Higher Rates coming?

Check out this video blog from "Think Big Work Small" regarding HR 3630 that is expected to pass...
"Think Big Work Small"

Shadow Inventory Down By 16% From Last Year

The shadow inventory of distressed properties owned by lenders and not on the market decreased 16% from this time last year, according to a report released by CoreLogic today. The 1.6 million homes not on the market represent a five month supply.

A one month supply in a shadow inventory is more ideal for the housing market, but this is still an improvement over October 2010. This month last year there was a seven month supply.

California is among the six states that make up half of the current shadow inventory, along with Florida, Illinois, Texas, New Jersey and New York.

How to Hire A Contractor: Five Important Steps

Whether remodeling or making more simple home improvements, it is vital to find the right contractor. Times are tight, and horror stories about lingering projects abound. These five steps, outlined by the San Jose Mercury News, will help you hire the perfect contractor that you can trust to improve your home.

Step One: Get referrals
While there are many ways to find contractors, an easy way to start is simply asking friends and family--or your Mortgage Consultant about it. Put the question out to your contacts on Facebook, and a friend may refer you to a fantastic and trustworthy contractor.
Online sites such as Angie’s List, which requires a subscription fee, provide reviews of local contractors among other small businesses.

Step Two: Interview potential contractors
Prepare to ask the candidates questions about their professional background, recent experience with similar projects, their workers, professional associations, and obtain a list of references. Be sure to follow through and call all of the given references!

Step Three: Look for red flags
Contractors offering extremely low bids could be cutting corners with cheap labor and substandard materials. While times are difficult for many, the cheapest bid is not always the best.
Other red flags include asking for too much cash up front – more than a third – or demanding to be paid only in cash.

Step Four: Narrow it down
From those you have interviewed, narrow it down to three candidates and call all of their references. Ensure that those projects were completed on time and at the expected price. You can also check on your candidates with the Better Business Bureau for former complaints.
Meet with the three candidates face to face, and ask for a broken down price estimate that shows materials and labor expected.

 Step Five: Finalize the deal
Once you have chosen your contractor, get the agreement down in writing! This is crucial if any problems should arise later on. The Mercury recommends including the “beginning date, a completion date, and how payments will be made. It’s typical to pay a third up front, a third when the project is half done and the final third once the job is done and meets your expectations.”
Also ensure that the contractor has a certificate of insurance showing liability and workman’s compensation insurance in case of an accident.

This Week’s Market Commentary

There are six pieces of economic news that may affect mortgage rates this week.

Some of the data is considered highly important to the financial and mortgage markets, so it will likely be an active week for mortgage rates. As the week progresses, the data gets more important.

Unlike most Mondays, there is data being posted this morning with the release of October’s New Home Sales report. It will give us an indication of housing sector strength, but is the week’s least important release. Analysts are expecting to see little change between September’s and October’s sales of newly constructed homes. It will take a large change in sales for this data to influence mortgage rates.

November’s Consumer Confidence Index (CCI) will be released late Tuesday morning by the Conference Board. It gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This makes long-term securities such as mortgage-related bonds less attractive to investors and usually leads to higher mortgage rates. Analysts are expecting to see a sizable increase in confidence from last month’s level, meaning consumers were more optimistic about their own financial situations this month than they were last month. A weaker reading than the 44.0 that is expected would be good news for mortgage rates, while a stronger reading could push mortgage rates higher Tuesday.

The next piece of data that we need to be concerned with comes early Wednesday morning when revised 3rd Quarter Productivity numbers are posted. This index is expected to show an upward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It’s the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 2.6%, down from the previous estimate of 3.1%.

Also Wednesday, the Federal Reserve will release their Beige Book at 2:00 PM ET. This report, which is named simply after the color of its cover, details economic conditions by region. That information is relied on heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any significant surprises. More times than not, this report will not influence the markets enough to cause intra-day changes to mortgage rates, but the potential to do so does exist.

November’s manufacturing index from the Institute for Supply Management (ISM) will be posted at 10:00 AM ET Thursday. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a small decline in sentiment from October to November. October’s reading was previously announced as 50.8. A weaker reading than the expected 51.0 would be good news for the bond market and mortgage rates. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. The lower the reading the better the news for bonds because waning sentiment indicates a slowing manufacturing sector and makes a broader economic recovery less likely.

The biggest news of the week comes Friday morning when the Labor Department posts November’s Employment figures. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 9.0% while 117,000 new jobs were added to the economy. The income reading is forecasted to show an increase of 0.2%. An ideal scenario for mortgage shoppers would be a higher unemployment rate than 9.0%, a smaller increase in payrolls and no change in the earnings reading. If we are fortunate enough to hit the trifecta with all three, we should see the stock markets fall, bond prices rise and mortgage rates move lower Friday. However, stronger than expected readings would likely fuel a stock rally and bond sell-off that would lead to higher mortgage rates.

Overall, the most important day of the week is Friday with the employment figures being released, but we may also see sizable movement in rates Thursday. Friday’s employment data could cause a significant change in rates, but Thursday’s ISM index is also one of the more important reports we see each month. If Friday’s data reveals stronger than expected results we may see rates spike higher after its release, possibly erasing any gains from the week. It will probably be the key to rates moving lower or higher for the week. I suspect it will be a fairly active week for the markets and mortgage pricing, especially the latter part, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

Four Fireplace Safety Tips for the Winter

November 10, 2011

With fireplaces and chimneys involved in 42% of home-heating fires, it is important to maintain your fireplace and use it properly during the cold winter months.
Follow these four tips to make sure your fireplace is safe and won’t turn into a fire-starter:

1. Get your chimney professionally cleaned
Hire a chimney sweep to clean out the soot and debris in your chimney. The National Fire Protection Association recommends you do this once a year.

2. Burn the right kind of wood
Burn seasoned hardwoods that are dense, such as oak, that have been split and stored in a dry, high-up place. According to an MSN article, “green wood and resinous softwoods such as pine produce more creosote, a flammable byproduct of combustion that can build up in the chimney.”

3. Don’t overdo it with too many logs
A fire that is too big or too hot can cause a chimney to crack. Small fires create less smoke, and less creosote buildup as a result.

4. Use a spark-guard
Set up a spark guard to prevent embers and sparks from igniting something outside the fireplace. This is especially important when the room the fireplace is in is unoccupied. Glass fireplace doors or a mesh metal screen will do the trick.

More Adult Children Moving Back Home

The number of young adults who move back in with their parents, often after college, has risen dramatically over the past few years. This is in part due to the current economy as well as high unemployment rates for young people. The trend of moving back in with ones parents, however, is having an effect on the housing market.

According to a recent CNN Money article, 19% of males age 25 to 34 live with their parents today, a 5 percentage point increase from 2005. 10% of women in that age group live at home, up from 8% six years ago.

The numbers are much higher for 18- to 24-year-olds, with 59% of males and 50% of females living with their parents, up from 53% and 46%.

This has caused a decrease in the number of new households being formed, and a decrease in demand, which in turn lowers home prices. If these young adults were renting, rents would rise, leading to more people deciding to buy.

