July 29, 2011 8:57 pm
“The U.S. debt crisis is likely to cost home buyers at least $122 per month,” says Gibran Nicholas, chairman of the CMPS Institute, an organization that trains and certifies mortgage bankers and brokers. “Bonds issued by Fannie Mae and Freddie Mac will probably lose their AAA status if the US credit rating is downgraded." This means that mortgage rates will likely go up. The monthly payment on a $200,000 30-year mortgage would increase by a whopping $240 per month if mortgage rates go up slightly from 4.51% to 6.43% like they were just 3 short years ago. Even if interest rates only go up by 1% it would cost an extra $122 per month.
If you have an adjustable interest rate tied to LIBOR or US Treasuries, your mortgage rate will probably fluctuate a little over the next few months as banks, investors and money market funds figure out what to do with the temporary loss of a AAA credit rating for US Treasuries.
“Many investment funds are only allowed to invest in AAA rated investments," Nicholas says. "This means they will have to either (1) change their bylaws in order to keep their US Treasuries and mortgage bonds; or (2) sell their US Treasuries and mortgage backed securities. This will cause Treasury and mortgage bond yields to fluctuate considerably over the next few months, adding even more uncertainty to an already fragile mortgage and housing market.”
So how bad can this debt crisis get? Do you think it would be too risky to get a $150,000 mortgage if you were a homeowner making $150,000 per year? Most people would agree that you wouldn’t be over-extending yourself in that situation. In fact, your lender would probably consider you a very safe credit risk and be very eager to lend you the money.
“That’s exactly what the U.S. debt burden would be like if the debt ceiling was increased,” says Nicholas. “Our country generates around $15 trillion dollars per year in economic activity, and all we are asking for is a total ‘mortgage’ or debt burden of around $15 trillion. If this was such a high risk proposition, nobody would be loaning us money and we’d be paying much higher interest rates on our debt.”
Now, switch hats for a minute and go back to the homeowner making $150,000 per year. How would the scenario change if they suddenly were at risk of no longer generating $150,000 in annual income? What if their debt was simultaneously growing by about $15,000 per year (meaning they’d owe $165,000 next year, $170,000 the year after, etc.)?
“That’s what the current crisis is all about,” Nicholas says. “The U.S. debt burden is growing by about $1.5 trillion per year and our elected officials are jeopardizing even the $15 trillion in economic activity that we do have as a nation. That’s why the rating agencies are probably going to temporarily downgrade our credit rating. The bottom line is that we don’t have a ‘debt crisis’, we have a ‘credibility crisis.’ There will be some temporary negative consequences because of all this even if the debt ceiling is increased at the last minute.”
For more information, visit www.cmpsinstitute.org.
July 28, 2011 2:57 pm
Many Americans are using the hot summer months as an excuse to travel and break out some brand new styles. For those heading off on planes, trains or automobiles, check out the following suggestions to help stay comfortable and look stylish while en route to your end destination.
Look for a bag that has space for travel essentials: a water bottle, inner pockets for a cell phone and other gadgets, room for reading material, a sweater or wrap, and a few deep outer pockets to tuck boarding passes and other important travel documents. Air travelers should look for a bag about 11 inches tall, so it will sit upright under a standard airplane seat. A tote or structured bag is preferred for travel, so it won’t slouch and let the contents fall out.
Layers are always a good idea for traveling. A wrap or cardigan can ward off air from a chilly vent or act as a makeshift pillow. Sprayed lightly with a favorite scent, it can work as a discreet barrier against undesirable airplane odors. Cardigans purchased in a neutral color or coordinated with other items of clothing are among the most versatile clothing items a traveler can have in the wardrobe.
Easy-on, easy-off shoes are a must, especially if summer travels involve flying or hitting the road for a family vacation. Kids can help keep the car clean by taking their shoes off after rest stops, and slip-on flats make that easy. Airport security is a breeze in comfortable sandals or Velcro-closure sneakers.
Be practical when packing for your next summer hotspot. With these helpful travel tips, your journey can be a smooth one.
For more information, visit Zappos.com.
July 28, 2011 2:57 pm
By Zoe Eisenberg
There is nothing like the warm evenings of summer to set the mood for a great party. Ideally, a party should be a time for you to catch-up with your friends, eat delicious food and enjoy yourself. However, planning a party often becomes more stressful than it needs to be. The following tips will ensure a hassle-free summer party that both you and your guests can enjoy.
