in detail. Explain why it’s an error, and include a copy of the report where you’ve circled the issue. More detail is better. If you have supporting documentation, include a copy of that as well.

Then send the letter certified mail with return receipt. You want proof that you sent it in case there’s a claim you never notified them. By law, the credit bureau must investigate and contact you within 30 days of receipt.

In the past, there were ways to dispute online, but this wasn’t as good because it wasn’t possible to add in the supporting documentation. Also, it wouldn’t necessarily clean up the report. The agencies would reduce your issue to a two-digit code and provide only that code on to the requester and not what the dispute was about or who was correct.

The good news is as of 2014, you can upload supporting documentation such as a canceled check, a note marked “paid” when submitting your dispute online, and the credit reporting agency must provide all relevant information, including the dispute itself and supporting documents, to the furnisher.

You can mail in your dispute if you prefer the paper trail.

Also, if there are errors for a specific account, send a copy of the dispute to that account also via certified mail with return receipt. Give the company a chance to fix it on their own.

If the information is found to be in error, then it must be removed from your report. You have the right to ask that a corrected version of the credit report be sent to any company that has requested your credit report in the past 6 months. The credit bureau must also send you a free copy of the corrected version.

Additionally, under the Fair Credit Reporting Act, if the information found to be in error on your credit report is not removed and the court finds the violation intentional, you are entitled to actual and punitive damages, as well as court costs and attorney’s fees.

3. Improve Your Score

• Set up payment reminders so you never have a late payment again.  Do remember that a lot of credit card companies want the payment a few days before the due date to have time to process it.  It’s not fair since they say it’s due on a certain date, but it’s best be a few days early.
• Set up automatic payments using online banking where you can.
• Reduce the amount of debt you  owe. The percentage of debt to credit limit matters a lot.
• Check your credit report annually.  You can get your free report here.  Now, this won’t give you a score unless you pay for it.  But you can at least look for mistakes which do happen.
• Get your credit report 3-6 months before applying for a major loan.
• Be patient.  It can take 30-60 days for information to be updated on a credit report after you’ve made changes (like paying off a student loan, or had disputed information resolved)

8 Surprising Things That Impact Your Credit

And what would a post be without some trivia.  This is from Credit.com blog:

1. Renting a car
2. Applying for credit (even when you aren’t rejected)
3. Disputing an account
4. Having credit cards, but no loans
5. Just a single late payment
6. Closing an account
7. Divorce
8. Late library books

What Kinds of Mortgages Should I Know About?

Once you are under contract for the purchase of your new home, you will need to obtain a mortgage loan, assuming that you do not have all of the cash in your bank account.

There are many different loans on the market — and many different loan programs from which to choose. You should contact at least three different lenders, and ask them to give you a list of the loans which they can offer you. Take careful notes, and remember one important thing: do not give any lender any money until you are absolutely certain that this is the lender – and this is the loan – you want to obtain.

Under the new mortgage lender rules issued by the Consumer Financial Protection Bureau CFPB), it is actually very easy to shop and compare.
The three basic types of loan programs are as follows:

Conventional Loans

This type of loan in generally available from a bank, a mortgage broker, or a credit union. Within the category of conventional loans, there are various options available, such as a fixed 30 year loan, or an adjustable rate loan (called an ARM).

ARMs adjust on a periodic basis, although in most cases they will run for a period of thirty (30) years. Generally speaking, the shorter the term of the adjustment (such as a one year ARM) the lower the initial interest rate will be. However, when the adjustment period comes around, the interest rate for the next adjustment will either go up or down, depending on the economy at the time of the adjustment. When interest rates are falling, an ARM seems like a good deal. However, when interest rates are rising (as it appears they will be increasing as early as the end of this year), the consumer who obtains a one-year ARM is almost guaranteed to see the interest rate hike as high as 2 percentage points at the end of the first year.

