Happy Boxing Day

We hope you received everything you wanted for Christmas.  Today is Boxing Day.  The joke currently is it’s the day when you box everything up you don’t want and take it back to the store.  In reality, Boxing Day is traditionally when  servants and tradesmen would receive gifts from their superiors.  It’s unknown when it first started, but there is evidence that dates it back to the middle ages.  Since the servants would have to wait upon their masters on Christmas Day, they were given the 26th off to visit family.

Historians suspect it goes back to Roman times when people would put coins, food, and clothing in metal boxes outside of churches for the Feast of St. Stephen.  We sing about the Feast of St. Stephen in the carol Good King Wenceslas who was a king in Czech from 907-935.

Christmas Wrappings

You’ve probably gathered up all of the ribbons and bows and wrapping paper.  But did you know:

• Average number of presents wrapped by an adult each holiday season: 15
• Wrapping paper and shopping bags thrown away each holiday season: 4 million tons
• Annual sales for the gift wrap industry: $2.6 billion (ok, we have birthdays too)
• Christmas cards soled each year in the U.S.: 2.65 billion (and if you stacked them all up, it would be 10 stories tall)
• In one survey, 53% said that they’ve saved and re-used wrapping paper. (obviously not the stuff opened by small children in a frenzy)
• Amount of ribbon thrown away each year: 38,000 miles (enough to tie a bow around the Earth)

 

Other Trivia

• 12.9 million fake trees were purchased in 2011 at an average cost of $78.  The average lifespan of an artificial tree is 10 years.
• 21.6 million real trees were purchased in 2011 at an average cost of $46.
• So if you bought a fake tree, by year 3, you’ve gotten back your investment.  For some, like those with allergies, fake is the only way to go.  For others, real trees are the only choice.  16% of those people prefer to cut their own tree.
• And it’s a real mood booster no matter which way because 87% of Americans say that Christmas decorating makes them happy, and in 2011, 71% of U.S. households decorated for Christmas.

And you can have a lot of (cheap) fun driving around local neighborhoods in the evening and admiring the colorful displays.  Did your neighborhood put up lights this year?

This Week’s Market Commentary

This week brings us the release of five economic reports that are considered relevant to mortgage rates, but only four of them are of concern. In addition to them, we also have the year’s last FOMC meeting and other related Fed events and two Treasury auctions that have the potential to influence mortgage pricing. The biggest news comes the middle and late days of the week, so we should see more movement in rates as the week progresses.

There is nothing of relevance scheduled for today. This means we can expect the stock markets to drive bond trading and mortgage rates again. If the major stock indexes open the week with gains this morning, bonds may move lower, pushing mortgage rates higher. But a weak open in stocks could lead to slightly lower mortgage rates today. We could also see traders position themselves ahead of the week’s agenda, so even though there is nothing concerning on the calendar, we could see mortgage rates change.

October’s Goods and Services Trade Balance report will be posted early Tuesday morning. This report gives us the size of the U.S. trade deficit, but it is considered to be of low importance to mortgage rates. It is actually the week’s least important monthly report. It is expected to show a $42.7 billion trade deficit, which would be an increase from September. Unless it varies greatly from forecasts, I don’t expect this data to affect mortgage pricing Tuesday.

Wednesday has no important economic data scheduled for release but it does have the 12:30 PM adjournment of the FOMC meeting that began Tuesday. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting, but traders and analysts are anxious to get the Fed’s current economic forecasts. Also worth noting is that the meeting is ending earlier than the traditional 2:15 PM because it is one of the meetings that will be followed by a press conference hosted by Fed Chairman Bernanke. The meeting will adjourn at 12:30 PM, forecasts will be posted at 2:00 PM and the press conference will begin at 2:15 PM. It is fairly safe to assume that all of that will lead to afternoon volatility in the markets and mortgage rates Wednesday.

There are Treasury auctions scheduled for several days this week, but the two important ones are the 10-year Note sale Wednesday and the 30-year Bond sale Thursday. Wednesday’s auction is the more important of the two and will likely have a bigger influence on mortgage rates. Results of Wednesday’s sale will be posted at 11:30 AM ET due to the FOMC events while Thursday’s will be at the usual 1:00 PM. If they were met with a strong demand from investors, particularly international buyers, we should see strength in bonds and improvements to mortgage pricing those days shortly after. On the other hand, a weak interest in the auctions could lead to upward revisions to mortgage rates.

Thursday has two important economic reports scheduled for release, both at 8:30 AM ET. November’s Retail Sales report is one of them. This report will give us a key measurement of consumer spending by tracking sales at retail level establishments. This data is highly important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rapidly rising consumer spending raises the possibility of seeing solid economic growth. Since long-term securities such as mortgage bonds are usually more appealing to investors during weaker economic conditions, a large increase in retail sales will likely drive bond prices lower and mortgage rates higher Thursday. Current forecasts are calling for an increase of 0.4% in November’s sales.

November’s Producer Price Index (PPI) will also be posted early Thursday morning. It measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices, giving a more stable reading for analysts to consider. If Thursday’s release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond well and mortgage rates should fall. Current forecasts are showing a 0.5% decline in the overall index and a 0.1% rise in the core data.

