September 13, 2011 8:57 pm
Freddie Mac (OTC: FMCC) recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates, fixed and adjustable, reaching all-time record lows providing further incentive for those homeowners looking to refinance. The 30-year fixed averaged 4.15%, breaking the previous record low of 4.17% set November 11, 2010.
According to the survey, 30-year fixed-rate mortgage (FRM) averaged 4.15% with an average 0.7 point for the week ending August 18, 2011, down from the last week when it averaged 4.32%. Last year at this time, the 30-year FRM averaged 4.42%.
Additionally, 15-year FRM averaged 3.36% with an average 0.6 point, down from last week when it averaged 3.50%. A year ago at this time, the 15-year FRM averaged 3.90%.
Results also showed that the five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08, with an average 0.5 point, down from the previous week when it averaged 3.13%. A year ago, the 5-year ARM averaged 3.56%.
The one-year Treasury-indexed ARM averaged 2.86% with an average 0.6 point, down from the last week when it averaged 2.89%. At this time last year, the 1-year ARM averaged 3.53%.
Frank Nothaft, vice president and chief economist, Freddie Mac, says, "The Federal Reserve's policy statement and ongoing market concerns over the European debt market carried momentum into this week allowing all mortgage products in our survey to reach all-time record lows. For instance, 30-year fixed mortgage rates are now the lowest in over 50 years. In comparison, the Bureau of Economic Analysis estimated the average effective mortgage rate was about 5.3 percent on single-family loans outstanding during the second quarter of 2011.
"Not surprising, many homeowners took advantage of this low mortgage rate environment and have already refinanced their loans. The refinance share of applications averaged nearly 70% of all mortgage activity in the first half of this year, according to our survey. In addition, an increasing share of refinancing borrowers chose to shorten their loan terms during the second quarter, according to Freddie Mac's Quarterly Product Transition Report."
For more information, visit www.freddiemac.com or www.twitter.com/FreddieMac.
September 12, 2011 8:57 pm
With home prices at bargain levels, it may be the perfect time to consider purchasing a property to rent. Investing in a rental property can be profitable for those with time on their hands and who are knowledgeable enough to work the market appropriately. Although no purchase is ever a sure-shot, you can avoid losing money by keeping the following in mind:
Don’t assume a cheap deal is a win-win: Although low prices are always attractive to you, the buyer, don’t forget to keep other factors in mind such as location and building type. If the property is in a less-than-desirable location, you may have trouble finding the right renters or any renters at all. Look for properties in busy areas or cities where demand will never waver.
Don’t forget the extra costs: Always factor in a 3-6% closing-cost fee and keep in mind that you’ll also need funds to maintain the building. Try to plan ahead and figure out what your profit margin will likely be and determine whether buying the property in question is worth your time and investment. Too many times do first-time landlords purchase properties without thinking on a long-term scale. Cover all of your bases by taking all costs into consideration.
Be reasonable about your profit expectations: When you become a landlord, you become a collector. If tenants lose their jobs or stop paying for any other reason, it may take several weeks to evict them. Don’t simply assume that money will keep coming in. It may take time to find the right tenants and even then, there could always be a disruption in payment. Be prepared for this, just in case.
Owning a rental is different than owning a home: Some tenants may be more demanding as to what’s acceptable in terms of maintenance and repairs. State laws (which vary by state) may also impose strict rules and regulations, dishing out even more work for your plate. Although property managers can help out with a lot of this, hiring one will cost you. Be mentally and financially prepared for the task of becoming a landlord so that there are no surprises later down the road.
September 12, 2011 8:57 pm
Approximately 98% of all basements will become flooded basements, suffering from some form of water damage at some point. Homeowners up and down the East Coast and across the Southeast joined the 98% club in the last few weeks, as hurricane Irene and tropical storm Lee soaked homes and businesses with torrential rainfall and caused record flooding in many areas.
Basements are natural targets for excess water, due to their position as the lowest point in any home and the fact that water loves to run downhill. It is always advisable to make sure the landscaping surrounding a home slopes away from the structure for a distance of no less than 10 feet. In extreme cases, once the ground has been saturated, any additional water that is added will have to go somewhere, and it is going to seek the path of least resistance.