This is not a complex issue, and all lenders are now required to provide you with a written explanation of the way their particular ARM works. Read it carefully and seek assistance from your financial and legal advisers if you have any questions

VA Loans

This type of loan is generally available from mortgage brokers, It is called a VA loan, since only military veterans can obtain such loans. They are guaranteed by the Veterans Administration. There are certain conditions which you must meet if you want a VA loan, and you should make sure that your potential lender provides you with all the details, up front.

FHA loans

This loan is insured by the Federal Housing Administration. FHA will guarantee the lender against a default by the borrower, but the borrower will have to pay an insurance premium for this coverage.
Once again, there are conditions which must be met before such loans can be obtained, and you should discuss all these terms with the potential lender.

It is not possible in a short article to fully discuss all the various mortgage loans on the market. Furthermore, creative lenders are always coming up with new programs in an effort to be competitive. However, not all these loans are in your best interest.

You should shop around, and don’t accept the first loan that is offered. While the real estate agent and often the seller may give you loan information – and the name of potential lenders – only you can make the final decision as to what is best for you. After all, remember that the life of the loan may be as long as 30 years – and that’s a long time to be stuck with an uncomfortable loan.

For more information, go to consumerfinance.gov, and search “Know before you Owe”.

Written by Benny L. Kass

Market Commentary for the Week of January 11th

 

This week has five economic reports that are relevant to the bond market and mortgage pricing. Some of the data is considered to be highly important and all of it is set for release the latter days. In addition to the data, there are two Treasury auctions that we need to watch. There is nothing of importance scheduled for release Monday or Tuesday, so look for stock movement to help drive bond trading early in the week. If stocks open the week by extending last week’s sell-off, we should see mortgage rates move lower.

There are Treasury auctions scheduled several days this week, but the two that are the most likely to affect mortgage rates will be held Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important of the two as it will give us a better indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward revisions to mortgage rates. Results will be posted at 1:00 PM ET each day, so any reaction will come during early afternoon trading.

The first economic report of the week will be the Federal Reserve’s Beige Book Wednesday at 2:00 PM ET. This report is named simply after the color of its cover and details economic conditions throughout the U.S. by Fed region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises, particularly regarding inflation, unemployment or future hiring. Any reaction to the report though will come during afternoon trading.

Friday has the remaining four reports set for release that has the potential to affect mortgage rates. The first is December’s Retail Sales data at 8:30 AM ET Friday. This Commerce Department report measures consumer spending by tracking sales at U.S. retail level establishments. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely. Rising consumer sales fuels expectations for broader economic growth that makes long-term bonds less attractive to investors. Current forecasts are calling for a 0.1% increase December’s sales. A decline in sales would be good news for bonds and mortgage rates because it would hint at weaker than thought economic growth.

The second report of the day is December’s Producer Price Index (PPI) at 8:30 AM ET. The PPI is important to the markets and mortgage rates because it measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.1% decline in the overall reading and a 0.1% increase in the more important core reading that excludes volatile food and energy prices. A larger than expected increase in the core reading could mean higher mortgage rates Friday since strengthening inflation is bad news for the bond market. It erodes the value of a bond’s future fixed interest payments, making them less attractive to investors. Accordingly, they are sold at a discount to offset the drop in value, which drives their yields higher. And since mortgage rates follow bond yields, rising inflation usually translates into higher interest rates for borrowers.

Next up is December’s Industrial Production report with a release time of 9:15 AM ET Friday. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength or weakness. Current forecasts are calling for a decline in production of 0.2% from November’s level. A weaker reading would be considered good news for bonds and could help lower mortgage rates as it would point towards a manufacturing sector that was softer than many had thought. However, the 8:30 AM reports are much more important to the markets than this data is and will likely have a heavier influence on mortgage rates.

The final report of the week is January’s preliminary reading to the University of Michigan’s Index of Consumer Sentiment. This index measures consumer willingness to spend and can usually have enough of an impact on the financial markets to slightly change mortgage rates. If consumers feel better about their own financial and employment situations, they are more apt to make a large purchase in the near future, fueling economic growth. Good news would be a reading weaker than December’s 92.6 that means consumers felt less confident this month and likely will avoid making a large purchase in the immediate future.