On the other hand, by living back home, young adults are saving thousands of dollars in a tough economy. This savings could be put towards a home purchase later on.

What are your thoughts on this “boomerang generation” and its effect on the market?

This Week’s Market Commentary

This week brings us the release of only two relevant monthly economic reports but neither of them is considered to be highly important. There are two important Treasury auctions this week that may influence mortgage rates more than the minor economic data that is scheduled.

It is also a holiday-shortened week with the bond market closed Friday in observance of the Veterans Day holiday. The stock markets will be open Friday, but bonds will not be traded meaning that many lenders will be closed.

Neither of this week’s monthly economic reports is expected to lead to noticeable changes in mortgage rates. This means that the stock markets will likely be a significant influence on bond trading and mortgage rates in addition to the two particular Treasury auctions. If the stock markets rally, we could see funds shift from bonds into stocks that potentially offer better returns, leading to higher mortgage rates. If stocks fall from current levels early in the week, bonds and mortgage shoppers should benefit.

The two important Treasury auctions come Wednesday and Thursday when 10-year Notes and 30-year Bonds are sold. The 10-year sale is the more important of the two as it will give us a better indication of demand for mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would probably result in upward revisions to mortgage rates.

The first monthly data of the week is September’s Goods and Services Trade Balance report early Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities’ proceeds are worth more when sold and converted to the investor’s domestic currency. However, its results will not likely directly lead to changes in mortgage rates. Analysts are expecting to see a $45.8 billion trade deficit.

November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment will be released late Friday morning. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 61.5, up from October’s final reading of 60.9. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely.

Overall, it is difficult to predict just how active this week will be for mortgage rates. As expected, last week brought us quite a bit of volatility in rates. This week could be very calm or could be just as active as last week was. I don’t believe the economic data on tap will be a catalyst. I think the key will be the stock markets and Wednesday’s Treasury auction. If they give us favorable results, mortgage rates will likely close the week lower than today’s opening levels.

Home Improvement Projects that Pay Off

In a competitive market for sellers, many are turning to home improvement projects. However, some projects are far more likely to increase your home’s value, and can also make your home sell faster.

According to Trulia, five projects are nearly guaranteed to pay off in the long run:

1. Painting – A fresh coat of white paint or a neutral color helps lighten the rooms.

2. Landscaping – Curb appeal always matters. A yard that is clean, charming, and inviting helps.

3. De-cluttering and cleaning – A deep clean and getting rid of knick-knacks makes homes more appealing to prospective buyers.

4. Plumbing repairs – Ensure that all plumbing is in great shape, and take care of any water stains or water damage.

5. Staging – Hiring a professional to stage your home can up the value, or you can do it yourself. It can make a dramatic difference in the price your home sells for. According to Trulia, good staging is both “removing your personal belongings and replacing it with more artwork, decor and cleaner-looking furniture,” as well as “tweaking the home’s paint, wall coverings and even landscaping to show the place in its very best light. “

Foreclosures Slow Down in Bay Area

Bay Area foreclosures slowed in September, down 7% from August and 10% from this time last year, according to an article in the Contra Costa Times. A report released Thursday by RealtyTrac revealed these numbers, though how long the decline will last is uncertain.
2,594 homeowners in the Bay Area were given a notice of default in September, the first step in the foreclosure process.

RealtyTrac does not include Santa Clara County in its definition of the Bay Area, however, and there was a slight increase in foreclosures in that county, as well as in San Mateo County, though that is included in the Bay Area defined by the company.

RealtyTrac CEO Daren Blomquist said that “in the next six months, it’s likely that default notices will be on a consistent upward rise in the Bay Area, once banks catch up with their backlog of current foreclosures and more people fall behind on their mortgages.”

Biggest First-Time Homebuyer Mistakes to Avoid

Looking for your first home can be an exciting experience, but it can easily get overwhelming. There are some mistakes that are pretty easy to make if you aren’t familiar with real estate.

Looking Without Knowing Your Price Range
This is a waste of time for you and your real estate agent. It can give you the wrong idea of a realistic fit for your financial situation. The first thing you should do is sit down and figure out what you can afford. Once you’ve done that, your Realtor can show you houses that fit your price range.

Discounting a Great Home Because of Decor
Just because you can’t afford to replace the hideous wallpaper right now doesn’t mean you won’t be able to soon. Getting too picky over small details that can be changed could keep you from ending up in your dream home. Use your imagination and visualize what the house could be like after you’ve put your touch on it.

Shopping Without A Mortgage Pre-Approval
What you have determined you can afford and what banks are willing to lend might not be the same thing. If you go into contract on a home and can’t get the loan you need, you will have wasted a lot of people’s time and gotten your hopes up. Contact a mortgage professional in order to get qualified for a loan before you do any serious house-hunting.

Moving With Young Children

Moving is a highly stressful and chaotic period for any body. For children in their preschool-age years, however, moving can be quite confusing. There are steps you can take before, during, and after the move to help young kids make the transition.

Before the move
Parenting Magazine suggests in its July 2011 issue that chatting regularly about the move with your kids before it happens helps them get used to the idea. Psychologist and author of Moving With Children Tom Olkowski suggests showing the children photos of the new house, neighborhood, school, and yard ahead of time.

During the move
In this phase of the moving process, many kids are terrified of losing beloved items such as teddy bears or blankets. To help them feel more comfortable, give them a backpack for moving day filled with their favorite possessions and a snack or two.

After the move
While it is tempting to get caught up in the hustle and bustle of unpacking and decorating, it is important to remember and keep up with regular family routines. This will help your children during the transition.
“Preschoolers adjust fairly quickly with support from parents, meeting new playmates, getting settled in a new preschool, and learning their way around a new house,” said Dr. Olkowski.

Real Estate Agent Safety Tips: New Clients

While new clients are a great thing, it is important to trust your instincts and stay on the safe side when meeting someone for the first time. Real estate agents have been tricked and hurt because they walked into dangerous situations, thinking it was a simple showing of a property to a new client.
THE RISK: Meeting with people you don’t know can put your safety at risk. You don’t know whether this person could potentially be a criminal, stalker, thief, or worse.
SAFETY TIPS

• Meet at the office first. Get them on your territory before you visit any property with them so you can learn more about them and collect personal information about them for your files.

• Ask for identification. The public is used to having their identification checked, so don’t be reluctant to ask because you’re scared you’ll offend someone, Siciliano says. Tell clients it’s company policy that all clients’ driver’s licenses are photocopied. “This will significantly reduce your risk because the bad guys don’t want to give you their I.D. or get their picture taken,” Siciliano says.

• Have all clients fill out a customer identification form. You can find an example of this at REALTOR.org. Click on “Prospect Identification Form” under the Office Safety Forms heading. The form asks for car make and license number, contact information, and employer information, and also requests a photocopy of the driver’s license.

• Introduce them to a coworker. When you meet them at the office, introduce them to at least one other person in your office. Criminals won’t like that others have seen them for identification purposes, according to tip sheets provided by the Washington Real Estate Safety Council.