As with any sort of water damage in the home, it is always advisable to begin the water removal process as soon as possible. Water will continue to cause damage for as long as it is allowed to remain untreated, rotting wood, rusting metal, and destroying personal items and valuables, not to mention setting the stage for mold to grow.
All utilities should be shut off at the source. Water and electricity do not mix, and if gas is leaking as a result of the flood, then it only takes a spark to trigger some undesirable circumstances.
Wet/dry vacuum units or gas-powered submersible pumps should be used to extract the water from the basement. Which type of unit used depends on the depth and severity of the spill. When pumping, it is vitally important not to pump the water out too fast. Doing so may cause a sudden change in pressure that could weaken the structural integrity of the walls, making them prone to collapse. The water should be pumped out slowly but steadily, at the rate of about a third a day.
Once the water is out, the job is not finished. Carpeting, flooring and drywall will still have retained a significant amount of water. Fans, blowers, and dehumidifiers will be required to remove all residual moisture from surfaces and the surrounding air, as well as reduce humidity levels in the area to ward off mold.
Electrical appliances and outlets should not be used until the system has been checked out by a qualified electrician. The same principal should be applied to the heating and air system.
Carpets should be salvageable if they have been submerged for less than 48 hours. They will need to be taken up, dried, cleaned, disinfected and sanitized, possibly more than once. All damaged carpet padding will need to be thrown out and replaced. Floors should be checked for warping or cracking, and drywall inspected for the telltale swelling and discoloration that accompanies water damage.
If the right steps are taken, you can minimize water damage to your home and hopefully clean up before any mold has the chance to grow.
September 12, 2011 8:57 pm
Anemic demand from owner-occupant home buyers has forced investors to rent out about half of the homes they purchase—as opposed to renovating and flipping the properties, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.
The latest HousingPulse Survey results showed the proportion of first-time home buyers in the housing market rose to 36.9% in July, from 35.4% in June. Meanwhile, the HousingPulse Distressed Property Index (DPI) climbed to 46.2% in July from 44.7% in June, indicating a high percentage of foreclosed property sales and short-sale transactions in the housing market.
The gap between first-time home buyers and distressed property supply was 9.3 percentage points in July, unchanged from June. Given that home purchases by current homeowners do little to absorb the supply of distressed properties, the housing market is increasingly dependent on investors to pick up any slack in purchases by first-time home buyers.
Because the current housing environment makes it difficult for investors to sell properties, many are choosing to rent instead. Campbell Surveys estimates that investors will ultimately rent out 48% of the properties acquired in the month of July 2011. A comparable figure for the month of July 2010 would have been investors renting out 28% of acquired properties.
Significantly, real estate agents responding to the July HousingPulse survey indicated that the debate in Congress over the U.S. debt ceiling negatively affected home buyer activity last month.
“I spoke with several would-be buyers who, because of the ridiculous behavior of our government, felt uneasy about purchasing at this time. This may be contributing to the hot rental market,” reported an agent in Washington State.
The Campbell/Inside Mortgage Finance HousingPulse Tracking Survey involves approximately 2,500 real estate agents nationwide each month and provides up-to-date intelligence on home sales and mortgage usage patterns.
For more information, visit www.realestateeconomywatch.com.
September 9, 2011 8:57 pm
According to Mark Clement, professional contractor and host of MyFixItUpLife home improvement radio show, fall is the perfect time to focus on the exterior of your home. “While the weather is good, my advice is to get outside and fix up problem areas, work on the landscaping and invest in products that make your home’s exterior not only look great, but work great.”
One of the most important and personal design elements of your home’s exterior is the front door. Clement recommends taking the following steps to make sure your front door is both functional and stylish:
1. If you can see light around your main entry door from the inside, the door is hard to close or lock, or the door itself is warped, it’s time to consider a new door.
2. Even if you can’t see light, air may be moving through gaps in the weather stripping at a surprising rate. On a very cold or hot day, hold the back of your hand an inch or so away from the bottom and perimeter of your door. If you can feel air moving or a significant cold spot, that’s a signal your existing door could benefit from better sealing.
3. Determine what role you would like an entry door to play on your home’s exterior. Do you want it to be a focal point with a splash of color? Is it important that you have decorative glass in the door system? Will you need vented side lights to allow more light and air into your home? Search the Web for “Door Designer” and “My Saved Door” online tools to help visualize how a new door will look on your home.