Overall, I see Friday as the key day of the week with Wednesday afternoon also worthy of plenty of attention. Monday could also bring more movement in rates if stocks are in selling mode again or decide to rebound from last week’s significant losses. On paper, we can expect to see the most movement in rates Friday, but the truth is that there is a decent chance of seeing noticeable changes in mortgage rates multiple days this week. Therefore, please maintain contact with your mortgage professional if still floating an interest rate.

What to buy in January 2016

Welcome to 2016! We hope you had a great holiday and eased back into the normal schedule quickly.

Today we’ll look at the best bargains in January and what to hold off on buying.

We’ll start off with a Freebie! January 19 is Martin Luther King, Jr. Day, and in celebration, all all national parks will feature free admission. While a large number of our parks are already free of charge, notable parks that are waiving their fees include several of the most-visited in the country, such as Yosemite, Yellowstone, the Grand Canyon, and Olympic National Park.  If you miss it, don’t worry! The next fee-free weekend comes in February for Presidents’ Day.

Our favorite resource at DealNews says now is the time to buy exercise equipment.
Last year, stores like Dick’s Sporting Goods, Target, Sears, and NordicTrack had after Christmas discounts of 25% to 50% on select sporting and fitness goods, including additional discounts on items that were already on clearance. Groupon even had sales of up to 90% off fitness deals. Sales included everything from bats and balls to free weights, as well as lots of fitness trackers.

This is also traditionally a good time to get deals on gym memberships. Look for gyms to at least lower or completely waive sign-up fees; if they don’t outright offer it, ask for it. The best deals will also give you a month or even two months for free. If you’re willing to pay for a full year upfront, the gym is more likely to be receptive to your requests for discounts.

Now is also the time to purchase winter sports equipment like skis and snowboards.  It’s also a great time to buy winter apparel. You can typically find discounts of 50% to 80% off on coats and winter accessories at stores like Eddie Bauer, REI, Macy’s, and JC Penney.

New furniture will be released in February, so many stores are putting last year’s inventory on sale to clear out room.  Look for good deals at Target, Sears, Home Depot and JC Penney’s. Now is also a good time to buy a new mattress. If you don’t buy this month, you will want to wait until May.

Look for Valentine’s Day presents. After Christmas sales will continue to provide some amazing sitewide discounts from Swarovski and Blue Nile, each cutting 50% to 60% off select items. January also sees numerous discounts on diamonds and pearls from retailers like Szul and WinPearl. And lots of those department store end-of-year sales will include jewelry and accessories.

Also, keep an eye out for Valentine’s Day flower sales from 1-800-Flowers and Teleflora to start just before the end of the month, as well as chocolate sales from Harry & David and Godiva. These sales will cut 20% to 25% sitewide, or will offer free shipping (or both).

Buy your tax software now even if you’re not ready to start your taxes. Last year, there were some good deals in February and March. Keep an eye out specifically for deals that discount state filing; many services offer free filing for federal tax returns, but state returns typically require an additional fee. So, if there’s a package in January that offers free filing for the state, it may be a better deal then a larger discount on the Federal software later on.

Buy a bin and go crazy buying up Christmas goods like lights, ornaments, wrapping paper and other Christmas themed items. If you’ve ever wanted to switch to a fake Christmas tree, now is the time to buy. Look for gift sets that can be taken apart and repackaged as different gifts.

You may find better discounts on seasonal decor and stocking stuffers at craft stores. Look in the back of the store for their clearance wall.

The Consumer Electronics Show will be happening in Las Vegas this month. Once the new 2016 models are announced, you should see a drop in electronics like laptops, cameras, audio equipment, tablets, televisions and more.

CNET is guessing that 4K TVs will become the norm at this year’s CES, which makes sense, as these high-end sets finally saw decent discounts and good value this past Black Friday. That means 1080p sets will become the new entry-level TVs, and 720p will be a bargain.

