Archive for June, 2010
How To Use A Fire Extinguisher In Your Home
June 28th, 2010 categories: Home Safety
In 2006, in the U.S., a person died in an in-home fire every 2 hours, 42 minutes, on average; someone was injured every 32 minutes. Nearly $7 billion of property damage was caused.
In this 2-minute video from Lowe’s, you’ll get a basic education on fire extinguishers:
- How to pick the right fire extinguisher for the right job
- Where to place fire extinguishers in a home
- How to use the “PASS” technique on a fire
Keeping your household safe from fire requires preparation, and part of that preparation is keeping fire extinguishers on-hand, and ready for use. Fire deaths are preventable — make sure your home is properly equipped.
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A Simple Explanation Of The Federal Reserve Statement (June 23, 2010 Edition)
June 24th, 2010 categories: FOMC
Today, in its first meeting in 5 weeks, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged.
The Fed Fund Rate remains within its target range of 0.000-0.250 percent.
In its press release, the FOMC said that, since April, “the economic recovery is proceeding” and that the jobs market “is improving gradually”. Business spending “has risen significantly”, too, with the exception of commercial real estate.
Today’s statement is the 8th straight press release in which the Fed shows optimism for the U.S. economy, dating back to June 2009. Since that time, the Fed has terminated all of the programs it created to support the economy through the economic crisis.
The recession is widely believed to be over.
And, although the Fed’s statement acknowledged economic growth, it did highlight lingering threats, too.
- Employers are still reluctant to hire new workers
- European debt concerns could spill-over to the U.S.
- Bank lending is contracting
Also, as expected, the Fed re-affirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period”, citing that “inflation has trended lower” recently.
Mortgage market reaction has been positive thus far. Mortgage rates in Tennessee are slightly improved post-FOMC.
The FOMC’s next scheduled meeting is August 10, 2010.
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May 2010 Existing Home Sales Is Better Than The Headline Data Suggests
June 24th, 2010 categories: Existing Home Sales, Home Price Index, Home Values, Household Finances, Housing Starts, New Home Sales, Pending Home Sales, Sellers
Existing Home Sales dropped in May for the first time in 3 months but still managed to post its second-highest since November 2009, buoyed by the expiring federal tax credit program.
An “existing home” is a home that cannot be considered new construction; a resale of an existing home. Existing Home Sales fell 2.2 percent in May.
The press is calling the drop in sales “unexpected” and disappointing, but a deeper look at the data shows the news isn’t as bad as it first appears.
First, on a regional basis, sales were mostly solid. Only the Northeast region posted a loss. The West even managed a gain.
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Making A Mortgage Rate Strategy Ahead Of The Fed’s Meeting This Week
June 22nd, 2010 categories: FOMC
The Federal Open Market Committee begins a 2-day meeting today, its fourth scheduled meeting of the year, and fifth overall.
The FOMC is the monetary policy-setting part of the government and its primary tool for that purpose is the Fed Funds Rate.
The Fed Funds Rate is the dictated rate at which banks borrow money from each other and, since December 16, 2008, the Federal Reserve has voted to keep the benchmark rate within a target range of 0.000-0.250 percent.
This is the lowest Fed Funds Rate in history. A rate near zero-point-zero percent renders borrowing by business and consumers cheap which, in turn, promotes investment and growth.
There’s no expectation for the Fed to change the Fed Funds Rate after it adjourns tomorrow, but that doesn’t mean consumers in Maryville should expect mortgage rates to remain unchanged, too.
To the contrary, mortgage rates tend to be volatile when the FOMC is meeting. This is because the FOMC issues a press release after each meeting and in that press release, it comments on the economy’s unique threats, strengths and weaknesses.
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The Largest Historic Homes In The United States
June 21st, 2010 categories: Interesting Homes
In 2009, the median size of new homes started was roughly 2,100 square feet. This figure was down from 2,200 square feet between 2005-2007 which, itself, was down from 2,350 in 2004.
Homes are getting smaller across the United States.
But, as compared to the nation’s largest homes, the shrinking is laughable. The Biltmore Estate, built in 1895 by George Washington Vanderbilt II, measures 175,000 square feet — 83 times the size of a typical home today.
The Biltmore Estate in Asheville, North Carolina is the largest home in the country and, meanwhile, another Vanderbilt-built property built in 1895 checks in at number two. The Breakers, in Newport, Rhode Island, measures 165,000 square feet and cost $150 million to build in today’s dollars, adjusted for inflation.
