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For the fifth time in a year, rate shoppers learned an important lesson this week: When mortgage rates plummet unexpectedly, they often recover just as fast.

Wednesday, the Federal Reserve’s newest $750 billion mortgage market pledge helped to push conforming mortgage rates near their lowest levels since WWII.

24 hours later, however, those rates were expired.

After considering the long-term implications of the Federal Reserve — literally — printing new money to service the recession, markets grew fearful that the Fed’s interventions will eventually lead to inflation.  Inflation, of course, is the enemy of mortgage rates.

So, if you’re looking for the explanation of why rates rose as suddenly Thursday as they fell the day prior, this is it.  And, in hindsight, rate shoppers might have seen it coming, if only because we’ve seen the exact pattern 4 other times:

1. After the Fed’s “surprise” rate cut in January 2008
2. After the Fannie Mae and Freddie Mac takeovers in September 2008
3. After the Fed announced its first $500 in support in November 2008
4. After the Fed zeroed out the Fed Funds Rate in December 2008

Sharp drops in mortgage rate, it seems, are followed by immediate bounce-backs.

Unfortunately, not every would-be refinancing homeowner saw the increase coming.  People that locked Wednesday captured the lowest rates in 6 decades.  Everyone else wishes they had.

From day-to-day, we don’t know if mortgage rates will rise or fall. Nobody knows that.  But, we do know that mortgage rates tend to follow patterns and we’ve seen the above pattern 5 times now.

When mortgage rates plunge like they did Wednesday, they rarely low for long. When you find a rate you like, get in and get locked as soon as possible. By tomorrow, it’s likely to be gone.

In a market like ours, where prices are stable with little decline, even in this most difficult of economies, the low interest rate still is the buyer’s best friend. And if you buy for solid reasons, even the rate shifts like these don;t impact you really poorly. As always, It remains better to buy real estate and wait than it is to wait and buy real estate!

If you’re not rotating your mattress every 3 months, you may be shortening its lifespan.  Constant nightly pressure can “wear out” the areas on which you sleep, creating in-bed divots and reducing your sleeping comfort.

The ExpertVillage.com video above — “How To Flip a Mattress” — is pretty self-explanatory.  But there’s a few other steps you can take to protect your bed and your health.

First, consider the use of a mattress cover.  A mattress cover protects against spills and stains and can stop liquids from dripping inside of the mattress itself. Mattress covers are marked down 43% at Amazon.com right now and can be purchased for cheap at Bed Bath and Beyond, too. 

Second, each time you change your sheets, remember to vacuum the mattress surface.  A thorough cleaning will reduce the number of allergens and mites living on your bed, promoting better health hygiene.

And lastly, remember to occasionally apply an upholstery-grade cleaner to your mattress for stubborn stains or soilage.  Using this particular type of cleaner is important because the product is meant to be near human skin.  This is different from, say, carpet cleaner.

A good mattress can be expensive.  Extending its usable life is not.

Food-borne illness is three times more likely to occur at home than in a commercial kitchen.  It’s a fact that surprises a lot of people and one that experts attribute to a myriad of blunders including the improper storage of food, lack of cleanliness and unsafe food handling.

As it turns out, keeping your fridge clean and orderly is just a start.

Here’s a few other helpful tips:

• Produce for salads often grows low to the ground and, therefore, is exposed to fertilizers.  Wash thoroughly before placing in the produce bin.
• Never put washed produce back into its original, contaminated container.
• Even if fruit comes with a “peel”, wash it. Whatever’s on the outside transfers to the inside when you cut it.
• Keep milk and cold cuts off the refrigerator door — it’s the warmest part of the interior.
• Adhere to expiration and “use by” dates.
• If you see mold on bread, throw out the entire loaf.

Lastly, remember to wash your hands before handling your food.  You don’t have to be playing in dirt to get your hands dirty.  The simple act of typing on a keyboard is enough to spread germs.

Clean food + dirty hands = dirty food.

Source
I love you … Let’s clean out the fridge
Kristen Browning-Blas
Denver Post, February 11, 2009
https://www.denverpost.com/ci_11666028

Image by zoomar via Flickr

If you are in the process of buying a house right now, you may be wondering where the deals are. Many properties still seem to be listed higher than you would expect, given all the national news about the real estate market. Some buyers have even decided to stay out of the market, hoping that asking prices will drop further. The problem with waiting, of course, is you might miss the bottom – only to realize too late that prices have gone back up again. Your other risk in waiting is that interest rates, still at historical lows, may also go back up again. I’d like to offer a more pro-active suggestion, which is based on our local market statistics.

What I have found is that the deals are hiding in the sold properties. In other words, properties are not necessarily listed at deal prices, but they are selling at deal prices. On average, in the $50k-$100k price range, properties are selling at around 85% of asking price. Statistics show us averages, but keep in mind that the average represents two ends of the spectrum. On the one end are sellers that offer a great property at a competitive price; their houses are selling quickly for close to asking price. But on the other end are properties that are selling below asking price – probably less than 85% of asking price.

So, let’s say you can afford a mortgage on a property for $85,000. If I were your real estate agent, I would recommend that you look at properties priced at least up to $100,000. Why? Because if you made an offer of $85k on a property listed at $100k, that is 85% of asking price – which is the average a seller can expect. Now, I am not saying that you can get any $100k property for $85k. As I mentioned, some properties out there are already priced competitively and they are probably going to sell for close to that price. But you never know how much a seller is willing to negotiate until you submit an offer.

