Getting Ready to Go Back to School

Some schools have already started, some start next week, and some start the week after that. Private schools often start after Labor Day. In today’s post, we’ll offer up some tips and tricks to make the transition from the lazy summer back to the structured school schedule as painless as possible.

Getting Your Kids Ready

Most kids are secretly happy to go back to school so they can see their friends. If your little one has concerns, remind them that it’s a brand new year, and they have a chance to be different than last year if they want to.
Also, if you act excited and talk up how much fun they’re going to have, it will become infectious. Start a countdown calendar. Get them involved in picking out a new backpack and lunch box. Have them plan ahead what they want to wear on the first day and for their school picture.
Discuss any major milestones. If your baby is going into middle school and they get lockers, make it seem like it’s a really important achievement.
And the usual advice is the best advice: Start having your kids go to bed 10 minutes earlier each night and wake up 10 minutes earlier so they’re back in synch with getting up and getting to school on time.
WebMD has 9 Recommendations for Helping Your Child Prepare for Back to School:

• Re-Establish School Routines
• Nurture Independence
• Create a Launch Pad
• Set Up a Time and Place for Homework
• After-School Plans
• Make a Sick-Day Game Plan
• Attend Orientations to Meet and Greet
• Talk to the Teachers
• Make it a Family Affair

Get Yourself Ready

Most schools have emergency card forms to fill out as well as immunization forms, etc. Some schools mail them out during the summer so you can fill them out. If not, expect to get a lot of forms on the first day. You can prepare by finding all of the information ahead of time. Also, double check with your usual emergency contacts to see if they’re still willing, and if they had any change of information as well.
Plan ahead what the lunches will be that first week, if you send in lunch. And make sure you have enough of everything for everyone.
Don’t buy too many school supplies. Just have enough to get them through a few days. Teachers sometimes change their lists year after year and you don’t want to be stuck with a 12 pack of crayons when the teacher wanted them to have a 10 pack of markers.

When The Day Arrives

If you can, make the morning special with a homemade breakfast to mark the occasion. If you’re lucky, maybe you can even get a picture of everyone. What can be really fun is taking a picture on the last day of school and comparing how much they have grown.
Sneak a note of encouragement into their lunch boxes. The tween girl may roll her eyes but she’ll appreciate the thought.
If you don’t have a special routine like going out to dinner and hear all about the day, look into creating one that meets your family needs and will be special to you.
Did you enjoy going back to school?

Market Commentary for the Week of August 12th

This week brings us the release of seven pieces of economic data that are relevant to the bond market and mortgage pricing. There is no relevant data scheduled for release Monday, so look for the stock markets to drive bond trading and mortgage rates. There is data scheduled for every other day with most of the reports coming the latter part of the week but the key releases are set for the middle days. This means that the week may start off slow, however, we are likely to see plenty of movement in mortgage rates as the week progresses.

July’s Retail Sales data early Tuesday morning is the first and one of the highly important reports scheduled this week. This data is very important to the financial and mortgage markets because it helps us measure consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, any data related to it can cause a fair amount of movement in the markets. A smaller than expected increase would indicate that consumers are spending less than previously thought, pointing towards slower economic growth. This is good news for the bond market and mortgage rates as it eases inflation concerns and makes long-term securities such as mortgage-related bonds more attractive to investors. Current forecasts are calling for an increase of 0.2% in retail-level sales. Ideally, the bond market would like to see a decline in sales although no change from June would be construed as favorable.

One of the week’s key inflation indexes will be Wednesday’s only relevant data. July’s Producer Price Index (PPI) will give us an indication of inflationary pressures at the producer level of the economy at 8:30 AM ET. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for a 0.3% rise in the overall reading and a 0.2% increase in the core data. A larger increase in the core data could push mortgage rates higher Wednesday morning. If it reveals weaker than expected readings, we may see bond prices rise and mortgage rates improve as a result.