Friday has more highly important data when November’s Consumer Price Index (CPI) is posted at 8:30 AM ET. It is similar to Thursday’s Producer Price Index, except it tracks inflationary pressures at the more important consumer level of the economy. Current forecasts call for a decline of 0.2% in the overall index and a 0.1% rise in the core data reading. This data is one of the most watched inflation indexes, which is extremely important to long-term securities such as mortgage related bonds. Rising inflation erodes the value of a bond’s future fixed interest payments, making them less appealing to investors. That translates into falling bond prices and rising mortgage rates. Therefore, weak readings would be favorable for the bond market and mortgage shoppers.

The week closes with November’s Industrial Production mid-morning Friday. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting it to show a 0.4% increase in output, indicating modest manufacturing growth. A smaller than expected rise would be good news for bonds, while a stronger reading may result in slightly higher mortgage pricing. However, the CPI release is much more important to the markets than this data.

Overall, there is a high probability that we will see an active week in the financial and mortgage markets. Wednesday will probably be the most important day due mostly to the Fed events, but Thursday has two very important economic reports so we may see plenty of volatility that day also. Monday is an easy choice for least important, however, we could still see an extension of Friday’s trading affect mortgage rates Monday also. I still believe we are due for a stock pullback that will cause a flight-to-safety in bonds, hence the optimistic approach towards interest rates. On the other hand, with so much on tap this week and a strong likelihood of several active days in the markets, it is strongly recommended that you maintain contact with your mortgage professional if still floating an interest rate.

Are You Ready for Black Friday?

With businesses like WalMart, Target and Toys R Us announcing that they will open on Thanksgiving Day, the lines of Black Friday shopping have blurred into the Thanksgiving holiday. Amazon has announced that they will be providing Black Friday style savings that started last week and will continue on.

Some families are turning it into a tradition of eating early, napping, and then going shopping for the best deals.  For some, it’s a way of making their limited budget go farther.

Some stores hold items back and then have a large unveiling for Black Friday.  It’s still a good idea to scope out the stores, where they have merchandise, and create your plan.
So in today’s blog, we’re going to provide some resources so you can make your plan whether it’s online, or waiting in line.

BFADS

The granddaddy of all sites is bfads.net.  It was founded by a CalPoly student who would get ahold of Black Friday circulars before they were made available, and he would post them on his site.  In the beginning, companies would hit him with a cease and desist order, but over time, they realized that it was a great way to get people excited about shopping, and now, he provides the circulars starting November 1st.

 Other Resources

• blackfriday.com
• blackfriday.fm

And you can also find out more about deals on the websites of the businesses you’re interested in.

Things to Remember

• Create your list of who you’re buying for.  If it’s clothing, make sure you have their sizes and color preferences as items may not be returnable.  It could be exchange only.  And if it is returnable, it will only be for the amount you paid.
• See if you can shorten your list.  Talk with your friends about exchanging cookies or letters of how much you appreciate one another.
• Decide on your budget and be firm on it.  It’s easy to get caught up in the moment of what appears to be a great deal, but you don’t want the credit card hangover in January.
• Consider bringing only one credit card or the cash in your budget.
• If you bring someone else, help each other to stay on target.
• Make sure you budget something for yourself.   After all, you’re the one out there.
• Be safe.  If there’s a donnybrook over the last Giggle Me Something Doll, you really don’t want to be a part of it.  Better to wait and pay a bit more later then pay for medical bills now.  And watch out for crowds that surge. You don’t want to fall down and get stepped on.
• There will always be jerks.  Remember to breathe and don’t lower yourself to their level.
• Bring water to stay hydrated.
• Wear comfortable shoes.

And don’t forget to plan in Cyber Monday when companies have additional sales!
Do you save up to buy something major during black friday?  Or do you just do your holiday shopping?  Or do you stay home and enjoy the quiet day?

How Long Should Your Close Be?

Your offer is almost accepted.  Now you and your Realtor® are working with the seller and their Realtor® on the terms of the close.  How long should it be?

 What is a "Close"?

When people talk about the close of a home sale, they are referring to the close of escrow when all the terms of the purchase contract have been met, the seller deposits the deed, and the buyer deposits the funds.  Some conditions (and yours will vary based upon your location…even in the same state) you will probably need to meet (from About.com Home Buying/Selling)

• Fully executed purchase agreement and addendums.
• Deposit of earnest money deposit.
• Home inspection or waiver.
• Fulfillment of seller obligations such as submission of pest inspection report and / or completion, roof certification, home warranty, preliminary title policy, beneficiary demand receipt, repairs, if any, according to the Request for Repairs.
• Completion of buyer inspections, including release of contingencies, if demanded.
• Buyer’s final walk-through inspection or waiver.
• Appraisal of property by lender’s appraiser.
• Lender’s loan approval and satisfaction of loan conditions by buyer such as depositing evidence of a homeowner insurance policy.
• Seller’s and Buyer’s signed escrow instructions.
• Seller’s signed and notarized deed conveying title.
• Buyer’s signed and notarized deed of trust and executed promissory note.
• Buyer’s signatures on all loan documents.
• Deposit of buyer’s funds from lender.
• Deposit of balance of buyer’s down payment and buyer’s closing costs.

Seller Usually Goes First

Usually, the seller will request a close that is best for them.  It could be long if they need to find another house, or if they want their children to finish out a school term.  Or it could be short because they’ve already moved and want their cash.
One buyer had a set date in the offer for a birthday as the final close.  The seller countered with a sooner date that happened to be his birthday.

Brand New Homes

But what if you’re purchasing a brand new house?  You should work closely with the builders as to their schedule.  If you want to move in sooner, they might have the flexibility to adjust the schedule of which houses they complete when.
Additionally, do your research and find out if the builder is known for completing on time.  If they aren’t, you may want to put in a clause where they pay for your rent for each full month past the agreed upon date.