Setting the right mood for a party is vital. Decorate with brightly colored tablecloths, plates, glasses and cloth to create a vibrant atmosphere. Keep guests cool in the daytime by offering a shaded tent or covered porch, and for evening affairs, create subtle lighting with candles and torches. If outside, create conversation spaces around the yard using outdoor furniture, blankets and bistro tables so you don’t wind up having everyone crowded around the grill. Have enough seating for at least half the guests to sit at any given time.
The Guest List
Don’t over-invite—You want to have a good time, too. Invite members from different social circles who haven’t had a chance to connect yet, but who you think would really hit it off—like friends from your office and your buddies from book club or some of the parents of your children’s friends. Most importantly, make sure you have enough room for all guests indoors, in the chance a sudden summer shower may occur.
In the summer, it’s a good idea to keep party fair fresh and light. Burgers, kebabs, grilled veggies and pizzas are all great choices. To avoid having a crowded fridge and empty wallet post-party, think about food costs and quantities. Hosts usually purchase too much food, so be sure to think about portions to people. If you are offering hot dogs, hamburgers and barbequed chicken, the average party-goer is not going to have one of each.
To keep stress at bay, do as much cooking as possible ahead of time. Or, even better, let your guests do some of the work themselves. Allow them to build their own skewers, personal pizzas or handle their own burgers on the grill, giving the food an interactive focus. Add a few simple, seasonal side salads for variety, like sweet corn and black bean with avocado, or garden tomato and fresh mozzarella.
Keep dessert simple and light, so guests have more energy for mingling and dancing. Try serving sliced seasonal fruit with fresh, home-made whipped-cream or your favorite local ice-cream.
A summer fiesta isn’t the same without a selection of cool beverages, alcoholic or not. First, decide whether you want to keep it simple or go all out. Making a delicious punch available (spiking optional!) with an assortment of beers and chilled wines is a perfectly acceptable, low-maintenance beverage idea. If you want to get fancy, hire a bartender or enlist the help of a neighborhood college student home for the summer. And don’t forget the details—find festive glasses and freeze fruit or mint leaves in ice cubes for a fresh finishing touch.
Do as much prep-work as you can ahead of time—set tables, prepare food and make sure everything is clean and clutter free. Place trash and recycling receptacles around your home and yard so you don’t end up cleaning tons of trash after the party has ended. Create a festive playlist and turn on the music before the guests are scheduled to arrive, so they walk into a party atmosphere and not a quiet house. To make your party memorable, end the evening by sending guests home with a thank-you gift—like a jar of home-made jam, locally made honey or a candle with a summery scent.
July 28, 2011 2:57 pm
Back to school shopping can be overwhelming for many budgets, but Stephanie Nelson of CouponMom.com says there are ways to strategically take advantage of special deals and coupons this year if consumers plan and research before they shop.
“The key to saving is planning,” Nelson says. “Before you even leave your house to start buying new school clothes, backpacks and supplies, sit down and plan what you need to buy with your student.”
Nelson suggests that parents take an inventory of their children’s clothes to prevent overbuying. “Go through drawers and closets to inventory your child’s current wardrobe, and sort out the items that are too small or never get worn and donate them to a local charity,” she says. “Older children’s acceptable outgrown clothes can go to a younger sibling, if possible. After determining the number of acceptable outfits you already have on hand, make a realistic list of specific items you need to buy.”
Here are some of her strategies for back to school savings:
-Buying shoes with free coupons: The back to school season is the busiest time of year for shoe sales. As a result, stores have many special promotions to get buyers' attention including buy one, get one free. Check in your newspaper circular and online for special shoe deals.
-School supplies—stock up at 90% off: Take advantage of price matching for school supplies. Basic school supplies are at their lowest price at this time of year (50-90% off)—some items are as low as 10 cents each. Watch for sale prices of up to 90%, and stock up for the entire year. Look at ads for grocery stores, drugstores, big box discount stores, and office supply stores. Bargains will continue starting now through September. At the end of August/early September, watch the clearance sections at discount stores for even lower prices if they have items left.
-Backpacks: For younger children, the backpacks on sale at discount and drugstores may be all they need. As students get older, it may be worth investing in a higher quality backpack to last several years. You can expect a good backpack to last a few years and provide the necessary support and padding for heavier books.
-Buy school clothes later in the year and find free coupons. Wait until a few weeks into the school year to stock up on new clothes, to take advantage of later-in-the-season sales and to give your child time to see what new styles they like.
-Look for advertising circulars in the newspaper for your stores. Many will have generous coupons in addition to sale prices.
-Check your store websites for coupons and promotions. Sign up for their email newsletter.