The PPI will be followed by the even more important Consumer Price Index (CPI) early Thursday morning. The Consumer Price Index is one of the most important reports we see each month as it measures inflation at the consumer level of the economy. As with the PPI, there are also two readings in the report. Analysts were expecting to see a 0.2% increase in the overall index and a 0.2% rise in the core data reading. Declines in the readings, especially in the core data, should lead to lower mortgage rates since it would mean inflation is still not a threat to the economy. On the other hand, stronger than expected readings will likely lead to an increase in mortgage pricing Thursday

July’s Industrial Production is Thursday’s second report with a release time of 9:15 AM ET. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important to the markets and can influence mortgage rates slightly. Expectations are for a 0.4% increase in production, indicating some strength in the manufacturing sector. Good news for the bond market and mortgage rates would be a decline in output, signaling sector weakness. However, the CPI report will draw the most attention Thursday.

Friday has the remaining three pieces of data scheduled, but none are considered to be highly important to mortgage rates. July’s Housing Starts is the first at 8:30 AM ET, which will give us an indication of housing sector strength and future mortgage credit demand. It usually doesn’t cause much movement in mortgage rates unless it varies greatly from forecasts and is expected to show a fairly sizable increase in construction starts of new homes. The lower the number of starts, the better the news for the bond market, as it would indicate a weaker than expected housing sector.

Employee Productivity and Costs data for the second quarter will also be posted early Friday morning. It will give us an indication of employee output per hour. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage rates either, but it may influence rates slightly during morning trading. Analysts have predicted no change in productivity during the second quarter and a 0.3% decline in labor costs. A sizable increase in productivity reading and a larger than expected drop in costs could help improve bonds, contributing to lower mortgage rates Friday.

The final report of the week will come from the University of Michigan, who will release their Index of Consumer Sentiment for August at 9:55 AM Friday. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases, helping fuel economic growth. By theory, a drop in confidence should boost bond prices, but this data is considered moderately important and carries much less significance than some of the week’s other reports. Analysts are expecting to see a reading of 85.3, which would be a slight increase from July’s final reading of 85.1. The smaller the reading, the more concerned consumers are in their own financial situations and the better the news for mortgage rates.

Overall, I am expecting Tuesday or Thursday to be the most important days of the week. Tuesday’s Retail Sales report and Thursday’s CPI are the two single most influential reports scheduled over the next five days. Since Tuesday has the Retail Sales data and consumer level inflation is not expected to be an immediate threat, I am leaning towards it as the day that we will see the most movement in mortgage rates. I am expecting to see the least movement Monday, unless the stock markets stage a significant rally or sell-off. With so much going on this week, I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate.

Surviving the Family Road Trip

 

We’re down to the final weeks of summer, and many of you are going to want to sneak in a quick vacation before school starts back up.  Today’s post will help you stay sane.

1. Tips for Surviving a Family Roadtrip - Their number one tip is to ensure all electronics are fully charged. We’d also add purchasing car chargers, and get one per kid so there’s no fighting when both of their ipads or DS’s run out of juice at the same time. Another great suggestion is to keep kids busy by having some planned activities like a scavenger hunt for items like cows or cars with different state’s license plates.

6 Family Friendly Road Trip Ideas -Real Simple brought up something major that you don’t often think of: get your car serviced before you leave. Nothing will ruin a vacation faster than having the car break down. Or look into rentals to save the wear and tear on your vehicle. Secondly, involve everyone is the planning of the vacation, but don’t let anyone over-schedule the day. And if you have a bunch of driving, make sure you plan in a day of nothing to let everyone relax and recuperate. Sitting in the car for long hours at a time is exhausting.

Surviving Family Road Trips – PBS recommends finding parks or interesting sites every two to three hours to let kids run off some steam. They also recommend getting kids to look out the window rather then keeping their nose in their books or movies or game players. Encourage them to ask questions about how mountains got formed, or the history of a man-made lake.