Other Considerations

You will also need to have enough time for appraisers and inspectors.  If they’re busy, it could delay your final settlement.
Buyers with pre-approval will be able to close much sooner than buyers who are not.  If many people are going for mortgages at the same time, it may not only delay you locking in an optimal rate, but it could also delay your taking possession of the house.  The underwriters will need to process the paperwork and review the appraisal, and this can sometimes take a week or two.  If a document is missing from the file such as a title clearance, it could delay the close.
Other things that can go wrong (also from About.com Home buying/selling)

• Low appraisal or the underwriter orders a review appraisal that does not match the first appraisal.
• Additional debt found on the buyer’s updated credit report.
• Mistakes noted in the buyer’s credit report.
• New liens or judgments filed against the buyer or seller upon title update.
• Clouds on title.
• Marital status change for buyer or seller.
• Required updated bank statements or financial documents.
• Insurance information missing.
• Expired loan or program commitment.

Bottom line is that pre-approval will help.  And work with your Realtor® as to when the close of escrow is best for you, and how flexible you can be.

 

What to Do With Leftover Halloween Candy

We hope you had a happy and safe Halloween.  Whether you passed out candy and have extras, or your kids got too much (or even want to get rid of the stuff they don’t like), here are some ideas for getting through that mountain of sugar.

Donate It

Halloween Candy Buy Back works with dentists and Operation Gratitude. You can go to the website and look for participating dentists near you. Some dentists are offering prizes, or money in exchange for the candy. You can also send your candy directly to:

OPERATION GRATITUDE/ CA ARMY NATIONAL GUARD
17330 VICTORY BLVD.
VAN NUYS, CA 91406
ATTN: RICH HERNANDEZ / 262-674-7281

Check your local newspaper, television or radio station for other local donation spots.

Exchange It

Some dentists are offering coupons or cash in exchange for your candy. They then donate the candy to Operation Gratitude.

You can look online at Halloween Candy Buy Back or check the websites for your local newspaper, television or radio station for participating dentists.

Create With It

Parenting Magazine
JournalStar Ideas

Freeze It

Put hard candies or fruity sweets like Starburst into tightly sealed bags. Chocolate freezes very well, and is a great treat for your brown bag lunches. Plus you wont need to use an ice pack to keep your beverage cool.

But do be careful if you eat the candy from the freezer. Let it thaw a little bit otherwise you might crack a tooth.

Bake With It

Chopped or crushed, they add a great flavor to brownies and cookes…even cake batter. Use skittles and other small colored candy to decorate cakes and cupcakes.

Drink (or Eat) It

Add it to a milkshake like the ice cream chains do, only save the money by making it yourself. Some blenders can handle chopping up the candy like Butterfinger or Reece’s Peanut Butter Cups, and some can’t and you may need to chop it up a little before blending. And while it’s not drinking, you can also use candy as an ice cream topping. If you’re really adventurous, you could thaw the ice cream out a little and smoosh in the candy, and then pop it back into the freezer.

Play With It

Have a science experiment afternoon where you try out different things with the candy. Microwave it and see if it melts. Create a mentos geyser with a bottle of diet Coke. Find more ideas here

So what will you be doing with your candy?

This Week’s Mortgage Commentary

This week has an active agenda with seven economic reports scheduled for release that have the potential to influence mortgage rates. There is at least one relevant report scheduled each day this week, making it likely to be an active one for the financial and mortgage markets.

The first release of the week will came today at 8:30 AM ET when September’s Personal Income and Outlays report will be posted. This data gives us an indication of consumer ability to spend and current spending habits. It is important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is bad news for the bond market and mortgage rates because it raises inflation concerns, making long-term securities such as mortgage related bonds less attractive to investors. Analysts are expecting to see a 0.6% increase in income and a 0.4% rise in spending. Smaller than expected increases in both readings would be good news for the bond market and mortgage pricing.

October’s Consumer Confidence Index (CCI) is Tuesday’s only news. This Conference Board index will be released at 10:00 AM ET Tuesday. It gives us a measurement of consumer willingness to spend and is expected to show a small increase in confidence from last month’s 70.3 reading. That would mean that consumers felt a little better about their own financial situations than last month, indicating they are more likely to make large purchases in the near future. As long as the reading doesn’t exceed the forecasted 72.5, we will likely see the bond market react favorably to this report. This data is watched closely because it is related to consumer spending.

The 3rd Quarter Employment Cost Index (ECI) will be released at 8:30 AM ET on Wednesday. This data tracks employer costs for salaries and benefits, giving us an indication of wage inflation pressures. Rapidly rising costs raises wage inflation concerns and may hurt bond prices. It is expected to show an increase in costs of 0.5%. A smaller than expected increase would be good news for mortgage rates, but this is not one of the more important reports of the week. Therefore, it will likely take a large variance from forecasts for this report of have a noticeable influence on mortgage pricing.

Thursday has two relevant economic reports scheduled for release. The first is the 3rd Quarter Productivity reading at 8:30 AM ET. It is expected to show a 1.6% increase in worker productivity during the third quarter. A larger increase would be good news for the bond market because higher levels of employee productivity allow the economy to expand without inflationary pressures being a concern.