-Check coupon code websites for printed coupons or online codes at your favorite retailers.
-Check sites and print free coupons from outlet mall websites (example: http://www.premiumoutlets.com). Printing one free coupon could save $20 at your favorite store.
-Subscribe to the email newsletter of your local mall. You will be sent information and free coupons for special promotions.
-Take advantage of tax-free holidays in some states to save the cost of sales tax. See www.taxadmin.org/fta/rate/sales_holiday.html for more information.
By following these tips, parents can save a significant amount of money when shopping for back to school supplies. A little planning goes a long way.
For more information visit www.couponmom.com.
July 27, 2011 2:57 pm
Traveling with pets is becoming more and more popular, as recent surveys indicate. According to a 2011 survey by PetRelocation.com, 60% of pet owners traveled at least one time with their pet in 2010, and 93% of pet owners expect to take at least one trip with their pet in 2011. Many of these pets have traveled more than once, with 22% expected to travel monthly.
For those wanting to travel with pets, here are a few tips to keep in mind:
To find pet-friendly accommodations, websites such as petfriendlytravel.com, dogfriendly.com, petswelcome.com, or packthepets.com provide listings based on location. Many individual businesses will post on their website if they are pet friendly, but just because a website doesn't specifically say it doesn't mean that Fido isn’t welcome. A quick phone call or email will clarify.
Find out the details. It is important while communicating with a lodging choice to find out exactly what is expected. There may be fees, limitations on pet size, specific pet policies, etc. Companies that charge a fee should not be viewed negatively. Many times, they are just weeding out the pets that don’t really belong, as people who are willing to pay the extra fees typically have pets that are better behaved.
When traveling with a pet, it is a good idea to take along the pet license and rabies certificate, as well as toys, bedding, and other familiar items that will help him feel at home. Of course, making sure that flea and tick medicines are up-to-date will help to make sure that unwanted hitchhikers don't make it back home.
And most of all, respect of others will go a long way toward making sure that pets are always welcome. That means the pet should be kept under control at all times and be crated when left alone so they don’t damage anything. It goes without saying that picking up behind a pet is a basic common courtesy that should be extended no matter what the location.
For more information, visit www.cabincreekwood.com.
July 27, 2011 2:57 pm
By Keith Loria
There is nothing quite as frightening in the mortgage process as learning that your credit report contains some late payment you made in college or some mistake from a phone company that happened a decade ago.
Luckily, most errors and negative items can be taken care of and eliminated; and when it comes to buying a home, you will need to get your credit cleaned up so you can qualify for that low interest loan.
“Your credit score is the basic decider regarding your capability to attain loans, ideally on much lower interest rates,” says Greg Tilley, from a credit repair agency in Colorado. “Put simply, the higher your credit score is, the higher your chances are of being permitted to get a loan and/or credit. In the case of a low credit score, you may find yourself in an ‘extreme-risk’ classification which means lenders will be reluctant to offer you any sort of financial assistance.”
According to credit counselors, there are approximately 43 million people in the United States with credit blemishes severe enough to make obtaining home loans with reasonable terms difficult.
“There are things that can be done, regardless of whether it is a mistake or an actual failed payment on your part,” says Anna Rodriguez, of an Arizona-based credit information center. “The important thing is not to panic, get ready to plead your case and be courteous when talking to the people who have the power to make the changes.”
The simplest thing to do if you’ve missed a payment and have it on your record is to call the creditor and ask them politely to erase the negative listing. You can also do this with a well thought-out letter. There is no guarantee that a lender will do this, but if you’ve been a good customer through the years, this method has proven to be successful.
“You can also get a collection agency to agree to remove a debt from your report if you pay it,” Tilley says. “This method is called ‘pay for delete’ and it works great on smaller amounts of $500 and under, especially medical collections.”
It is advisable to get the agreement in writing before you pay them though, and only send a money order after you get them to agree.
If you are one of the millions who have defaulted on a student loan you can enter into a “rehab program,” which will get your account back on track after 12 months. This may not be the quick fix that someone buying a house needs, but the sooner you do this the better.
For disputing something that was not your fault, you can try disputing the account with the credit bureaus as “not mine.”
“The older and smaller a collection account, the more likely the collection agency wouldn’t have bothered to update the correct information and the credit bureau won’t be able to match up computer records,” Rodriguez says. “This is a great way to clear blemishes.”
A quick fix that some people use to boost their credit score is to have an older family member with a great credit rating add you as an authorized user on one of their old credit cards. This could help your score increase dramatically and you wouldn’t even need to have the card in your possession.