This Week’s Market Commentary

This week brings us the release of five relevant economic reports that may influence mortgage rates in addition to two Treasury auctions. A couple of these reports are considered to be highly important to the financial and mortgage markets, meaning that we may see significant changes to rates this week. There is a very good chance of seeing noticeable changes in rates at least one day, if not several days.

The week’s first event is a 10-year Treasury Note auction Tuesday, which will be followed by a 30-year Bond auction Wednesday. It is fairly common to see some weakness in bonds before these sales as investors prepare for them. If the sales are met with a decent demand from investors, indicating interest in longer-term securities such as mortgage-related bonds still exists, the earlier losses are usually recovered after the results are announced. The results of the sales will be posted at 1:00 PM ET each day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading Tuesday and Wednesday.

The important economic data starts Wednesday morning when August’s Retail Sales report and Producer Price Index (PPI) will both be posted early morning. The sales report will give us a very important measurement of consumer spending, which is extremely relevant to the markets because it makes up two-thirds of the U.S. economy. Current forecasts are calling for a 0.2% increase in sales. Analysts are also calling for a 0.3% rise in sales if more volatile auto transactions are excluded. Larger than expected increases would be considered bad news for bonds and likely lead to an increase in mortgage pricing since it would indicate economic growth.

One of the week’s two important inflation readings is the second report scheduled for release Wednesday morning. The Labor Department will post August’s Producer Price Index (PPI), giving us an important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two since it excludes more volatile food and energy prices.

Analysts are predicting no change in the overall index, and a rise of 0.2% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market. That would be bad news for bonds and mortgage rates because inflation is the number one nemesis of the bond market as it erodes the value of a bond’s future fixed interest payments. As inflation becomes more of a concern in the markets, bonds become less appealing to investors, leading to falling prices and higher mortgage rates.

Thursday also has two reports scheduled, but one is much more important than the other. The first is August’s Consumer Price Index (CPI) during early morning hours. The CPI is one of the most important reports we see each month. It is considered to be a key indicator of inflation at the consumer level of the economy. As with its’ sister PPI report, there are two readings in the report- the overall index and the core data reading. Current forecasts show a 0.2% increase in the overall reading and a 0.2% rise in the core data reading. As with the PPI, a larger increase in the core data would likely lead to higher mortgage rates Thursday.

August’s Industrial Production data will be posted mid-morning Thursday. This report 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 but could help change mortgage rates if there is a significant difference between forecasts and the actual reading. Analysts are expecting to see little change from July’s level of output. A sizable increase could lead to higher mortgage rates, while a weaker than expected figure would indicate a still softening manufacturing sector and would be considered good news for bonds and mortgage rates. However, the CPI is the key data of the day and will likely influence mortgage pricing much more than the production data will.

The last release of the week will be posted by the University of Michigan late Friday morning. Their Index of Consumer Sentiment will give us an indication of consumer confidence, which hints at consumers’ willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase.

This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 56.3, which would mean confidence rose from August’s level. That would be considered bad news for bonds and mortgage rates because strengthening consumer spending fuels economic growth.

Overall, I think we need to label Wednesday or Thursday as the most important day of the week with the Retail Sales and CPI reports being released respectively. However, Tuesday’s 10-year Treasury Note auction also has the potential to heavily influence bond trading and mortgage rates. Today will probably end up being the calmest day for mortgage rates, but we still may see minor changes if the stock markets show much movement.

Prepare for an Earthquake: Making a Disaster Kit

August 26, 2011

In California, earthquakes can and will happen here quite often. If a big one strikes on this earthquake-prone area, it is important to be prepared and keep you and your family safe.

Creating a disaster kit for your home is not difficult and could make all the difference one day, as well as providing peace of mind. The California Emergency Management Agency (CalEMA) emphasizes that the first 72 hours after a major disaster are critical.

“Electricity, gas, water, and telephones may not be working. In addition, public safety services such as police and fire departments will be busy handling serious crises. You should be prepared to be self-sufficient – able to live without running water, electricity and/or gas, and telephones – for at least three days following a major emergency.”

In order to prepare for three days, create a Disaster Kit with supplies for three days and place it in a central location. Most importantly, make sure you have one gallon of water per person, per day. This is the amount of water needed for survival.

Other supplies, including food, essential medications, and a freshly stocked first aid kit are essential in a proper disaster kit. This state video runs through how to make one: Emergency Kit Video

Foreclosures Could Become Rental Homes

The White House is aiming to improve the housing market with a new initiative – turning foreclosed properties into rental homes. According to the Wall Street Journal, the Obama Administration is seeking input from investors on launching this potential new program.
The video below explains the idea in detail. Do you think this program would help the housing market?

Tagged as: foreclosure, real estate, renting

This Week’s Market Commentary

This week brings us the release of four relevant economic reports in addition to another FOMC meeting and two relevant Treasury auctions. With all of the volatility in the markets of the past two weeks, it is difficult to say whether this will be an active week for mortgage rates. Under normal circumstances, it would be. But it is hard to label any week as active if comparing to the previous two.

The first economic data of the week is Employee Productivity and Costs data for the second quarter that will be released Tuesday 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 pricing, but since it is the only data of the day it may influence rates slightly during morning trading. Analysts are currently expecting to see a decline in productivity of 0.6% and a 2.2% jump in labor costs. A stronger than expected productivity reading and a smaller than expected increase in costs could help improve bonds, leading to lower mortgage rates Tuesday.

The FOMC meeting is a single-day event that will be held Tuesday and will adjourn at 2:15 PM ET. It is expected to yield no change to key interest rates. Usually, the post-meeting comments seem to have more of an influence on the markets than the rate adjustments themselves, or a lack of one in many cases. Look for the statement to lead to volatility during afternoon trading if it hints at what the Fed’s next move may be and when it will come. Market participants will be looking for any indication of a move to help boost economic activity. If the statement does not give us new information, mortgage rates will probably move little after its release.

There is no important economic data on the calendar for Wednesday. June’s Trade Balance report will be released early Thursday morning. It gives us the size of the U.S. trade deficit but is the week’s least important report and likely will have little impact on the bond market and mortgage rates. Analysts are expecting to see a $48.0 billion deficit, but it will take a wide variance to directly influence mortgage pricing.

Friday has the remaining two pieces of economic data, one of which is highly important to the markets and mortgage rates. July’s Retail Sales data is that report. This data is very important to the financial markets and mortgage rates because it helps us measure consumer spending. Since consumer spending makes up 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, potentially further slowing the economic recovery. 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 0.5%.

The last report of the day will come from the University of Michigan, who will release their Index of Consumer Sentiment for August at 9:55 AM. This index gives us a measurement of consumer willingness to spend. If confidence is rising, then consumers are more apt to make large purchases. This helps fuel consumer spending and 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 the Retail Sales report does. Analysts are expecting to see a reading of 62.5, which would be a decline from July’s revised reading.

Also worth noting are two important Treasury auctions this week. The sale of 10-year Notes will be held Wednesday while 30-year Bonds will be sold Thursday. We often see some weakness in bonds ahead of the sales as the firms participating prepare for them. However, as long as they are met with decent demand from investors, the firms usually buy them back. This tends to help recover any presale losses. But, if the sales are met with a lackluster interest from investors- particularly international buyers, the bond market may move lower after the results are posted and mortgage rates may move higher. Those results will be announced at 1:00 PM each sale day.