4. Think about the weather conditions your home’s door faces along with your energy bills. If either run to the extreme, consider replacing your entryway with a high-performance fiberglass door (which has four times more insulation than wood doors). You can also request features such as enhanced weather stripping, corner seal pad, door bottom sweep and profiled sill that all work together to provide strength and stability.
September 9, 2011 8:57 pm
Environmental Data Resources Inc., (EDR), provider of property-specific environmental information and risk management solutions, recently unveiled the Environmental Issues Report (EIR), an online environmental education tool for homeowners, home buyers and real estate brokers.
The EIR provides access to information about the historical and current use of land in U.S. neighborhoods, especially uses that may pose environmental risks.
For over two decades, EDR has provided information nationwide for commercial real estate transactions. Now, homeowners and buyers, sellers, brokerages, real estate agents and home inspectors can directly access EDR's extensive database.
"Conducting an environmental history search on a possible new home or residential lot is a prudent step in the due diligence process for home buyers," says Max Cook, an environmental professional with Ranger Environmental Services, Inc. "Just as the market requires home buyers to procure appraisals and home inspections, the natural next step should be to identify impacts to properties or surrounding properties which have nearby contamination reports that could affect home occupants."
Commonly recorded impacts include contaminated soil or groundwater, and according to Cook, "facilities such as gas stations, dry cleaners, landfills, former airports and military bases are everywhere and can affect the environmental health of many neighborhoods across the U.S."
To run an EIR, users can visit www.environmentalissuesreport.com
and enter the desired address to obtain a property map that shows environmental issues within a one-mile radius. Users can then request access to a more detailed report that will help inform them of the risk any reported event(s) poses to their home or well-being. If a professional opinion on the information is needed, users can consult with an environmental professional from EDR or consult with their real estate agent regarding the next steps to take.
According to EDR, current homeowners should consider evaluating their property for environmental impacts throughout their ownership, as spills and contamination events happen often.
September 9, 2011 8:57 pm
While we all know it’s important to stash money away on a regular basis, especially in today’s tentative economic climate, it still seems like an impossible feat to many of us. According to the “Money Matters” newsletter from the Federal Trade Commission, however, saving money is indeed possible when you follow these simple strategies:
• Consider yourself a creditor. When you pay your bills, write a check to yourself. Decide on a realistic amount. Deposit the money into a savings, investment, or retirement account. Then, pay your other bills as usual. If you find that you don’t have enough money to cover all your expenses, write down the amount you are short and look for ways to trim your budget: Borrow books from the library rather than buying new; brew your own coffee rather than buying it; consider raising the deductible on your auto insurance; buy store brands instead of name brands; cancel subscriptions to magazines you don’t read or can find at the library or online; cancel health club memberships you don’t use.
Once you establish a regular savings plan, consider increasing your monthly deposit if you get a pay raise, or when you pay off a debt. For example, once you pay off your car loan, student loan, or other installment debt, deposit that amount into a savings account. Once your toddler is out of diapers, deposit the amount you spent on diapers into savings. You won’t miss the money if it’s put into savings, but more than likely, you’ll find a way to spend it if it’s in your checking account.
• If you need some fast cash, consider selling items around the house you no longer use, either online, at a garage sale, or at a local consignment shop. When you sell online, you may use an auction or classified ad site. Check the sites for policies and procedures. When you agree to consign items to a shop, you’re a consignor. You still own your stuff, but you give the shop the right to sell it. The shop becomes the consignee. When the items sell, you get a percentage of the selling price that you agreed to in advance. A profit split of 50/50 or 60/40, with the higher percentage going to the shop, is typical.
• Avoid payday lenders. A payday loan is a cash advance secured by a personal check or paid by electronic transfer. It is very expensive credit. How expensive? Say you need to borrow $100 for two weeks. You write a personal check for $115; $15 is the fee to borrow the money. The check casher agrees to hold your check until your next payday. When that day comes around, the lender either deposits the check and you redeem it by paying the $115 in cash, or you roll-over the loan and are charged $15 more to extend the financing 14 more days. If you agree to electronic payments instead of a check, here’s what would happen on your next payday: the company would debit the full amount of the loan from your checking account electronically, or extend the loan for an additional $15. The cost of the initial $100 loan is a $15 finance charge, which works out to an annual percentage rate of 391 percent. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.