With more loans requiring higher credit scores today, it’s never too early to start fixing those problems.
July 27, 2011 2:57 pm
U.S. Housing and Urban Development Secretary Shaun Donovan and U.S. Department of Veterans Affairs Secretary Eric K. Shinseki announced recently that HUD will provide $46.2 million to public housing agencies in all 50 states and the District of Columbia to supply permanent housing and case management for 6,790 homeless veterans in America.
This funding, from HUD’s Veterans Affairs Supportive Housing Program (HUD-VASH), is a coordinated effort by HUD, VA, and local housing agencies to provide permanent housing for homeless veterans.
“Over the past three years, HUD helped thousands of homeless veterans find a permanent place to call home while VA provided medical treatment, case management and other services to address their specific needs,” says HUD Secretary Donovan. “We have no greater mission than to prevent and end homelessness, especially for those brave men and women who risked their lives to protect our nation.”
“This initiative will strengthen our ongoing efforts to eliminate veteran homelessness by 2015 and improve quality of life for veterans,” says VA Secretary Shinseki. “Working with our partners at HUD and in Congress, we continue to make good progress to reduce veteran homelessness though much work remains. VA is committed to providing veterans and their families with access to affordable housing and medical services that will help them get back on their feet.”
This funding to local housing agencies is part of the Administration’s commitment to end Veteran and long-term chronic homelessness by 2015. Opening Doors: Federal Strategic Plan to Prevent and End Homelessness serves as a roadmap for how the federal government will work with state and local agencies to confront the root causes of homelessness, especially among former servicemen and women.
The grants announced are part of $50 million appropriated for Fiscal Year 2011 to support the housing needs of 6,900 homeless veterans. VA Medical Centers (VAMC) provide supportive services and case management to eligible homeless veterans. This is the first of two rounds of the 2011 HUD-VASH funding. HUD expects to announce the remaining funding by the end of this summer.
Homeless veterans are referred to the public housing agencies for these vouchers, based upon a variety of factors, most importantly the need for and willingness to participate in case management. The HUD-VASH program includes both the rental assistance provided by the vouchers and the comprehensive case management that VAMC staff provides.
Veterans participating in the HUD-VASH program rent privately owned housing and generally contribute no more than 30 percent of their income toward rent. VA offers eligible homeless veterans clinical and supportive services through its medical centers across the U.S., Guam and Puerto Rico.
For more information, please visit www.HUD.gov.
July 26, 2011 8:57 pm
All over the country, people are taking the time to enjoy the simple pleasures of growing their own vegetables and herbs. From small container gardens and raised beds, to community-based home farms where people grow food with neighbors, the idea of home-grown goodness has taken root. In fact, a survey from Triscuit found that more than 60% of Americans say they are interested in growing fruits, vegetables, and/or herbs in a backyard garden and 44% have grown some of their own food in the past year.
If you haven't started digging in to the trend, it's not too late. "The Gardener Guy," Paul James, has teamed up with Triscuit to celebrate the "Home Farming" movement, which encourages the simple joy of growing fresh herbs and vegetables on home farms and community-based home farms. James shares the following tips to get you started.
Helpful tips for the novice:
Where to plant - Vegetables and herbs can be grown in practically any container, which should have a hole in the bottom so it can drain.
Nourish your garden - Make sure plants get at least five to six hours of sun a day and feed them every couple of weeks with a balanced fertilizer.
Water, water, water - Water plants every few days and increase to every day in the summer. Saturate the top half inch of soil so seeds can absorb moisture to germinate.
Give them space - All plants need sufficient room to get an adequate supply of water and nutrients. Be sure to read spacing requirements on the back of seed packets or plant tags before planting.
"The number one rule is to start small. Whether it is growing herbs on your windowsill or vegetables in your backyard, anyone can start a home farm. As you gain confidence and knowledge you can always expand,” says James.
Helpful tips for the advanced home farmer:
Secret is in the soil - Good soil can help plants grow. A great recipe for container plants is to mix 75% sterilized potting mix with 25% bagged compost. Mushroom compost is ideal.
Organic matters - Organic matter can improve soil, and includes compost, leaves, grass clippings, hay and straw. At least once a year, add organic matter to the top six inches of soil.
Block party - When you plant in blocks, there are no paths between plants for weeds to grow, or wasted space.
If you don't have space for your own home farm, consider volunteering at a community-based home farm.
For more information, visit www.triscuit.com.