Overall, it is difficult to label one particular day as the most important. Friday’s sales data is the most important economic report, but Tuesday’s FOMC meeting has the potential to cause plenty of movement in the markets and mortgage pricing also. Tomorrow will also be interesting, especially considering the size of the sell-off in bonds Friday. I would not be surprised to see that negative tone extend into tomorrow’s bond trading and mortgage rates. I suspect the FOMC meeting will not have as much of an influence on mortgage rates as one may expect, but the markets can react wildly to a single word or omission of a word in the statement, so we need to be cautious. This is certainly another week that continuous contact with your mortgage professional is highly recommended if you are still floating an interest rate.

How to Hold a Successful Yard Sale

Whether you are getting ready to move out of your old home or simply making space for a new motorcycle, a yard sale is an excellent way to get rid of clutter and make money at the same time.

Not all yard sales are created equal, however. Planning and organization are key to making the most out of the sale. The video below gives simple advice on how to make the event a smooth success.

5 Things to Think About When Looking for Your Dream Home

While on the hunt for a perfect home, it can be immensely helpful to create a wish list of sorts. This can help you and your real estate agent obtain a clear picture of what type of home would best suit you.
Some things to consider:

1. Move-in ready or fixer-upper?
Making a home “your own” can make fixer-uppers an attractive option, along with the lower cost. Making a mark on your new home via renovations. Take some time to think about what homeownership means to you, and whether you are interested in renovation.

2. Upgrades
Certain upgrades in a home, such as marble or granite counters, are often coveted by buyers. Consider what type of upgrades are important to you – energy-efficiency, professional grade appliances, luxury tiling? Make a list and show your Realtor.

3. The Yard
What type of backyard are you looking for, and how important is it to you? Think about low versus high maintenance yards, the amount of space you’d like, and what kind of yard would best suit your lifestyle.

4. Swimming Pools
For some homebuyers, having a swimming pool can be a dealbreaker. If this is something that you really desire in your dream home, make that clear to your real estate agent so that they can narrow the search for you.

5. Schools in the Area
Last but certainly not least, the quality of the schools in the area of a dream home should be an important thing to research. Ask your Realtor for information about schools in the area of your search, and comparisons between them. This information is easily obtained, and real estate agents will be more than happy to show you school scores and more. Also consider private schools, if that is an option for your family.

Inexpensive Home Maintenance Tasks Can Prevent Big Expenses in the Future

For a few hours’ time and a small investment, you can do a lot to protect your property. Even renters can ensure comfortable surroundings with some of these tips.

Get energy efficient. If you have not yet installed a programmable thermostat, now is the time to do it. You can reduce your cooling costs by 10 percent, according to the U.S. Department of Energy. Thermostats cost $40 to $70.

Seal around the tub and shower. Cracked or poorly sealed caulking around tubs, showers, and sinks can lead to water damage to floors, walls, and the ceilings below, say experts writing in Money magazine. When you see cracks or gaps, buy a $5 tube of caulking and reapply.

Prevent fires. Check your fire extinguisher to see if it’s still charged. If you need a new one, buy an extinguisher that works on both kitchen and electrical fires. The National Fire Protection Agency recommends one that is labeled ABC. Cost is about $40.

Test the sump pump. Before a heavy rain floods your basement, test your sump pump to see if it works. Pour water into the well around it. Raising the water level should make it go on.

Prevent shocks. Electrical outlets near water in the kitchen and bathroom should have ground fault circuit interrupters that protect from a shock They have “test” and “reset” buttons. If you need one, the GFCI costs about $10, but you should hire an electrician to install it.

Service the garage door. Spray penetrating oil such as WD-40 into the hinges and rollers so the door will open and close more easily. Test the safety reverse mechanism by placing an object in the door’s path to see if it stops. WD-40 costs about $7.

This Week’s Market Commentary--Busy Week!

There are seven reports scheduled for release this week may affect mortgage pricing in addition to two relevant Treasury auctions, but despite all that, the current debt ceiling issue may take center stage. With no data scheduled for release today, the stock markets and updates out of Washington will drive the markets.
Friday evening’s collapse of talks on the topic happened after the markets closed, so it will be interesting to see how we fare this morning. I suspect it is going to be ugly if significant progress is not made in Washington. At posting time of this report, the Japan indexes are showing losses, but not by a concerning amount.

The economic data starts Tuesday when the Conference Board posts their Consumer Confidence Index (CCI) for July at 10:00 AM ET. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. If consumers are more confident in their own financial situations, they are apt to make large purchases in the near future. This is important because consumer spending makes up two-thirds of the U.S. economy. If the CCI reading is weaker than expected, meaning that consumers were less confident than thought, we may see bond prices rise and mortgage rates drop Tuesday. Current forecasts are calling for a reading of 56.0, which would be a lower reading than June’s 58.5 and indicate consumers are becoming less comfortable with their finances.

June’s New Home Sales will also be released late Tuesday morning. It gives us a measurement of housing sector strength and mortgage credit demand. Analysts are expecting it to show a small increase in sales of newly constructed homes, indicating that the housing sector gained some strength. That would be considered negative news for bonds, but since this data tracks only 15% of all home sales it usually has little impact on the bond market and mortgage rates unless it varies greatly from forecasts.

Wednesday brings us two events that are relevant to mortgage rates. The first will come from the Commerce Department when they post June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are currently calling for an increase in new orders of 0.4% from May to June. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. A stronger than expected number may lead to higher mortgage rates Wednesday morning. If it reveals a decline in new orders, mortgage rates should drop because it would indicate manufacturing weakness. It should be noted though that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move mortgage rates much.

The Federal Reserve will release its Beige Book report Wednesday afternoon. This report is named simply after the color of its cover, but it is considered to be important to the Fed when determining monetary policy during their FOMC meetings. It details economic activity and conditions by region throughout the U.S. Since Fed Chairman Ben Bernanke’s testimony to Congress two weeks ago gave us a recent update, I don’t think we will see any significant surprises in this report. Therefore, we will likely see little movement in mortgage rates Wednesday afternoon as a result of this report.

There is no relevant monthly or quarterly data scheduled for release Thursday, but there are three releases scheduled to be posted Friday morning. The first is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP), which is considered to be the best indicator of economic activity. It is the sum of all goods and services produced in the U.S. and usually has a great deal of influence on the financial markets. This reading is arguably the single most important we get regularly. Current forecasts are estimating that the economy grew at a 1.6% annual rate during the second quarter. A faster pace will probably hurt bond prices, leading to higher mortgage rates Friday. But a smaller than expected reading would likely fuel a bond market rally and lead to lower mortgage pricing.

The second report of the day Friday is the 2nd Quarter Employment Cost Index (ECI) that measures employers’ costs for wages and benefits. It is considered to be an important measurement of wage inflation and can impact the bond market and mortgage rates if it varies much from forecasts. If it shows a rapid increase, raising inflation concerns, the bond market may drop and mortgage rates rise. It is expected to reveal an increase of 0.5%, but the GDP reading likely will have more of an influence on the markets and mortgage rates.