Planning – and surviving – a family road trip – This was a delightful travel article in a newspaper on her family car trip to see major monuments including Yellowstone and the Grand Tetons. One major tip she had was checking out the hotels. Find ones that will be kid friendly. Also look into if you get breakfast included with your stay (which saves money). Kids will no doubt want a pool. Also, if you want to line up activities like zip-lining or horseback riding, look into Tripadvisor.com and Fodors.com can help you decide which outfitter to choose. Be sure to bring along confirmation numbers for both hotels and activities.

Remember, there’s still time for even a short three or four day weekend trip before school starts. It’s good to get away and recharge before life gets routine again. And if you don’t have kids, look into planning a trip when everyone is back in school. The rates should be less and there will definitely be fewer people.

Are you going to start planning next summer’s vacation yet?

What to Buy in August

 

Anything to do with going back to school is generally going to be a good bargain in August. The stores have a lot of stock up sales for clothes and school supplies. And it’s considered end of the summer season, so all summer time items should be at great prices.
We weren’t able to find any freebies for this month, so if you find one, please put it in the comments for everyone.

What’s a good buy

• Cars: It’s the year end close-out sales because the new models are coming in, and the dealers want to clear the lots.
• Office and School supplies: Because of students going back to school, places like Target and Office Depot are having fire-sales.
• Hotels: Third-party booking websites such as Hotels.com and Orbitz.com usually offer the best coupons and rates during August. Last year, Orbitz saw a 15% decrease in booking costs, and Hotels.com gave special deals up to 50% off in conjunction with other coupons.
• Wine: ’Tis the season! If your dream wedding includes a scene of country fields, book a wedding at a vineyard in August, because it is harvest time for some areas of the country.
• Storage Solutions: Again because of students going back to college. You can look for some good deals.
• Clothes: Thank you student sales! Actually, there are great sales on Fall clothes, and even better deals on Summer clothes as the merchants want to free up rack space. It’s also the last chance for swimwear.
• Grills and Patio Sets: Now that summer is “over” according to the stores, you can pick up some wonderful outdoor furniture to enjoy during the rest of the season.
• Camping Equipment: Like grills and patio sets, now is a great time to pick up stuff to play with the rest of the summer
• Laptops: We’ll say it again, let’s hear it for back to school sales! You’ll find some really good bundle deals for laptops right now.
• Luggage: By August most people have already finished their summer travels. They may be planning a fall getaway, or their holiday travels, but since that’s not for months, that makes now a great time to replace or add to your luggage collection.
• Seasonal Produce: The late summer harvest yields fruits such as apricots, blueberries, grapes, mangos, melons, nectarines, kiwi, peaches, plums, raspberries, strawberries, and watermelon, all of which will be ripe and cheap. Readily available vegetables include corn, cucumbers, bell peppers, beets, eggplant, green beans, green onions, lettuce, okra, radishes, summer squash, and tomatoes.
• 55″ 3D HDTV’s:While July was the lowest price so far since November, the prices are still very low for this type of television.

What not to buy

1. Smartphones - New iphone models are usually announced in September or October. Here’s a guide for how to time buying a smartphone. The difficulty lies in different companies releasing at different times, and then different cell phone providers offering different deals. So, keep your eyes and ears open, and track the prices so you know what to expect.
2. Tablets – September is usually the date when Amazon releases the new Kindles, so hold off buying until the new model is out. Then you can pick up the older model for quite a bit less. Google introduced the second-generation Nexus 7 recently for $229, which is slightly more than the previous generation’s price point of $199. All eyes will then be on Amazon to see if the store does the same. If the new Fire is cheaper, and the slightly pricier Nexus tablet doesn’t sell like Google hopes, then we might see special promotions for the Nexus 7 that bundle the tablet with a media credit for music, videos, or books.
3. 32″ Televisions - f you’re going back to school and need a 32″ set for the dorm, wait until September to buy one. Current sets are priced higher than normal. Last September, stores reduced the prices to lower than Black Friday deals.