The key data of the day and one of the two highly important reports of the week will be the Institute for Supply Management’s (ISM) manufacturing index at 10:00 AM ET Thursday. This index measures manufacturer sentiment, which is important because it gives us an indication of manufacturing sector strength. It is considered to be one of the more important reports we see each month, partly because it is the first report every month that tracks the preceding month’s activity. Thursday’s release is expected to show a reading of 51.0, indicating that manufacturer sentiment slipped from September’s level. This means fewer surveyed business executives felt business improved during the month than in September, hinting at manufacturing sector weakness. A smaller than expected reading would be good news for bonds and mortgage rates, especially if it falls below the benchmark 50.0.

Friday brings us the release of two pieces of economic data, one of which is arguably the single most important monthly report. The Labor Department will post October’s Employment report early Friday morning. This report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for the unemployment rate to move higher by 0.1% to 7.9%, an increase in payrolls of approximately 125,000 and a 0.2% increase in average earnings. Weaker than expected readings should renew concerns about the labor market and rally bonds enough to improve mortgage rates, especially if the stock markets react poorly to the news. On the other hand, if the report indicates employment sector strength, we could see mortgage rates spike higher Friday morning.

The second report of the day will be September’s Factory Orders data. This report is similar to last week’s Durable Goods Orders release except it includes orders for both durable and non-durable goods. It is expected to show a 4.5% increase in new orders from August’s level. A smaller than forecasted increase would be good news for the bond market and mortgage rates while a larger than expected rise is bad news and could contribute to higher mortgage pricing since it would indicate economic strength. It is worth noting though, that the Employment report is much more important to the financial and mortgage markets than this data is.

Overall, the single most important day is likely to be Thursday or Friday. In addition to the economic reports, I believe stocks will experience volatility that will also impact bond trading. The key to the week will be Friday’s employment numbers, but any significant swings in the stock markets may also influence whether mortgage rates close the week higher or lower than Monday morning’s levels.

This Week’s Market Commentary

This week brings us the release of six economic reports for the markets to digest. Unlike last week, the most important events are scheduled for the first part of the week while the latter part is much lighter. However, due to stock earnings along with the week’s economic news, we could see mortgage rates move several days with a decent possibility of seeing an intra-day revision or two.

The week kicks off with the release of an extremely important piece of economic data early Monday morning. September’s Retail Sales report that measures consumer spending will be posted at 8:30 AM ET Monday. This data is very important to the markets because consumer spending makes up over two-thirds of the U.S. economy. Therefore, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop Monday. However, stronger than expected sales would fuel optimism about the economy and would likely lead to a stock rally that hurts bonds prices and pushes mortgage rates higher. Current forecasts are calling for a 0.7% increase in sales. Good news for the bond market and mortgage pricing would be a much smaller increase.

Tuesday has two reports scheduled that may influence mortgage rates. The first is September’s Consumer Price Index (CPI) at 8:30 AM ET. It measures inflationary pressures at the very important consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.5% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

The second report of the day will be September’s Industrial Production data at 9:15 AM ET, giving us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.2% increase in output from August’s level, meaning that manufacturing activity rose slightly. A larger than expected increase in production would be negative for bonds and mortgage rates as it would indicate economic strength. A decline in output would be favorable for the bond market and mortgage rates, but the CPI is much more influential to the markets than this report is and will be the focus of trading Tuesday morning.

September’s Housing Starts is Wednesday’s only release, coming at 8:30 AM ET. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand by tracking construction starts of new homes, but is usually considered to be of low importance to the financial and mortgage markets. It is expected to show an increase in new home starts between August and September. I believe we need to see a significant surprise in this data for it to have an impact on mortgage rates Wednesday.

Thursday also has only a single monthly report scheduled for release with September’s Leading Economic Indicators (LEI) at 10:00 AM ET. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.2% from August’s reading. This would indicate that economic activity is likely to increase slightly over the next couple of months. That would be relatively bad news for the bond market and mortgage rates, but this report is considered to be only moderately important. Therefore, a small increase would not be of much concern to the bond and mortgage markets. Ideally, we would like to see a decline in the index.

The National Association of Realtors will release September’s Existing Home Sales data late Friday morning. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a decline in sales from August to September, meaning the housing sector remained soft. That would be favorable news for the bond market since a weak housing sector makes a broader economic recovery less likely.

Overall, it appears that Monday or Tuesday are the likely candidates for the most important day of the week. In addition to the economic data, there are many companies posting earning reports during the week, including some big names such as Citigroup, IBM and Intel. If the corporate earnings releases are generally weaker than forecasts, stocks may suffer, making bonds more appealing to investors. The end result would likely be an improvement in rates. The flip side though is stronger than expected earnings that drive stocks higher, pushing bond prices lower and mortgage rates upward. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.

Storing your outdoor items for Winter

Today we have part 2 of our 4 part series on preparing your home for Winter.

Here in Northern California, we can get some pretty strong winds with our rain. To take good care of our patio furniture and our barbecues, we need to prepare and to store them properly so we don’t have to buy new furniture and grills in the Spring.

Barbecues and Grills

We won’t get into the debate over gas versus charcoal (or smokers, for that matter). We’ll save that for the Spring. Whatever you have, let’s get it safe and secure before the big Northern California rains in November.

If you have a portable charcoal kettle or gas grill, you may want to find room in your garage or car port to store it over the winter where it will be protected from rust. If you live in an apartment and have covered parking, you might be able to fit yours in between the wall and where your car bumper normally stops.
Don’t use it here, though, as there’s a potential for fire or carbon monoxide poisoning.