Friday’s third piece of data is the final revision to July’s University of Michigan Index of Consumer Sentiment that will help us measure consumer optimism about their own financial situations. As with Tuesday’s CCI release, this data is considered important because rising consumer confidence usually translates into higher levels of spending. This adds fuel to the economic recovery and is looked at as bad news for bonds. Friday’s release is an update to the preliminary reading we saw two weeks ago, so unless we see a drastic revision to the preliminary estimate, I think the markets will probably shrug this news off.

Also worth mentioning are a couple of Treasury auctions that may affect bond trading and mortgage rates this week. The two most important are Wednesday’s 5-year Note and Thursday’s 7-year Note sales. Results of this week’s auctions will be posted 1:00 PM ET each day. If investor interest is strong, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher mortgage rates Wednesday and Thursday afternoons. Unless progress is made on the debt ceiling prior to these sales, it is highly unlikely that they will go well.

Overall, I am expecting an extremely active week in the financial and mortgage markets. With several important economic reports on tap, we will likely see noticeable movement in mortgage rates more than one day. The most important report of the week is Friday’s preliminary GDP reading, making it one of the most important days of the week. But it is difficult to say which day we can expect to see the most movement in rates as several of the releases and scheduled events have the potential to influence mortgage rates. The wild card is the debt ceiling. Any news on that topic will probably heavily influence the financial and mortgage markets. Therefore, I STRONGLY recommend maintaining contact with your mortgage professional this week if still floating an interest rate!

7 Things You Should NOT Do When Applying for a Home Loan

This is a list of things to steer clear of when you are seeking to obtain financing for a home. If you do any of these things, please contact your loan officer immediately.
Even if you have been pre-qualified, we can help you re-qualify.

1. Don’t buy or lease an auto!
Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and prevent you from qualifying for a home loan.

2. Don’t move assets from one bank account to another!
These transfers show up as new deposits and complicate the application process, as you must then disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts later if you need to.

3. Don’t change jobs!
A new job may involve a probation period, which must be satisfied before income from the new job can be considered for qualifying purposes.

4. Don’t buy new furniture or major appliances for your “new home”!
If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to meet the closing costs.

5. Don’t run a credit report on yourself!
This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

6. Don’t attempt to consolidate bills before speaking with your lender!
The loan officer can advise you if this needs to be done.

7. Don’t pack or ship information needed for the loan application!
Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be sent with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

This Week’s Market Commentary

This week brings us the release of seven important economic reports for the bond market to digest in addition to the minutes from the last FOMC meeting, two relevant Treasury auctions and semi-annual Congressional testimony by Fed Chairman Bernanke.

Several of the economic reports are considered to be of high importance, meaning we will likely see more volatility in the financial markets and mortgage pricing over the next several days. There are also some heavily watched corporate earnings releases scheduled for the stock markets this week that can influence bond trading and therefore, mortgage pricing. In other words, we are in for a heck of a week.

The first data of the week is May’s Goods and Services Trade Balance report early Tuesday morning, which measures the size of the U.S. trade deficit. This data is not considered to be of high importance to the bond market and will not likely have an impact on mortgage rates. However, if it does vary greatly from analysts’ forecasts of a $44.0 billion deficit, we may see some movement in bond prices and possibly a slight change in mortgage pricing. This is the least important of this week’s economic data.

Also worth noting about Tuesday is the afternoon release of the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show unexpected dissention among some of its members during discussion and voting at the last meeting or give any indication of the Fed’s possible next move with monetary policy.

There is no relevant economic data scheduled for release Wednesday, but Fed Chairman Bernanke will present his semi-annual update about the economy and monetary policy before Congress. He will speak before the House Financial Services Committee Wednesday and the Senate Banking Committee Thursday, each at 10:00am ET. His testimony will be broadcast and watched very closely.

Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation and unemployment concerns that will lead to changes in key short-term interest rates.

This should create a great deal of volatility in the markets during the prepared testimony and the question and answer session that follows. If he indicates that inflation may become a point of concern or anything that hints at rapid economic growth, we can expect to see the bond market fall and mortgage rates rise Wednesday.

We usually see the most movement in rates during the first day of this testimony as the Chairman’s prepared words for both appearances are quite similar to each other, meaning that the second day of testimony rarely gives us anything we did not hear during the first day. The general exception is something asked or answered during the Q&A portion of the second day’s appearance.

Wednesday also starts the first of the two important Treasury auctions when 10-year Notes will be sold. That sale will be followed by a 30-year Bond auction Thursday. These sales can influence market trading in bonds and possibly affect mortgage rates. If the sales are met with a strong demand from investors, particularly Wednesday’s sale, we should see afternoon improvements in bonds that could lead to downward revisions to mortgage rates. However, if concern about the amount of debt that is being sold keeps buyers on the sidelines, we may see bonds fall after results are posted at 1:00 PM ET and mortgage rates move higher those days.

In addition to the second day of testimony and the 30-year Bond auction, Thursday does have some key economic data being posted. The first is June’s Producer Price Index (PPI) from the Labor Department. It is a very important release because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.3% decline in the overall reading and a 0.2% increase in the core data reading. The core reading is the more important of the two because it excludes more volatile food and energy prices. The bond market should react quite favorably if we get weaker than expected readings, but a larger than expected rise in the core reading could send mortgage rates higher Thursday.

June’s Retail Sales report will also be posted at 8:30 AM ET Thursday morning. This data is considered to be of high importance because it measures consumer spending. Consumer spending makes up two-thirds of the U.S. economy, so any related data is watched closely. The Commerce Department is expected to say that sales at retail establishments fell 0.2% last month. A larger than expected decline in sales could help fuel a bond rally and lead to lower mortgage rates because it would mean that the economy is likely weaker than thought.

Friday has the remaining three economic releases, beginning with what arguably is the single most important monthly report for the bond market. That is June’s Consumer Price Index (CPI) at 8:30 AM ET, which is a mirror of Thursday’s PPI with the exception that the CPI measures inflation at the more important consumer level of the economy. Analysts have forecasted a 0.1% decline in the overall index and a 0.2% rise in the core data. The core data is considered to be the key reading because it gives us a more stable measure of inflation. Higher than expected readings could raise inflation fears and push mortgage rates higher, while readings that fall short of forecasts should lead to lower rates Friday.

June’s Industrial Production data is the second report of the day at 9:15 AM ET. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show a 0.2% rise in production, indicating that the manufacturing sector strengthened slightly during the month. That would basically be bad news for bonds, however, the CPI will take center stage Friday morning.

The final report of the week is the University of Michigan’s Index of Consumer Sentiment. This index is released in a preliminary form each month and then followed up two weeks later with a final reading. The preliminary reading for July will be posted late Friday morning and is expected to drop slightly from June’s final reading of 71.5. This would indicate that consumers were a little less comfortable with their own financial situations this month than last month. It is believed that if consumers are confident in their own finances, they are more apt to make large purchases in the near future. And with consumer spending making up two-thirds of our economy, investors pay close attention to reports such as these. So, a decline in confidence would be good news for mortgage rates because it means many consumers will probably delay making a large purchase in the immediate future, limiting economic activity.