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The Home Buyer Tax Credit Extension Has Not Been Passed Into Law (Yet)
June 18th, 2010 categories: Tax Tips
As its June 30, 2010 closing deadline approaches, the federal home buyer tax credit is back in the news.
Unfortunately, the headlines are misleading.
Contrary to what you may have read (or heard), the federal home buyer tax credit has not been extended past June 30, 2010. At least not yet. And here’s why there’s confusion.
Look at these headlines from earlier this week:
- Senate Extends Date On Home-Buying Tax Credit (Philadelphia Inquirer)
- U.S. Senate Approves Extension Of Home Buyer Tax Credit (NASDAQ)
- Senate Approves Home Tax Credit Extension (Reuters)
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Loan Application Alert : Conforming, Interest Only Mortgages Guidelines Change Next Week
June 17th, 2010 categories: Buyers, FHA Mortgages, Household Finances, Market Trends, Mortgage Guidelines, Mortgage Rates
If you plan to finance your Farragut home with a conforming interest only mortgage, get your loan application submitted no later than this Friday, June 18.
Starting next week, Fannie Mae is clamping down on the popular loan product.
An “interest only” mortgage is exactly what its name implies — a mortgage for which the monthly payments consist entirely of interest with no principal reduction. Because there’s no amortization, payments are less costly on a month-to-month basis.
For example, assuming principal + interest payments at 5 percent, a $250,000 mortgage carries a monthly payment of $1,342. The payment on a comparable interest only mortgage, however, drops to $1,042.
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Good News For Sellers : Housing Starts Fall To 1-Year Low In May 2010
June 17th, 2010 categories: Buyers, Existing Home Sales, FHA Mortgages, Home Values, Housing Starts, Market Trends, Sellers
Single-family housing starts plummeted to a one-year low in May, just 30 days after soaring to a 20-month high. It’s no wonder home builders are confused.
Against a revised April figure, Housing Starts fell 97,000 units in May, a figure representing almost one-fifth of the total market size.
It’s the worst showing for Housing Starts since May 2009, a surprise to builders and economists alike.
Furthermore, single-family Building Permits plunged in May, too — down 10 percent from April. A permit is a certification from local government that authorizes home construction.
Housing permits are a precursor to Housing Starts with 82% of homes starting construction within 60 days of permit-issuance. Fewer permits, therefore, directly reduces the number of new homes coming to market in the coming months.
For home buyers in Knoxville , this should create a sense of urgency.
Home prices are based on supply and demand and supply appears to be falling about the same time that economists predict a surge in home demand. It could spell rising home prices and a complete loss of negotiation power with home sellers.
For now, though, home affordability remains high with properties cheap and mortgage rates near all-time lows. If you plan to buy a home later this year, the May 2010 Housing Starts data may be a reason to move up your timeframe a bit.
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FHA Mortgage Insurance Premiums Approved To Triple In Cost
June 17th, 2010 categories: Buyers, FHA Mortgages, Home Values, Household Finances, Market Trends, Mortgage Guidelines, Mortgage Rates
Starting sometime later this year, the monthly cost to carry an FHA-insured mortgage is expected to rise.
In a near-unanimous vote, the House of Representatives gave the FHA power to raise the monthly mortgage insurance premiums it charges to its borrowers.
Currently, monthly mortgage insurance premiums are 0.55% of the unpaid loan balance, divided by 12. The recently approved Federal Housing Administration Reform Act provides for an increase in monthly premium of up to 1.55 percent, among other details of the bill.
Despite the ability to charge 1.55 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.
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Shopping And Paying Bills Online? Here’s Methods To Protect Your Online Financial Identity
June 17th, 2010 categories: Household Finances
In May 2010, Retail Sales at non-store retailers — a category that includes Amazon and eBay — topped $29 billion, up 16 percent from May 2009. Clearly, Americans are doing an increasing amount of shopping online. And we’re paying our bills online, too.
But how well are we protecting our identities?
In this 5-minute piece from NBC’s The Today Show, you’ll learn the basics of online fraud and methods to minimize the likelihood of identity theft. Furthermore, the tips go beyond the basic “choose a challenging password”. For example, you’ll hear about:
- Why you shouldn’t pay bills from a coffee shop
- Who might be hiding behind an unprotected public wifi network
- The dangers of storing credit card numbers with an online retailer
And, although, at one point, the interviewee goes over the top with respect to spyware and anti-phishing prevention, the point being made is a good one — you can’t be too careful with your online financials and common sense goes a long way.
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