To prepare your portable grill:

1. Clean completely. Get some oven cleaner and really spray down the grill part. While it’s doing its job, clean out any ash if charcoal, or clean the burners if you have gas. Throw out lava rocks for a gas grill and plan to buying new ones in the Spring. Grease can get stuck in the rocks which you’re never going to get cleaned out. And clean rocks reduce flare ups which provides a better flavor. Hose off the grill, and enjoy it’s bright shiny look.
2. Dry your grill completely to ensure there’s no rust. If there is rust, use steel wool or a wire brush to get it off, and then look if you need to re-coat the surface. You can polish the surface with a simple paste of baking soda and water.
3. Repair anything needing repairing. Nothing is worse then the first sunny day in April, pulling out the grill, and finding out that you needed to fix a burner.
4. Detach propane tanks if you have a gas grill. Make certain to store them safely in an upright position.
5. Read your manual to see if the manufacturer recommends anything specifically. If you can’t find your manual, many companies now put them online. Usually you can find this in Support.

Now put your grill buddy in a safe place. As we mentioned, if it can fit in the garage or carport, that’s the best place. If you can’t, look for an area where there’s an overhang to protect it as much as possible. And invest in a good cover. Make sure you tie down the cover so it doesn’t blow away.

If you have a built in grill, or a large island grill, barbecue or smoker, spend just as much time cleaning, reviewing your manual, and use the covers.

Some of you are able to grill almost all year round (Carmel, Monterey, Silicon Valley…). That doesn’t mean you can get out of doing a little cleaning and maintenance twice a year. Your grill will be so happy if you do. Leave a note in the comments where you are and if you can grill, barbecue or smoke all year.

Patio furniture

Some people have sheds for their patio furniture since they don’t want to spare the room in their garage. If you invested good money in chairs, tables, heaters, canopies and outdoor fireplaces, you will want to take care of them for the long term. Similar to grills, the steps are:

1. Clean off the pillows and umbrellas. Then store indoors. Some people like to put the pillows into large garbage bags to prevent dust from accumulating.
2. Clean all the dirt and grime off of the furniture. If you have wood furniture, consider using some wood soap, or a coating of water sealant.
3. Inspect for any repairs needed on all the parts. If you need a new cord on your umbrellas, order them now so you can repair it before you put it away.
4. Stack lightweight chairs on top of one another. If you can store them indoors like a garage, carport or shed, that’s your best bet. Otherwise the additional weight will keep them in place if a strong wind storm starts to blow. Find a cover to go over them to protect the chairs from the elements.
5. Store lightweight tables indoors. Again if this is not possible, put a cover over, and try to store in an overhang or an area where the wind won’t blow the stacks over.
6. Tie down all covers so they don’t blow away.

No matter how you store your outdoor items, make sure you keep your eyes peeled for spiders when you pull them out in the Spring.

When will you hold your final outdoor party before you put everything away for the season?

Fall Maintenance from Top to Bottom

Now that we’ve passed the Autumnal Equinox, it’s time to start thinking about preparing you home for the winter. We’re going to post a four part series focusing on:

1. Cleaning your gutters and checking the foundation
2. Storing your outdoor furniture and bbq
3. Preparing your plants and sprinklers
4. Keeping your heating happy and running strong all winter long

Clean your gutters

You might think you should wait to clean your gutters until after all of the leaves have fallen. However, you’re better off cleaning them a few times during the autumn season to prevent major blockages in the downspouts, as well as ensuring that there is no damage to the gutters caused by falling branches.

You should be able to use a good ladder for single story, but you’ll need a really tall ladder and a good friend to spot you if you’re going up higher than that. When you’re up on the roof, look for loose shingles, and look for cracks in the masonry around your fireplace.

As you’re cleaning, look for cracks and rust in the gutters that should be repaired or even replaced.
Finally use a hose to clear debris from the downspouts. To make maintenance faster and easier, consider investing in leaf guards for your gutters to reduce the leaves that get stuck.

Lowe’s has a wonderful article here with graphics to show you where to look for rust points.

Their advice for cleaning gutters is:
You may encounter stubborn, caked buildups. If so, they may be more easily removed a little while after a rain when they are damp instead of dry and hard. Of course, you can always create your own rain with a water hose, but resist the urge to clean your gutters with water pressure. It seems like it would be so easy, but you might pack debris tightly into the downspouts, and dirty water might splash all over your house.

Inspect your gutters as you clean. Look for corrosion, holes, leaking joints or loose, missing or bent hangers. Mark problem areas with masking tape so you can find the problem spots quickly when you are ready to do the repairs.

Wear gloves to protect yourself from scratches, and have handy a garden trowel or gutter scoop, a whisk broom and a rag. Put your tools in a bucket with a handle. The bucket should be fastened to your ladder with a wire hook. This will prevent you from having to juggle a lot of tools while climbing or descending the ladder. It will also remove the temptation of stuffing tools into your pockets – a hazard if you should happen to fall.

It is a good idea to flush your gutters with a garden hose after you have cleaned them. This will show how well the gutters are draining and will indicate any areas that are holding standing water, which contributes to many gutter problems.

The article further discusses what to use to repair your gutters and prevent damage from leaves and branches.

Check Foundations

Take some time on a clear, sunny day to walk around your home looking carefully around the edges.
. Rake away all debris and edible vegetation from the foundation.
. Seal up entry points to keep small animals from crawling under the house.
. Tuckpoint or seal foundation cracks. Mice can slip through space as thin as a dime.
. Inspect sill plates for dry rot or pest infestation.
. Secure crawlspace entrances.