Also worth noting is the fact that tomorrow kicks off the corporate earnings reporting season when Alcoa posts their quarterly results. Market participants are anxiously waiting for these announcements to see how the economy is affecting earnings. Just as important as this past quarter’s results are their forward-looking estimates. If revenue, earnings and projections from the big-named companies exceed expectations, stocks will likely rally.

This would make bonds less appealing to investors and lead to bond selling. But if results are weaker than expected, indicating that the economy is stifling earnings, bonds will be more attractive to investors as stocks slide. That could help boost bond prices and help lower mortgage rates.

Overall, it is difficult to try to label one particular day as the most important this week. It is easy to say the least important will likely be tomorrow, but every other day has important data or other events that can cause significant movement in the markets and mortgage rates. The single most important report for the bond market is the CPI Friday morning, but Thursday’s data is not far behind. Wednesday’s Bernanke testimony could be huge also. The week’s corporate earnings also have the potential to heavily influence bond trading and mortgage rates via stock market swings. Therefore, it is highly recommended to maintain fairly constant contact with your mortgage professional this week if still floating an interest rate.

Avoiding Foreclosure

When the stress of a possible foreclosure rises, it is important to remember that there are many resources out there to help avoid it. The programs and agencies below all specialize in helping people avoid foreclosure on their homes:

U.S. Department of Housing and Urban Development (HUD)
800-569-4287
http://www.hud.gov/local/ca/homeownership/foreclosure.cfm

HUD Avoidance Counseling
http://www.hud.gov/offices/hsg/sfh/hcc/fc/

Making Home Affordable Program
888-995-HOPE
http://www.makinghomeaffordable.org/

Housing California
916-447-0503
http://www.housingca.org/nr/resource/foreclosure_resources/
State of California – Consumer Home Mortgage Information
http://yourhome.ca.gov/

Fannie Mae Resource Center
800-732-6643
http://www.fanniemae.com/homeowners/index.html

Project Sentinel – Redwood City counseling agency
(HUD Approved Agency)
888.331.3332
http://www.housing.org/

Neighborhood Counseling Services – Silicon Valley
(HUD Approved Agency)
408-279-2600
http://www.nhssv.org/foreclosure-counseling.htm

Neighbor Works America
202-220-2300
http://www.nw.org/network/foreclosure/default.asp

National Foreclosure Mitigation Counseling
202-220-6314
nfmc@nw.org

The important thing to remember is that foreclosure isn’t always inevitable, and there are many programs and agencies ready to help. Share these resources if someone you know is going through a possible foreclosure on their home.

10th Annual Coldwell Banker Charity Golf Tournament a Success

Mortgage California is a proud sponsor of the 10th annual Coldwell Banker Charity Golf Tournament, held on Monday June 27. The tournament was a great success, with benefits going to the Children’s Gaucher Research Fund.

The CGRF was founded in 1999 by the Macres family in memory of their son, Gregory, whom they lost to the disease.

They have raised over $1.6 million for medical research on Gaucher Disease, funded important research projects, and held several scientific conferences.

The golf tournament, held at the North Ridge Country Club, raised a substantial amount of money for this great cause. We are very proud to have sponsored a hole at this wonderful charity tournament.

This Week’s Market Commentary

This week brings us the release of four economic reports for the markets to digest, with three of them being considered important.

One of those three is one of the more important reports we see each month.

There is relevant data or events scheduled for each day except Thursday, so it will likely be another active week for mortgage rates.

May’s Personal Income and Outlays data will be posted early this morning. This report gives us an indication of consumer ability to spend and current spending activity. They are important because consumer spending makes up two-thirds of the U.S. economy.

Analysts are expecting to see an increase of 0.3% in income and a 0.1% rise in the spending portion of the report. Smaller than expected increases should be good news for the bond market and mortgage rates.
June’s Consumer Confidence Index (CCI) is the second report of the week. It will be posted late Tuesday morning. It is important to the financial markets because it measures consumer willingness to spend. If consumers are more confident about their own financial situations, they are likely more apt to make large purchases in the near future.

Current forecasts are calling for a reading of 60.3, down from last month’s 60.8 reading. The lower the reading, the better the news for bonds and mortgage rates.

Friday has two reports scheduled, with the first coming from the University of Michigan who will update their Index of Consumer Sentiment for May. This index gives us a measurement of consumer willingness to spend.
As with Tuesday’s CCI, if consumers are more comfortable with their own financial situations, they are more apt to make large purchases in the near future. Since consumer spending makes up two-thirds of the U.S. economy, any related data has the potential to affect bond trading and mortgage rates.

The second report of the day and the last data of the week is the Institute of Supply Management’s (ISM) manufacturing index for June late Friday morning. This index measures manufacturer sentiment by surveying trade executives on current business conditions. A reading above 50 means that more surveyed executives felt business improved during the month than those who felt it had worsened.

Analysts are expecting a reading of 51.1. That would indicate that manufacturers felt business worsened from the previous month, when we saw a 53.5 reading. Good news for bonds and mortgage rates would be a weaker than expected reading, particularly something below the recessionary threshold of 50.0.

Overall, tomorrow and Tuesday’s data should bring some volatility in trading and mortgage rates, but Friday’s ISM report is definitely the most important of the week.

Mortgage California Ranked #3 Company to Work For In Bay Area

In the Sunday edition of the Mercury News, the Bay Area News Group published their February survey results of the Top Work Places. We were ranked #3 for mid-sized companies (150 to 500 employees). The rankings were based upon surveys completed by employees which makes this honor even more special.

We also received a special award in the area of Ethics for the way we conduct business. Below are links to the rankings, our profile, the special awards listing, and information about how the rankings were compiled. Don’t miss the picture of the “worker bees” which was printed on the front page of the special section in the newspaper.

Mercury News Top Workplaces List
Mortgage California Profile
Ethics Award
Mortgage California mentioned in Open Communication article in SJ Mercury
Congratulations, and especially thank you, to all employees and clients for making this one of the best places in the Bay Area to work! Mortgage California is currently hiring loan officers; take a look at our website to get in contact and learn more.

“This is a huge honor, and purely reflective of all of [the employees'] individual efforts and dedication to each other,” said Rob Reid, CEO. “I am very honored to be part of this great team.”

Mortgage Rates Set New 2011 Low

Mortgage rates have continued their decline and have set yet another 2011 low, according to the Wall Street Journal.

A decrease in new jobs has caused the mortgage rates to fall to the lowest point of the year. The decline in fixed rates represented the eighth-straight weekly fall.

This is a result of the statement by the Bureau of Labor Statistics this week that employers did not add nearly as many private-sector jobs as they expected.

Freddie Mac’s most recent survey shed light on the lower rates, and the downward trend is continuing.

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I am Truly Flattered!

Loan Officer Fosters Dogs In Need

June 14, 2011

Christina Herzig, our 2010 Rookie of the Year award winning loan officer, was surprised by her interest in the real estate finance industry when she stumbled into it in 1998.