Otherwise, it’s best to stick with TVs in the 40″ to 55″ range during January. After the amazing deals of the holidays, TV discounts are quiet for several months. But these mid-sized sets have plateaued in discounts, so they’re usually available for a decent price. Look for deals that will drop 40″ sets to $250, or 55″ sets to $480.

There’s also guesses that wearables like the Apple Watch and fitness trackers will explode this year.

What fruits and vegetables should you be looking to buy in January? Thankfully there are quite a few. And don’t forget to pull out your slow cooker to make some stick-to-your-ribs stews and soups since it’s so cold out.

• Apples
• Beetroot
• Brussels sprouts
• Carrot
• Cauliflower
• Celeriac
• Celery
• Chicory
• Clementine
• Grapefruit
• Jerusalem artichoke
• Kale
• Kiwi fruit
• Leeks
• Lemons
• Oranges
• Parsnips
• Passion fruit
• Pears
• Pineapple
• Pomegranate
• Potatoes
• Rhubarb
• Satsumas
• Spinach
• Swede
• Tangerines
• Turnips

Did you save any money for specials in January or are you still paying off December’s purchases?

Important Clauses In Your Real Estate Contract

You have just found your dream house, and would like to buy it. What to do now?

When dealing with real estate matters, the law is clear: everything has to be in writing. Thus, you will need a sales contract, which will spell out all of the terms, conditions and special requirements you may (or will) need in order to conclude the transaction and go to closing (settlement) on the house.

If there is no real estate agent involved, your attorney should be able to assist you in preparing the contract offer. If there is a real estate agent, you can get a form sales contract from the agent. In fact, the agent should be able to assist you in preparing the document for presentation to the seller, although your attorney should review it before you sign.

Typically, the buyer makes a written offer to the seller. The seller has three alternatives:

1. The contract can be accepted;

2. The contract can be rejected in its entirety, or

3. The contract offer will be countered, with different terms.

It is rare that the seller will opt for alternatives one or two; in most cases, the potential buyer will receive a counter-offer. Then, the buyer has the same three alternatives.

There are certain things which must be included in any sales contract.

The property must be clearly identified, preferably by street address.

The contract must be contingent upon your obtaining financing. You should allow yourself some time — usually 30-45 days — in which to make application from a mortgage lender and get a written commitment that you have been approved for the loan. Under the new Consumer Financial Protection Bureau (CFPB), it will take more time, so you may want to give yourself up to 60 days in which to finalize the deal.

Unless you are an experienced contractor, it is advisable that you make the contract contingent on your obtaining a satisfactory home inspection. You should give yourself 5-7 days after the contract is signed to have the property inspected. If you are not satisfied for any reason after you receive a written report from the inspector, you should have the right to terminate the contract, and get back your earnest money deposit.

How much earnest money should you put up when you sign the sales contract? There is no magic formula and no law dictating a certain percentage of the purchase price. When you sign a contract, in order to make it a valid, legal document, the buyer should put up some money as a good faith earnest money deposit. These funds will be held by the real estate broker or the settlement attorney until settlement takes or until either the buyer is entitled to a return of the deposit (because the contingencies cannot be met) or the buyer is in breach of the contract, in which case the moneys would go to the seller.

Real estate agents and brokers usually ask that the buyer put up 10 percent of the purchase price as this earnest money deposit. However, buyers can put up more or less, so long as the seller agrees with the amount. Indeed, in many real estate contracts, the earnest money deposit consists only of a promissory note signed by the buyer, to be redeemed at the settlement itself.

Buyers should understand that although everything in real estate is negotiable, the earnest money should be large enough to convince the seller you are seriously interested in going forward with the purchase. I usually recommend this deposit be approximately five percent of the purchase price.