Steel wool is highly recommended for plugging up holes against rats and mice
You’ve paid a lot of money for your home, and doing the right things at the right time will protect that investment for years to come.

This Week’s Market Commentary

This week brings us the release of six relevant economic reports that may influence mortgage rates in addition to two Treasury auctions and an afternoon of FOMC events. Several of the economic reports and the FOMC stuff are all 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 several days. There is no relevant news scheduled to be posted Monday, so look for the stock markets to be the biggest force behind bond trading and changes to mortgage pricing until we get to the middle part of the week.

The week’s first event is July’s Goods and Services Trade Balance data early Tuesday morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $44.0 billion, which would be an increase from June’s $42.9 billion. However, I would consider this the least important of this week’s events, meaning it will likely have little impact on bond trading or mortgage rates unless it varies greatly from forecasts.

There are two Treasury auctions this week that have the potential to influence mortgage rates. The first is Wednesday’s 10-year Treasury Note auction, which will be followed by a 30-year Bond auction Thursday. 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 that 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 Wednesday’s sale will be posted at 1:00 PM ET while Thursday’s results are set for 11:30 AM ET due to other events scheduled that day. If demand was strong, particularly from international investors, we should see mortgage rates improve during afternoon trading Wednesday. However, due to the magnitude of Thursday’s Fed events, that day’s auction will likely have little impact on the bond market and mortgage rates.

One of the week’s two important inflation readings is the only economic report scheduled for release Thursday morning. The Labor Department will post August’s Producer Price Index (PPI) at 8:30 AM ET, 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 a 1.2% increase 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’s Fed events start with the 12:30 PM adjournment of the FOMC meeting that began Wednesday. It is widely expected that Mr. Bernanke and company will not change key short-term interest rates at this meeting, but there is a great deal of hope in the market that we are getting closer to another move by the Fed such as QE3. Friday’s Employment numbers helped bolster the calls for Fed action. I believe that an announcement of a bond buying program should rally not only stocks but also bonds and mortgage rates because those are the securities that the Fed will purchase in the QE program. On the other hand, the lack of at least a strong indication that QE3 is coming soon will probably lead to selling in the markets and an upward revision to mortgage rates.

Also worth noting is that the FOMC meeting is ending earlier than the traditional 2:15 PM because it is one of the meetings that will be followed by a press conference with Fed Chairman Bernanke. The meeting will adjourn at 12:30 PM while the press conference will begin at 2:15 PM and will probably lead to afternoon volatility in the markets and mortgage rates Thursday. The Fed will also update their economic and monetary policy projections right before the press conference begins. They are expected to be posted at 2:00 PM ET. Any significant revisions to the Fed’s outlook on unemployment, GDP growth or their timetable for keeping key rates at current levels will also cause volatility in the markets and mortgage rates.

Friday has the remaining four pieces of economic data with two of them considered to be major releases. Those highly important reports are August’s Retail Sales and Consumer Price Index (CPI) will both be posted at 8:30 AM. The sales report will give us a very important measurement of consumer spending, which is extremely relevant to the markets because it makes up over two-thirds of the U.S. economy. Current forecasts are calling for a 0.7% increase in sales. Analysts are also calling for a 0.8% 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.

The Consumer Price Index (CPI) is also 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 0.6% 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 signal rising inflation and would likely lead to higher mortgage rates Friday morning.

August’s Industrial Production data will be posted mid-morning Friday. 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 a 0.2% decline from July’s level of output. A sizable increase could lead to slightly higher mortgage rates, while a weaker than expected figure would indicate a softer than thought manufacturing sector and would be considered good news for bonds and mortgage rates. However, the CPI and Retail Sales reports are the key data of the day and will likely influence mortgage pricing much more than the production report 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 consumer confidence in their own financial situation is rising is rising, they are more apt to make large purchases. But, if they are growing more concerned about their job security or finances, 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 73.3, which would mean confidence slipped from August’s level of 74.3. That would be considered favorable news for bonds and mortgage rates because waning consumer spending indicates slower economic growth.

Overall, I think we need to label Thursday as the most important day of the week with the PPI and Fed events scheduled. However, Friday has some very important economic data set for release and also has the potential to heavily influence bond trading and mortgage rates. Monday 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. I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate, especially the latter part of the week.

Decisions When Replacing a Roof

The National Roofing Contractors Association says if you’ve already fixed a few leaks and replaced missing shingles in recent years, it’s probably time to put on a new roof. If the shingles are bare, curling, cracking or mossy, start now.

Get estimates, check references
Since you’ll be spending $5,000 to $10,000 or more, be sure to hire the right person or company. Get three estimates and check references.
Have the roofer agree to remove only as much roofing at one time as he can replace during that day.

What about tear-off?
If you already have two or three layers of old roofing, building codes require you to strip them off, adding $1,000 or more to the job. If a single layer has been on the roof for many years, it can be worth what it costs to remove it so the roofer can repair decking and worn flashing.
A rubber membrane called ice and water shield can be installed to prevent leaks when gutters freeze up.

Rent a dumpster
Unless you want the labor and expense of covering the entire area around your home with tarps and plywood, you’ll need a roll-off dumpster. As a rule of thumb, 8-10 squares of shingles weigh about 1 ton. Shingles from a single residential roof will fit in a 10 cubic yard roll-off dumpster.
As the roofer tears off shingles, the old decking and nails, they all go to a dumpster beside the house.