September 8, 2011 8:57 pm
Will someone in your household be beating the pavement soon in search of employment? Read on. Higher education publication The Best Degrees has published a report of the top 51 degrees based on job potential in the current U.S. economy. The study set out to identify the best degrees for students seeking both strong job opportunities and high earnings.
While most studies have concentrated solely on wage potential, this research also evaluated the volume of job seeker competition within each field along with a candidate's probability of securing a job offer following graduation. The published report effectively matches college degrees to the current needs of the U.S. economy. Data was compiled from the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor.
According to this report, the Master in Business Administration degree with a concentration in Technology Management offers the best overall job potential in the current economic environment.
The top ten rankings include:
1. M.B.A. in Technology Management
2. Ph.D. in Computer Science
3. B.S. in Software Engineering
4. M.A. in Education Administration
5. M.S. in Geoscience
6. Bachelor's Degree in Computer Science
7. Bachelor's Degree in Databases
8. Master's Degree in Operations Research
9. Bachelor's Degree in Computer Networks
10. Bachelor's Degree in Nursing
Not surprisingly, the report reveals a strong demand for degrees in technology, computers, and healthcare, according to Dee Barizo, editor of The Best Degrees. Additional highlights of the report include:
• Several highly ranked two-year associate degrees
• Relative absence of degrees in finance
• High potential of bachelor's degrees without additional graduate school
September 8, 2011 8:57 pm
For many, gardening chores are winding way down as vegetables are harvested and fall approaches. However, the gardening experts at Lifetime Gardens, Inc. say it should be quite the opposite, pointing to cooler fall weather as the perfect time of year to prepare your garden for spring. A little work now will keep your raised garden beds springing up green all year long. Here are some tasks to address over the next couple of months:
• Clean out all dead plant debris like leaves, vines, stalks, and roots.
• Fill holes from harvested plants with compost and mix it in. Typically, one trowel full of compost for each square foot is a good guideline.
• After adding compost, replant the space. One advantage of raised garden beds is that soil stays warmer in the fall and warms earlier in the spring than a traditional garden, which extends the growing season and can help plants mature faster.
• Vegetables - Root crops like parsnips, turnips, carrots, and red beets can be planted now. Cover with straw when frost threatens or snow falls to extend harvest all winter. Cool weather crops like spinach, lettuce, cabbage, broccoli, cauliflower, radishes, and peas can also be planted in the fall.
• Flowers - Flowers improve the overall beauty of a garden and improve pollination. Plant flower bulbs including tulips, daffodils, hyacinths, daylilies, and crocus for vibrant color next spring. Bury large bulbs 4 to 8 inches deep and small bulbs 2 to 4 inches deep.
• To further extend the growing season, consider covering raised beds with clear plastic to capture heat like a greenhouse to protect crops from frost.
September 8, 2011 8:57 pm
The benchmark conforming 30-year fixed mortgage rate set a new record for the third consecutive week, dropping to 4.35 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.38 discount and origination points.
The average 15-year fixed mortgage remained at 3.48 percent while the larger jumbo 30-year fixed rate set a new low of 4.86 percent. Adjustable rate mortgages were mixed, with the average 5-year ARM ticking higher to 3.1 percent while the 7-year ARM slid to another record low of 3.21 percent.
A lackluster jobs report brought mortgage rates down for a sixth consecutive week. Fears of a looming recession or prolonged economic malaise have enhanced the appeal of long-term Treasury securities, with yields venturing into record-low territory. Fixed mortgage rates and yields on mortgage-backed bonds are closely related to yields on 10-year Treasury notes. While the Federal Reserve may take steps to further reduce these long-term interest rates in hopes of bringing mortgage rates still lower, expanding the pool of eligible refinancers would make the low mortgage rates more impactful on the economy.
The last time mortgage rates were above 6 percent was Nov. 2008. At the time, the average 30-year fixed rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.35 percent, the monthly payment for the same size loan would be $995.62, a difference of $246 per month for anyone refinancing now.