“Honestly, I had no idea what real estate finance was until I was “lended” out as a fill in receptionist for a small brokerage firm in the same building where I was working at the time.  One of the loan officers saw my interest in learning about what I was doing, hired me as his assistant and showed me the ropes,” she said.
Her skill was quickly apparent, and she found that she loved the numbers, the interactions with the people and the uniqueness of each file.  The job was never boring to her, and Christina had found her career.

Today, she is extremely successful in a job she adores.

“I love the problem solving involved in most loan transactions.  Most loans are not “vanilla” loans that are easy to close,” said Christina. “Most of all, I enjoy the relationships I develop with my clients during the process and hearing their excitement when we get their loan approved and seeing their joy at the signing.”

Aside from her work at Mortgage California, Christina is highly involved with the Animal Friends and Rescue Project, an amazing organization that rescues animals that have been abandoned or are at their “expiration” date with other shelters. Christina volunteers as a foster parent for these dogs, taking care of them until they are adopted.

“I find it to be so incredibly rewarding to see these great dogs find loving homes where there is a mutual giving/taking of love and joy,” said Christina.

Chocolate

Chocolate, a nine-year-old Chow mix, came into Christina’s life after the dogs’ family lost their home. A true Houdini, Chocolate was a mastermind at getting past obstacles and by his foster mom’s side.

“She figured out how to jump over her 3’ high puppy pen.  She figured out how to move the baby gate out of the way to get into my room at night,” said Christina.  “She even figured out how to move my heavy bar stools, climb over her crate and move the baby gate to get to me.  Nothing stopped her.”

Though she does get attached to the dogs she fosters, it helps knowing that they are going to loving, forever homes. Her caring nature carries over from her volunteering to the way she values her clients, and is one of the things that makes Christina an outstanding loan officer.

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Should You Pay Off Your Mortgage?

Homeowners may dream of the day they can pay off the mortgage. Financial advisors across the country say they are hearing questions all the time about the wisdom of retiring the mortgage early.

The pros:
* The obvious reason to do it: Paying off the home loan could save tens of thousands of dollars in interest during the time you would make payments.

* The second reason is the peace of mind you have from owning your home free and clear.

* Most experts recommend owning your home free and clear before you retire.

* If you still have a higher interest mortgage, paying down your principle will make refinancing easier.

The cons:
* Some financial needs should come first: Max out your 401(k) contributions. Pay off credit cards. Create a 6-month emergency cash fund.

* Mortgages are cheap money. When you pay down your mortgage or pay more every month, you are probably hoping for those big dollar savings on interest. But remember these are future dollars and they will be worth less 20 years from now. Keep your higher value dollar today and pay the bank its lower value dollar in the future.

* If you plan to move to another city or trade up or down, it’s not wise to pay off the mortgage. You would tie up your money in a home you might not be able to sell very soon when you want to buy another one.

* The mortgage interest tax deduction doesn’t help everyone. If you are in a high tax bracket, it’s more valuable. If you are retiring or in a lower tax bracket, it’s not worth as much.

* Check to see if the investment you could make with the payoff money would earn more interest than what you are presently paying on your home loan. A 50/50 stock/bond portfolio has historically earned 8.2 percent in the long term, but might only make 6 percent now, according to Money magazine.
Their conclusion The Money experts say that if paying off the mortgage would give you great satisfaction and a sense of security, go ahead and do it.

Tagged as: finance, home ownership, loans, mortgage, real estate

How to avoid big problems with your do-it-yourself project

If you have a few construction skills, you might be eager to tackle a home modification project. Before getting started, here are several steps and cautions that should be considered.

* Make a written plan. Prepare a day-by-day calendar outlining each portion of the project and how many hours it will take to compete.

* Get a city permit. If you are adding a room, putting up a storage building or changing your patio into a room, you need a permit. Some plumbing and electrical jobs require permits, as do changing gas or sewer lines.

* Buy the correct materials. Skimping with inexpensive products can compromise the quality of the job.

* Invest in a set of tools specifically designed for the repair or the construction job.

* Use safety gear. Wear safety goggles when using a power saw. Buy the best gloves for the job. Wear a hard hat if others will be working above you.

* Before you pick up a power tool, climb a ladder or raise a hammer, consider whether you can do the job safely. If you aren’t sure, hire a professional for that part of the project, especially when it includes electricity or moving heat ducts or plumbing lines.

* Be very cautious with chain saws. They send many a do-it-yourselfer to the emergency room.

* Emphasize accuracy. Remember the principle, “Measure twice, cut once,” when working with drywall, baseboards or pipes.

* Expect the unexpected. If you are moving a wall, don’t be surprised to find problems such as termites, mold inside the wall, or electrical wiring that has to be moved.

It’s exciting to plan and to get started on a DIY project, but always remember: Safety first!

Want Granite Countertops? Prices are Lowest Ever

The price of granite has declined by about 50 percent. You can thank competition for the reduction as producers in Asia and Brazil quarries now market granite in the United States.

Remodeling contractors say the cost of labor for kitchen projects is down as well. People who have waited out the recession and have the money to do it are moving forward with kitchen updates.

The Harvard Joint Center for Housing Studies say remodeling spending fell 16 percent between 2007 and 2010. Now, affordable prices for traditionally upscale appointments are perking up homeowners’ remodeling plans.

According to the National Association of Home builders, overall remodeling costs are running at least 20 percent lower than 2006.

The biggest budget killer: impulse buying.

Studies at the University of Pittsburgh show that impulse buying adds up to 30 percent of overall spending. Here are some tricks to keep you from unplanned purchases:

• Look at the clothing or electronic gadget but don’t touch them. Picking up an expensive sweater or cellphone increases your sense of ownership, which makes it more difficult to resist buying.
• Consider what you would rather do with the money. Save it toward a grand vacation? Focus on which one you would rather give up.
• Shop with a list. This classic idea can be one of the biggest money savers of all. Decide what you want and need. Mentally decide how much you are willing to spend on gifts, personal care and items for your home, and how you could save one-third of those costs over a year.
• Create separate savings accounts for items like vacations, Christmas, and new furniture. One Dartmouth researcher says a reminder on your calendar can help. Reminders like “Deposit tax refund to Roth IRA” can boost savings by 15 percent.

Tagged as: decor, home improvement, real estate, remodeling, saving money, staging

This Week’s Market Commentary

This holiday-shortened week brings us the release of five important economic reports for the markets to digest. Two of the five are considered to be of very high importance to the bond market and mortgage rates. The remaining reports are considered to be of moderate importance to the markets.

The financial and mortgage markets will be closed today in observance of the Memorial Day holiday and will reopen Tuesday morning.

The Conference Board will start the week’s more important releases by posting their Consumer Confidence Index (CCI) at 10:00 AM Tuesday. This is data measures consumer willingness to spend. If the index rises, it indicates that consumers feel better about their personal financial situations and are more apt to make large purchases. If confidence is sliding, analysts think consumer spending may slow in the near future. The latter is good news for the bond market because consumer spending makes up two-thirds of the U.S. economy. A decline in the index should boost bond prices and push mortgage rates lower Tuesday morning. It is expected to show a reading of 66.3, up from April’s 65.4 reading.