Selecting shingles
You’ll pay more for 50-year shingles than for 25-year, but they last longer. Architectural shingles cost a little more, but they add beauty to any building, say advisors at Money magazine.

New Neighborhoods Spring Up in Old Locations

The housing industry is rethinking the types of homes they want to build and where to build them.

In cities, old industrial buildings and deserted warehouses are being torn down to make way for new housing.

Young Millennials and older Baby Boomers are rejecting traditional suburban homes in favor of urban living. These two generations make up almost half of the American population,

Many plan to live near city centers so they can walk to work, shops and restaurants or take public transportation. They prefer smaller homes because they’re single or have no kids. They don’t want to spend much free time maintaining their homes, and they don’t want to spend a lot on gasoline.

Many 30-something professionals also plan to live in city neighborhoods rather than in the suburbs. And they don’t plan to live in multi-story condos, according to Smart Growth America’s LOCUS, a coalition of real estate developers and investors who are in favor of urban projects.

This is a dramatic shift in the types of homes people want, and it’s probably not temporary, experts say.

The Perils Homeowner’s Insurance Won’t Cover

If your house burns down, the insurance company will pay. Ditto if a tornado blows it away.

Some homeowners have been surprised to discover that their homeowner’s insurance does not cover flood damage. or damage from earthquakes and landslides.

Other common exclusions include damage from mold, broken pipes due to lack of routine maintenance, and sewage backups.

If you live in a high-risk area for floods, your mortgage company will require you to carry flood insurance.

Even if the risk is fairly small, flood insurance is a good idea, though it can cost $1,700 a year or more on a $150,000 building and $50,000 in coverage for contents.

Consider what problems place your home at the greatest risk and beef up coverage by adding endorsements, say experts at thisoldhouse.com.

This Week’s Market Commentary

This week is extremely light in terms of the number of economic reports that are scheduled for release that may influence mortgage rates. In fact, there are only two monthly or quarterly reports and neither is considered to be highly important to the markets. There are several Treasury auctions scheduled during the week, but only two of them are worth watching. This makes it likely that stock movement will heavily influence bond trading and mortgage rates several days.

There are two public speaking engagements by Fed Chairman Bernanke, neither of which is likely to cause volatility in the markets or mortgage pricing. The first is Monday morning when he will appear via prerecorded video at a conference in Boston. He is also hosting a town hall meeting on education Tuesday afternoon in Washington D.C. and will answer questions from people in attendance and via video feed. Both of these are considered to be of very low importance and have little chance to causing any havoc in the markets.

The first economic data of the week is Employee Productivity and Costs data for the second quarter that will be released early Wednesday 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 in a week with little else scheduled, it may influence rates slightly during morning trading. Analysts are currently expecting to see an increase in productivity of 1.5% and a 0.4% rise 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 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 $47.5 billion deficit, but it will take a wide variance to directly influence mortgage pricing.

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 with so little to choose from. Monday may be a little interesting considering the size of Friday’s stock rally that pushed the Dow higher by 217 points, which drove bond prices lower. We would not be surprised to see the negative tone extend into tomorrow’s bond trading and mortgage rates, especially if stocks open higher. We never recommend straying far from your mortgage professional if still floating an interest rate, however, the markets and mortgage pricing are likely going to be much calmer than recent weeks.

Common Red Flags for Mortgage Loan Underwriters

Loan underwriters frequently see red flags that could prevent borrowers from getting a loan. John Ellis, our Senior Vice President, laid out some red flags he frequently sees:

• Borrowers buying properties separately when they are married
• Refinance where the appraised value is significantly higher than the recent acquisition cost
• Frequent employment changes / Recent increase in pay
• Recent undocumented deposits
• Lack of credit history
• Recently issued social security numbers
• Borrowers who have recently purchased other/multiple properties
• Parties in a transaction who share a last name (buyer, seller, Realtor, loan officer, appraiser, escrow officer)

A lot of these are avoidable, so be sure to keep this list in mind when applying for a home loan.

This Week’s Market Commentary

This week brings us only four pieces of economic data that have the potential to influence mortgage rates in addition to two Treasury auctions. We are also still in earnings season, so any surprises in the corporate releases could affect stock and bond trading, leading to changes in mortgage rates.

There is nothing of significance in terms of economic releases due out Monday or Tuesday except for a couple of regional manufacturing reports that usually don’t have an impact on mortgage pricing. Look for stocks to be the biggest influence on bond trading and mortgage rates those days. Stock strength will likely translate into bond weakness and slightly higher mortgage rates. On the other hand, if the week starts off with stocks in selling mode, we could see mortgage rates move lower early this week.

June’s New Home Sales starts the week’s economic releases late Wednesday morning. This Commerce Department report 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 new home portion of the housing sector gained some strength last month. That would be considered negative news for bonds, but since this data tracks only a small percentage of all home sales it usually has little impact on the bond market and mortgage rates unless it varies greatly from forecasts.

The Commerce Department will post June’s Durable Goods Orders at 8:30 AM ET Thursday. Current forecasts are currently calling for an increase in new orders of 1.0% 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 much stronger than expected number may lead to higher mortgage rates Thursday morning because it would hint at economic strength. If it reveals a large decline in new orders, mortgage rates should drop Thursday morning. 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 the markets or mortgage rates.