Eight Ways to Improve Your Home Appraisal

Whether you’re selling, refinancing, or looking for a home equity line of credit, you want to get an accurate home appraisal.

Unfortunately, not all home appraisers are created equal, and some even cut corners without looking at the important details.  And low appraisals are becoming more normal as a result of the housing crisis.

Here are eight things you can do to improve your home appraisal.

Make Sure Your Appraiser Knows Your Neighborhood

There are pockets and micro communities.  If you step off the curb, you’re in a different zone.  So make sure your appraiser knows that just because you’re in one district doesn’t mean you’re in the same neighborhood as the places 3 miles down the road.

Provide Your Own Comparables

If you provide the appraiser with three solid and well-priced comparable properties, you will save them time as well as ensure that they have appropriate comparables rather then having them randomly pick some from the neighborhood.

Know What Adds the Most Value

Kitchens and bathrooms get the most value.  However, wood floors, landscaping and enclosed garages also increase appraisals.

Document Your Fix Ups

You’d want to do this for tax and insurance purposes.  But if the records are a little haphazard, take some time and organize it into different file folders, and make them available for the appraiser.

Talk Up Your Town

Has your town gotten any award, or award winning restaurants, museums, parks, colleges, etc?  Make your community seem vibrant as it will increase the  perceived value of your home.

Distinguish Between Upstairs and Downstairs

If you’ve remodeled and completely finished a basement or an attic, you will need to point that out to the appraiser, as these are often not counted in the square footage, and therefore the final appraisal.

Clean Up

Clean up and declutter where you can.  Put flowers out.  Have cookies baking.  Make your home seem clean, upscale, and organized.

Let the Appraiser Alone to Do Their Job

If you follow the appraiser around, they’ll be more focused on you then on the home, so let them know where you are if they have any questions.

Resources

Eight Ways to Improve Your Home Appraisal on Yahoo! Finance
Tips on Improving Home Value for Appraisal on SF Gate
Home Appraisal: What to Expect & How to Prepare on HomeCheck

What to Do When Your Identity Is Stolen

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

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

So What Do I Do?

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

Unfortunately, it doesn’t always end there.  Some companies will open up a line of credit, or will sign someone up for a cell phone without checking the report.  They’ll just note if there is a credit score. 

Additionally, the thief might use your information to obtain health care benefits that could come back to you if the bills are unpaid.  So even when you think you have things cleaned up, something new could show up even with a locked credit report.  Therefore, you need to check regularly.
Here are some resources with checklists and links:

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

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

Can I Prevent This From Happening?

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

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

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

Are We Losing the Mortgage Interest Deduction?

There’s a lot of talk in the news about the financial cliff, and the expectation of both sides giving in. One item that some want to be on the table is the mortgage interest deduction. Actually, this has been brought up for quite a number of years and was brought up in 2010 as well.

What is the mortgage interest deduction

When filing out your taxes, you can deduct the amount you paid for your mortgage interest against your gross income. It’s especially loved in areas where the cost of housing is high. It’s also a way that home investors can provide savings back to their renters.

How much would I lose?

The San Jose Mercury News published an article with some charts using the 2010 rates and income levels. For Santa Clara County, the median price was $610,500, and the first full year’s interest is $16,945. This would yield a tax savings of $5,084 which could be a nice vacation.

If you’re a renter, your rent may go up if your landlord loses their deduction. These costs usually get passed along down the line.

Is there anything good about the phaseout?

Some believe that a tax deduction is inefficient and a tax credit would be a better way to help more people. This blog post at HSH.com explains in greater detail about how the mortgage interest deduction was created, and their opinion as to how it’s not helping those it should.

SFGate also explains the history and the effectiveness of the mortgage interest deduction.  Their conclusion is that it may change form, but it will always be a part of our tax structure.

So, if you’re concerned, find a professional tax advisor and review your current mortgage and taxes, then you will know a firmer number.  Contact your representatives and let them know how it will impact you.

Do you think the federal government will phase out mortgage interest deductions?