July 26, 2011 8:57 pm
A thriving lawn is more than a soft, friendly playground. It can help cool the environment and clean the air. And it's not hard to practice a little backyard environmentalism. Here's how it works and what you can do to take good care of your lawn.
Keeping It Cool
Through its natural processes, grass releases water to stay cool, much the same way our bodies stay cool through perspiration. Water evaporating from your lawn absorbs excess heat to keep a constant cool temperature. Because your lawn stays cool, the air above it can be as much as 30 degrees cooler than it is above your driveway, patio or sidewalks.
Cleaning the Air
An average lawn has over 11 million individual grass plants. These little green machines work 24/7 to trap dirt, dust and impurities from the air. And like all plants, grass absorbs carbon dioxide and releases oxygen, making it possible for us to breathe a little easier.
How to Have a People and Earth-Friendly Lawn
• Well-fed lawns are strong and vibrant. In general, feeding two to four times a year will build a lawn that is ready to stand up to weeds, heat, drought and insects. If your lawn doesn't get much activity from the kids, pets or parties, 2 to 3 feedings is enough. Feeding a couple of times a year also applies if the spring and fall seasons where you live are only a few months long. If your grass is used for ball games or parties, you'll want to feed 3 to 4 times a year so the grass can regenerate and withstand wear and tear.
• Choose a fertilizer that says "for lawns" on the bag and has a spreader setting. All-purpose fertilizers don't have the right nutrient balance for lawns and may not even have spreader settings to apply the right amount.
• Set your mower to one of the highest cut settings to give your grass an advantage over heat, drought, weeds and bugs and make lawn care simpler. Mowing high means longer grass blades and therefore more deep roots that reach water in the soil better. Longer grass blades crowd out weeds, capture rain water better and reduce moisture loss from the soil.
• Mow and feed your lawn at the same time by leaving grass clippings on the lawn. These break down quickly and recycle nutrients back into the soil.
• Sweep any fertilizer and grass clippings that land on driveways and sidewalks back into the lawn to keep nutrients where the grass can use them for food.
In many parts of the country, Mother Nature provides enough water for your grass to survive. These tips should help you decide if you need to water.
• Sometimes when it's hot and dry, the lawn will go dormant and turn brown. Don't worry. Grass will bounce back again once it rains, especially if you've fed it well and mowed high.
• If you use your lawn as an extension of your living space, then your grass will let you know when it needs a drink. It will turn dull in color and footprints will appear.
• If rain isn't expected soon, water using a sprinkler that shoots the water in a jet fashion, low across your lawn. Be sure to do this in the morning to reduce water loss from evaporation.
• Compared to unfed lawns, properly fed lawns tolerate heat and dry weather better than unfed, weak lawns. That's because they have better roots and stored energy reserves to bounce back when rainfall or water returns.
For more information, visit www.loveyourlawn.us.
July 26, 2011 8:57 pm
Fannie Mae's new monthly national consumer attitudinal survey report provides eleven indicators offering a window into the opinions of Americans across the country. These behavioral insights convey what consumers think about the outlook for owning and renting a home and about their household finances, and may serve as key inputs for determining the future course of investment across housing types.
The most detailed attitudinal survey of its kind, the Fannie Mae National Housing Survey polls 1,000 Americans each month via live telephone interview to assess their attitudes toward owning and renting a home, mortgage rates, homeownership distress, household finances, and overall consumer confidence.
Homeowners and renters are asked more than 100 questions used to track attitudinal shifts (findings are compared to the same survey conducted monthly beginning June 2010). Fannie Mae conducts this survey and shares monthly and quarterly results so that we may help industry partners and market participants target our collective efforts to stabilize the housing market in the near-term, and provide support in the future.
"Our survey data on key aspects of the housing environment and Americans' household financial situations offer a comprehensive view of the marketplace that hasn't existed previously," says Doug Duncan, Vice President and Chief Economist of Fannie Mae. "There's been strong interest across the industry for a monthly consumer attitudinal data set of this size. The data have only a very short lag from collection to delivery and at present show how sensitive consumers are to contemporaneous events. We see a continued lack of confidence among consumers on home prices, the ability to sell their homes, and the state of their personal finances—all of which point to housing as a continued downside risk to economic growth going forward."
The June 2011 Fannie Mae National Housing Survey was conducted between June 1, 2011 and June 28, 2011. Interviews were conducted by Penn Schoen Berland, in coordination with Fannie Mae. Forthcoming Fannie Mae National Housing Survey Monthly Reports will be released on or around the seventh day of every month.
For more information, please visit www.fanniemae.com.