The Institute for Supply Management’s (ISM) manufacturing index will be posted late Wednesday morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. Analysts are expecting to see a 57.6 reading in this month’s release, meaning that sentiment fell during May. A smaller reading will be good news for the bond market and mortgage shoppers while an unexpected increase could contribute to higher mortgage rates Wednesday.

The revised 1st Quarter Productivity and Costs data is the first of two reports that will be released Thursday morning. This data measures employee output and employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high. Last month’s preliminary reading revealed a 1.6% increase, but I don’t think this piece of data will have much of an impact on the bond market or mortgage pricing unless it varies greatly from that reading.

The second release of the day will come from the Commerce Department, who will post April’s Factory Orders data during late morning trading. This manufacturing sector report is similar to last week’s Durable Goods Orders release, but also includes orders for non-durable goods. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn’t expected to cause much change in rates this month. Current forecasts are calling for a decline in new orders of 1.0%.

Friday’s sole report is arguably the single most important report that we see each month. The Labor Department will post May’s Employment data early Friday morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate remain at 9.0% this month with approximately 185,000 jobs added to the economy during the month. A higher than expected unemployment rate and a smaller number than 185,000 in new payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. However, stronger than expected numbers may lead to a spike in rates Friday morning.

Overall, Wednesday or Friday is likely to be the most important day of the week as they bring us the two most important reports on the agenda. If they give us weaker than expected results, we could close the week with lower mortgage rates than Tuesday’s opening levels. However, if we see stronger than expected readings in those two releases, I expect mortgage rates to move higher on the week.

But that is very much dependent on seeing a relatively calm week in stocks. As we have seen the past two weeks, stock market volatility can heavily influence bond trading and mortgage rates and significantly minimize the impact that these economic reports normally have on rates. Accordingly, it would be wise to maintain contact with your mortgage professional if still floating an interest rate.

Six Unobvious Reasons to Recycle

1. Protect your home from hazardous waste. The average American home accumulates up to 20 pounds of hazardous waste each year. Even more frightening, usually 100 pounds of waste is stored in cabinets, the garage, closets, basements, and other storage spaces in the average home.

2. Help the community and local job options by donating to the Goodwill, which collects electronics as well as most other things, to recycle or sell. They use the profits to help fund job training and employment opportunties in the local community.

3. You can hold a recycling event as a fundraiser for one of your favorite causes (a local school, sports league, church, etc.) with the help of http://www.recyclingforcharities.com/

4. According to the Environmental Protection Agency, American households own an average of 24 electronic products that could be potentially donated or recycled. 85% of them end up in landfills instead.

5. Recycling is less expensive than sending trash to a landfill. According to http://www.ecocycle.org/, recycling instead of landfilling saves $55 per ton, saving you money, along with the environmental benefits.

6. Stimulate the economy by creating jobs. Eco-Cycle states that “or every one job at a landfill, there are ten jobs in recycling processing and 25 jobs in recycling-based manufacturers. The recycling industry employees more workers than the auto industry.”

Tagged as: budget, energy, environment, recycling, saving money

An Important Issue Requiring Action

Every day I hear people complaining about how hard it is to get a loan these days with all of the paperwork that needs to be provided to even have a shot at being approved.  I've got news for you; it isn't getting any easier.

Some of you may have heard the phrase, "Dodd-Frank Bill" running amongst the Real Estate profession.  This bill has made a significant impact on Loan Officer compensation, Private money lending and will soon impact even more arenas of Real Estate Lending.

The hottest topic regarding the bill right now is the "Qualified Residential Mortgage" (QRM).  For bullet points on what QRM entails, please visit this link: Dodd-Frank-QRM-April-28-2011 .  The impact of QRM won't just be on Lenders.  It will affect Real Estate Agents, Buyers and Sellers.

REALTORS--I ask that you help take action on this bill.  Once you have made your decision please visit: NAR Realtor Action

Homeowners and Potential Buyers--you can still have your voices heard!  Let our Senators and Congressman know your feelings on the issues.

Congressman Sam Farr: Email
Senator Dianne Feinstein: Email
Senator Barbara Boxer: Email

I felt this issue important enough to share with everyone.  Please share this information with everyone you know.  The more people who participate, the better!

This Week’s Market Commentary

This week brings us the release of five important economic reports in addition to two Treasury auctions that may influence rates. Only two of the five reports are considered to be of fairly high importance to the bond market and mortgage pricing. The remaining reports are considered to be of moderate or low importance and will likely not heavily influence mortgage rates.

April’s New Home Sales data will be released late Tuesday morning. This report gives us a measurement of housing sector strength and future mortgage credit demand. However, it is actually the least important release of the week and probably will not have much of an impact on mortgage pricing because it tracks only approximately 15% of all home sales. It is expected to show little change in sales from March’s level, meaning the new home portion of the housing sector was flat last month.

Wednesday has one of the week’s more important reports scheduled with April’s Durable Goods Orders being posted. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products.

It is currently expected to show a decline in new orders of approximately 2.0%, indicating manufacturing sector weakness. That would be good news for the bond market and mortgage rates, but this data is known to be quite volatile. Therefore, a small variance from forecasts would likely have little impact on mortgage rates Wednesday.

The first of two revisions to the 1st quarter Gross Domestic Product (GDP) will be released at 8:30 AM Thursday. The second revision to this report comes next month but isn’t expected to carry much importance. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best indicator of economic growth. Last month’s preliminary reading revealed a 1.8% increase in the annual rate of growth. Analysts expect a slight upward revision to this reading with the consensus being a 2.0% rate of growth. If the upward revision is much stronger than expected, we may see the bond market react negatively and mortgage rates move higher because it would mean the economy was stronger than thought last quarter.

April’s Personal Income and Outlays data is the first of two reports due Friday. It will be posted at 8:30 AM and gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.4% increase in income and a 0.5% rise in spending. Weaker readings would be considered good news for bonds and mortgage rates.

The second report of the day and the last relevant data of the week will come from the University of Michigan who will update their Index of Consumer Sentiment for May. It is forecasted to show a small increase from this month’s preliminary reading of 72.4. A reading above 72.6 would be considered negative for bonds and mortgage pricing.

Overall, I think we have a fairly busy week ahead of us. The big report of the week is Wednesday’s Durable Goods Orders. If Thursday’s GDP revision varies greatly from forecasts, it can also lead to sizable changes in rates. There are also a couple of Treasury auctions that are worth noting. The 5-year Note sale is Wednesday and the 7-year Note auction will be held Thursday. Both may influence bond trading and possibly mortgage rates if they are met with an exceptional demand or if there is lackluster interest from investors.

The bond market will close early Friday afternoon ahead of next Monday’s Memorial Day holiday. With all this, there is a pretty good possibility of seeing mortgage rates change several times this week- especially if there is more volatility in the stock markets. Accordingly, please proceed extremely cautiously if still floating an interest rate.