C21AGVoices

With home heating costs expected to increase 20 percent over last year, The Today Show offers 10 tips to reduce home heating costs this winter.

The advice ranges from the well-known to the obscure, but every little bit is meant to put money back in homeowners’ pockets:

• Replace your air filter monthly
• Drain a quart of water from your water heater
• Use a thermostat timer for sleeping hours

If you prefer text to video, the 4-minute video is summarized at the NBC Web site.

Given the stock market’s recent performance, it’s not surprising that gasoline’s falling prices are garnering very little attention. That doesn’t make it any less relevant, however.

Since peaking in July, gas prices are off by 20 percent.

Falling gas prices are an important positive for the U.S. economy because less money spent at the pump means that more money is saved per household for everyday items including food and other staples.

In addition, consumer spending makes up two-thirds of the economy. 

Therefore, falling gas prices may lessen the impact of a forecasted recession.  Because Americans are notoriously poor savers, the extra cash-on-hand is likely to get spent which will, in turn, push the economy forward through the upcoming holiday shopping season.

So, just as inflation can bad for mortgage rates, so can recession.  And while recession won’t always cause mortgage rates to rise, right now, it’s one of the factors driving rates higher.  Falling gas prices may help keep that scenario at bay.

The Federal Reserve made an “emergency rate cut” last week, dropping the Fed Funds Rate by one half-percent to 1.500 percent.

The move is meant to stimulate the U.S. economy.

When the Federal Reserve changes the Fed Funds Rate, it often takes 9 months for the changes to work their way through the economy. 

On a broad scale, therefore, we won’t know if the cut truly “worked” until Summer 2009.

But, as it relates to Americans in general, the rate cut spurred two immediate changes.

First, because Prime Rate is directly tied to the Fed Funds Rate, Prime Rate fell by 0.500 percent, too.  That means that interest rates on credit card debt and home equity lines of credit are now lower, reducing monthly interest costs for the majority of American households.

The second change is that mortgage rates were rising at the same time.

The Fed’s actions today sparked optimism in some corners of Wall Street and money is now flowing into the stock market at the expense of bonds.   Because mortgage rates move in the opposite direction from bond demand, mortgage rates are higher this morning. 

As always, mortgage markets and mortgage rates remain on edge.  Therefore, rates are subject to change.  And quickly.  If you see a rate and payment you like, be ready to commit to it because it likely won’t last long.

(Image courtesy: USA Today)

Photo courtesy of Creativecommons.org

I’m from a smaller town in North Eastern PA that in the fall is abundant with haunted hayrides, harvest festivals, and some of the best foliage in the state. To get a little dose of home I did some research to see what Philadelphia had to offer this time of year. To my surprise Philly and the surrounding areas celebrate it’s country roots pretty similar to home.

Apple Fest-Saturday October 18, 2008 12:00pm-4:00pm

Apple Fest is located at Fox Chase Farm in North East Philadelphia. As you can guess the theme here is apples with cider pressing, apple bobbing, apple butter making. There will also be a corn maize, hayride, crafts and baked goods for sale. 

Eastern State Penitentiary Terror Behind the Walls-Now Until November 2

According to their website the tour takes you through an 11 acre prison with five different haunted houses lasting 45 minutes. Tours are available day and night until November 2nd. The reviews say this is one of the scariest haunted houses in the United States. The penitentiary hold family nights that are more appropriate for younger children.

The Great Pumpkin Carve-Thursday October 23, 2008 5:00pm-October 25, 2008 9:00pm

Brandywine Valley artist take on a patch of large pumpkin at this annual pumpkin festival turning them into carved works of art. Held behind the Chads Ford Historical Society’s Barn celebrate the tradition of pumpkin carving with live music, food and hayrides.

Reading Terminal Market Harvest Festival-Saturday October 18, 2008 10:00am-4:00pm

The festival is all about celebrating the harvest foods of Pennsylvania. Filbert Street  will be closed to vehicle traffic and transformed into an urban farm with hay bales and corn stalks. Kids and adults alike will have the chance to climb on an authentic farm tractor for a hay ride around the Market, take a walk through a pumpkin patch, and enjoy hot apple cider, locally grown seasonal fruits and vegetables, cheeses, and more.

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In this 4-minute video, turf grass specialist Carmen Magro demonstrates the proper way to prepare your lawn for Spring. 

His tips include:

• How to seed “worn down” areas of a lawn
  
• How to control thatch to promote a healthy lawn
  
• How to fertilize a lawn without “overdoing it”

The Fall season is one of the most important times of the year to feed your lawn.   With the advice from the video, you’ll be sure to do it right.

As household budgets get pinched and credit markets tighten, a growing number of Americans are making “hardship withdrawals” from their 401(k) plans.

One major fund group cites a 15 percent increase in activity from this time last year for various reasons including staving off foreclosure and medical emergency.

However, 401(k) loans should only be made with careful consideration.

On the positive side, 401(k) loans don’t require a credit check.  This is helpful feature for people deep in debt, and who may have missed a payment or two to their creditors.  With no credit score requirement, a poor payment history won’t disqualify a plan participant.