Having said all of this, I should mention that properties listed in the range of $150k up to $300k are seeing an average sale price around 91% to 92% of asking price. While from a percentage standpoint, the discount is not as significant as properties listed in the under $100k range, from a savings standpoint, the average buyer is saving around $14,000 to $24,000 off of asking price – so it’s still worth a look!

There’s a mixed message in February’s Housing Starts data and it may be a good sign for home sellers in the near-term.

As reported by the government, new home construction rose by 22 percent last month.  The press is running with the headline number, calling it evidence of a market bottom.

A more thorough inspection, however, reveals a different story.

The 22 percent figure applies to all homes built — including apartment building units.  Isolating residential units, February’s housing starts rose by just 1 percent.  Furthermore, the data’s margin of error is 11 percent.

Statistically, we can’t know if residential housing starts really rose last month, or if it fell instead.  What we do know, though, is that the number of building permit requests rose.

Permits to build single-family homes were up 11 percent in February nationwide.

To home sellers, the rise in building permits may confirm that a housing market turnaround is already underway.  Builders wouldn’t be putting new inventory on the market, after all, without being sure of their ability to sell it 9 months hence, and construction lenders would not be giving them the money to do so.

The headline figure of 22 percent is attractive, but it’s not completely honest.  It’s not the number of housing starts that matter so much right now as the number of housing permits.   A rise in permits signals that homebuilders — a group that’s lost a lot of money in the last 2 years — think the worst of housing is already over. If the Fed’s actions at their meetings this week echo it, it may well confirm that theory.

(Image courtesy: The Wall Street Journal Online)

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.

According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008.  This is a fact and it was widely reported by the press.

However, as the heat map plainly shows, in stripping out just 35 of the nation’s 3,232 counties, we can decrease the number of foreclosures nationally by half.

In other words, yes, 1 in 8 U.S. homes face mortgage trouble.  In Pennsylvania, the ratio is much, much lower.  As you can see from the “heat map” our state is pale blue, as is most of New Jersey, indicating less than 2% foreclosures rather than the 12.5% reported. Real estate is a local phenomenon.  National statistics rarely apply, and in our market, stability is much greater than in others.

Back in the “Good Old Days” the basis of lending was often the knowledge the local banker had of you and your family and your work history.

As the mortgage business grew , there needed to be a more universal method of determining who to give loans to. Today the basis of most mortgage lending is credit scoring. In general, the higher a person’s credit score, the lower his offered mortgage interest rate.

Despite the many credit scoring models in use today, however, just 3 are relevant to American homeowners:

• The Equifax BEACON^® score
• The Experian Fair Isaac Risk Model
• The TransUnion EMPIRICA^®

Generically, these scoring models generate what are commonly known as “FICO” scores.

FICO scores are measurements of probability. The higher a person’s credit score, by definition, the less likely a person is to default on his home loan. This is one reason why credit scoring has added importance lately — mortgage lenders are very careful about what they’re lending and to whom.

Notably, minimum FICO thresholds have been added to all types of mortgage loans.

FICO scoring has 5 main components as listed above. Payment history and credit capacity are two of the largest pieces, but a myriad of other factors contribute to a credit score, too. For example, the longer your reported history of managing credit, the more favorably your credit score will respond.

The myFICO.com website does a terrific job with credit education, explaining in plain language the ins-and-out of credit scoring and ways to boost your score. It also makes a free, 20-page PDF available for download.

Whether you’re a homeowner or lifetime renter — consider it required reading. You may be surprised what you can do to make your score better!

“Most of the biggest real estate fortunes were not made in good times, but in bad times like this” Barbara Corcoran reminds us in this talk with NBC.

It’s important perspective for Americans wondering how to invest in foreclosed properties without losing their cash or their credit rating.

In the 4-minute interview, Corcoran quips on the basics and the essentials of foreclosure investing,

• “Everyone who loses their shirt loses it somewhere else.”
• “Every big shark started small.”
• “The house on the corner sets the tone for the block.”

She also lends some personal perspective to rent rolls, the cost of losing a tenant, and finding a good business partner.

Banks are anxious to sell their foreclosed homes and that makes this an ideal time for shrewd real estate investors.  If you’re new to the game, watch the video and take good notes. For more infomration on bank owned properties, visit our company web site at www.c21ag.com where you can search for foreclosed properties. Century 21 Advantage Gold has been representing lenders in the sale of their properties for 21 years, and our agents can answer many of the questions you have that may not be answered here.

Changing your air filters regularly keeps your household energy costs down and extends the life of your HVAC unit(s).  It’s important, however, to use air filters that actually work. 

Walk into any hardware store and you’ll see a host of filters at various price points, starting at 99 cents.  Before you reach for the cheapest products, though, watch the 1-minute video above.

A mesh filter isn’t going to stop most airborne particles.

Because buying the recommended pleated air filters can be expensive, consider purchasing in bulk from a store like Home Depot, or from Amazon.  Air filters don’t “go bad”, you can store your discounted filters until they’re ready for use.

Experts recommend changing air filters quarterly at minimum.  If your home has shedding pets or is dust-prone, consider changing them monthly.