Finally, the contract should be contingent upon the buyer obtaining — no later than the date of settlement — a “termite” letter. This is a report from a licensed pest inspection company indicating that the house is free and clear of termites and other wood-boring infestation. Some contracts require the seller to obtain and pay for this report; other contracts put the burden on the purchaser. Either way, this is a critical report which all buyers should receive — and carefully review — before settlement is completed. Obviously, in a high-rise condo, such a termite letter would not be required.

Many of these contingencies are time-sensitive. You — as buyer — have so many days in which to get financing and so many days in which to complete the home inspection. Mark your calendar with these due dates, and make sure you act on these contingencies before the time has expired. Otherwise, it will be too late and you will be legally bound to comply with the terms of the contract, and proceed to settlement.

Written by Benny L. Kass

Market Commentary for the First Full Week of 2016

 

This week brings us the release of four monthly economic reports that are relevant to the bond market and mortgage rates with two of them considered to be extremely important. In addition to those reports, we also will get the minutes from the last FOMC meeting that have the potential to influence the bond market and quite possibly mortgage rates. All of these events come over just three days.

The Institute for Supply Management (ISM) will start the week’s activities by posting their manufacturing index for December late Monday morning. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improved. That indicates a softening manufacturing sector rather than growth. Analysts are currently expecting to see a 49.0 reading in this month’s release, meaning that sentiment strengthened slightly last month. November’s 48.6 reading was the first sub-50 reading in three years and raised concern about manufacturing activity. 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 Monday morning as it would point towards a stronger manufacturing sector.

Wednesday has three items that can affect rates. The first of them is the ADP Employment report before the markets open, 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 our calendar. Forecasts are calling for an increase of 190,000 new payrolls. Good news for mortgage rates would be a much smaller increase in payrolls.

The Commerce Department will post November’s Factory Orders data late Wednesday morning. This data gives us a fairly important measurement of manufacturing sector strength. It is similar to the Durable Goods Orders release that was posted just before Christmas, except this report includes orders for both durable and non-durable goods. Durable goods are items that are expected to last three or more years such as appliances, electronics and airplanes. Examples of non-durable goods are food and clothing. Analysts are expecting to see a decline of 0.2% in new orders. This report generally does not have a huge impact on the bond market or mortgage rates, but it can influence bond trading enough to create a minor change in rates if it shows a sizable variance from forecasts. The larger the decline, the better the news it is for mortgage pricing.

Also Wednesday is the release of the minutes from the last FOMC meeting. They will give market participants insight to the Fed’s thinking and concerns regarding the economy, inflation and monetary policy. It is one of those pieces of information that may cause a great deal of volatility in the markets or be a non-factor, depending on what the minutes show. They will be released at 2:00 PM ET, so they won’t affect the markets or mortgage rates until afternoon hours. The last FOMC meeting was followed by revised Fed forecasts and a press conference by Fed Chair Janet Yellen, so the possibility of seeing something unexpected is minimal. Still, market participants will be looking for any tidbits about the decision to raise key short-term interest rates and when the next move may be made.

The big news of the week will come at 8:30 AM Friday when the Labor Department will post December’s employment figures. The Employment report is arguably the single most important monthly release we see. It gives us the national unemployment rate, the number of jobs added or lost during the month and average hourly earnings, which is a key measure of wage inflation. Rising unemployment, a decline in payrolls and flat earnings would be ideal news for the bond market. Current forecasts call for no change in the unemployment rate of 5.0% while 200,000 new jobs added to the economy and an increase in earnings of 0.2%. If we see weaker than expected results, the bond market should rally and stocks should fall, improving mortgage rates noticeably Friday. However, stronger than expected readings will likely raise optimism about the economy, pushing stocks and mortgage rates sharply higher.

Overall, Friday is the key day of the week with the almighty Employment report being posted, but Monday and Wednesday both also have a decent chance of being pretty active. The least active day will likely end up being Tuesday. Please still keep an eye on the markets and maintain contact with your mortgage professional if still floating an interest rate as a couple of this week’s events have the potential to cause severe market volatility.