In addition, most 401(k) loans can be arranged with just a phone call and a small stack of paperwork.  There’s no “qualification process” like applying for a credit card or a mortgage.  Money can be available, therefore, in as little as a day.

But there are negatives to 401(k) loans and the biggest one relates to taxation.

If you take a 401(k) loan and can’t repay according to its terms, the IRS taxes the loan as ordinary income and slaps on a 10 percent penalty if you’re under 59 1/2.  That can be very costly for a lot of people.

But, even if you do repay the loan on time, it’s still gets expensive.  This is because 401(k) loan repayments are subject to double-taxation.

The first taxation occurs when the loan is repaid because the payback is made with post-tax paycheck dollars.  A person in the 25% tax bracket, for example, would need a $1,333 paycheck to repay a $1,000 loan — the missing $333 goes to taxes.

And the second taxation occurs at retirement when the funds are finally withdrawn.  The IRS taxes that money as ordinary income.

Now, this isn’t to say that taking a loan against your 401(k) is bad, it just may not be the best possible route for a person in trouble.  Especially because of the costs.  If you’re planning to withdraw from your 401(k) for hardship, be sure to talk with a qualified financial professional first.

If you’d like a referral to a trusted professional, call or email me anytime.

Monday, the Dow Jones Industrial Average closed below the psychologically-important 10,000 level for the first time since 2004.

Despite the milestone-marker breach, however, there was a large group of Americans with reason to cheer.  As stocks sold off, mortgage markets rallied to the benefit of home buyers everywhere.

Conforming mortgages rates improved yesterday.

Most interesting here is that rates improved for the same reason that the stock market fell.  Because of lingering concerns about the worlds’ economies, investors lost their collective appetite for risk Monday.  In response, they sold their stock positions and parked the proceeds in the “safe haven” of U.S. government-backed debt.

The extra demand for safe investments pushed up the prices on mortgage bond which, in turn, pushed down mortgage bond rates.

Now, we can’t predict when the market’s risk appetite will return, but when it does, expect money to flow into stocks just as quickly as it left.

All year long, with respect to stock markets, it’s been either “everybody in” or “everybody out” and, for now, it’s everybody out. This is why mortgage rates fell Monday.

But, when the momentum shifts — and it will shift — mortgage rate shoppers would do well to be prepared.  Be ready to lock that mortgage rate because as soon as the stock market reverses course, mortgage rates will head higher.

If stocks recover as quickly as they tanked, expect mortgage rates to spike badly.

(Image courtesy: USA Today)

In an effort to provide “the most market support possible”, Fannie Mae is cutting one of its mandatory loan fees by 0.250 percent, effective immediately.

Fannie Mae introduced the Adverse Market Delivery Charge in December 2007 to offset foreclosure and delinquency losses.  The initial fee was a quarter-percent of the amount borrowed. 

Then, as market conditions worsened, Fannie Mae doubled its across-the-board loan fee to 0.500 percent in August of this year.

As of today, the fee is back to its starting point.

Since the start of the 2008, Fannie Mae has made 21 separate changes to its mortgage guidelines.  Most have been detrimental to borrowers, increasing the difficulty, or the cost, of qualifying for a conforming home loan.

Today’s change is among the few that are beneficial.

With mortgage pricing edging higher because of the looming Congressional vote and Wall Street’s reaction to the weak jobs report, the good news is that price changes could have been worse. 

Fannie Mae’s Adverse Market Delivery Charge flip-flip is keeping rates in check — perfect timing for home buyers shopping for their new mortgage.

While home electronics advance, the basic extension cord has been slow to catch up.

This has created a size mismatch because today’s devices tend to carry large size plugs, but the standard 6-outlet power strip is only meant for “skinny” ones.

Pictured at right: the solution.

Matching form and function, the ezSpace UFO provides 6 outlets in a recessed, circular pattern, eliminating the need for multiple power strips in a home or workplace environment.

In additon, the UFO’s On/Off switch is located on its bottom instead of on top.  This makes it far less prone to accidental shut-offs than a traditional power strip device.

These features, plus its tiny 6.25″ footprint, have generated terrific press for the ezSpace UFO available for sale at Target, among other places.

The device retails for about $30.

Photo courtesy of Creativecommons.org

Whether your are moving, collecting, selling or rummaging Craigslist.org is the best place to find new and used goods on the net. Craigs is the online version of your newspaper’s classified section. You can find a job, a pet, furniture, a car, and even a date.

When I first moved to Philadelphia I needed a kitchen table set and some other small items. For $20 and short trip to Glenside I got a wooden table and four chairs, all thanks to Craig!  The best thing was, I didn’t have to log in to any account or bid on any items or pay any shipping fee, it was alot easier than E-bay! And if you are selling your items the site doesn’t charge you any fees, it’s absolutely free.

Can’t find what you are looking for locally? Search other cities across the country for your shopping needs, most sellers will give you a reasonable shipping estimate.  Other site features include the option to search buy price range and item images.

Not interested in shopping? The site also features discussion boards and a community events calendar.