There are two economic 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 growth or weakness. 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 1.2% 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 week’s final piece of data is the revised reading to July’s University of Michigan Index of Consumer Sentiment that will help us measure consumer optimism about their own financial situations. This data is considered relevant 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 of 72.0, 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.

Overall, I am expecting a relatively active week in the financial and mortgage markets. We will likely see the most movement in mortgage rates the latter part of the week. The most important report of the week is Friday’s preliminary GDP reading, making it the most important day. We could see movement in rates several days, but I believe Friday will be the key day in determining if rates move higher or lower on the week.

Now Cheaper To Buy Than To Rent

It is now considerably cheaper to own a home than to rent that same home, something unheard of since 2008.

This and other promising information about the housing market was recently released by Harvard in their annual “State of the Nation’s Housing,” an in-depth study performed by The Joint Center for Housing Studies at Harvard University.

Because of historically low mortgage rates and low home prices post-recession, it is a perfect time to buy.

On the other hand, rent prices are soaring, especially in the Bay Area. According to Trulia, San Francisco and Oakland saw the biggest jumps in rent in the United States over the last year, with increases of 14.7 percent and 11.2 percent, respectively.

“With rents up, home prices sharply down, and mortgage interest rates at record lows, mortgage costs relative to monthly rents haven’t been this favorable since the early 1970s,” said Eric S. Belsky, managing director for the Joint Center for Housing Studies at Harvard.

The report also noted that today, mortgage payments for the median priced US home are roughly half of what they were in 1990. The study showed that mortgage payments are now 23% less than rent payments for the median priced home.

This means that it is a fantastic time to be a home buyer, and to get off of the fence if you’ve been waiting for the market to turn around.

Take a look at the entire Harvard study here:
http://www.jchs.harvard.edu/research/state_nations_housing.

This Week’s Market Commentary

This week brings us the release of three relevant economic reports for the bond market to digest in addition to the minutes from the last FOMC meeting and two fairly important Treasury auctions. Only one of the economic reports is considered to be of high importance and all of the reports are scheduled for release the middle and latter parts of the week.

This means we are likely to see the most volatility in mortgage pricing between Wednesday afternoon and Friday morning. 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 several days.

There is nothing of relevance scheduled for release today or Tuesday except some high profile corporate earnings reports. The first data of the week is May’s Goods and Services Trade Balance report early Wednesday 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 much of an impact on mortgage rates. However, if it does vary greatly from analysts’ forecasts of a $48.9 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 events.

Also worth noting about Wednesday 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. Of particular interest will be discussion about a potential QE3 program.

Furthermore, Wednesday also has the first of 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 buyers stay on the sidelines as they did with the recent 5-year and 7-year Note auctions, we may see bonds fall after results are posted at 1:00 PM ET and mortgage rates move higher those days.

The next monthly data comes Friday morning when the final two reports are 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 0.6% 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 favorably if we get weaker than expected readings, but a larger than expected rise in the core reading could send mortgage rates higher Friday.

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 rise slightly from June’s final reading of 73.2. This would indicate that consumers were a little more 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 over 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 our economy and the global financial crisis are 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 global 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 or Tuesday with no economic events scheduled, but the stock markets could react heavily to earnings news and influence bond trading enough to move mortgage rates. The single most important day for the bond market is either Wednesday due to the 10-year Note auction and the release of the FOMC minutes or Friday morning when the two most important economic reports of the week will be posted. Accordingly, I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate.

Buying Short Sales or Foreclosures

There’s no question that negotiating the short sales or a foreclosure can be time-consuming and frustrating. It can take months. But if you’re patient and willing to do the work, your reward will be a great house at a bargain price.

Short sales

For a distressed property, you could be dealing with third parties, each with their own agenda and process rules.

On short sales, banks will price a home close to the market value, but they are often willing to take less to avoid a costly foreclosure. The average short sale in the past year has sold at14 percent off the list price, compared with a 7 percent discount for foreclosure and regular sales.

Dealing for a foreclosure
Because banks are eager to unload properties they own, they list the home at a price at which they think it will sell quickly. These properties are often bought for cash by investors. In California, 31 percent of recent deals were by cash, according to Money magazine.

In some cases, the bank that handles the foreclosure may not own the loan. During the real estate boom years, many loans were sold off to other investors. In that case, the bank who owns the property has to consider the amount investors who own the loan are willing to accept.

Wells Fargo short sale and foreclosure servicing department says, on loans insured by the Federal Housing Administration, lenders can accept no less than 88 percent of appraised fair market value in the first 30 days. That declines to 84 percent after 60 days.

How to make an offer
In deciding what to bid on a foreclosure or short sale, remember that banks aren’t interest in making several counteroffers, though they may come back to you once or twice. In weeks to come, you could resubmit the offer and it might be accepted.

Your initial bid should be 10 percent to 20 percent below the list price.

Best Eco-Friendly Lightbulbs

For the best eco-friendly light bulb, consider how and where it will be used in your home.

Compact fluorescent bulbs (CFLs) and light-emitting diodes (LEDs) have improved dramatically and are getting even better. You can choose a light bulb that makes everything look as nature intended and still get energy savings.

The best LED bulbs can cost $10 to $70, but considering that they last for up to 25 years, they are a worthy investment.

When selecting a bulb, lighting expert Michael Hsu says considering how it will be used makes a big difference. His recommendations:

For Recessed lighting, Hsu uses the Sylvania Ultra Professional Series LED. It’s exceptionally good at highlighting colors when illuminating people, plants and furniture. It works well in track lighting ($33 to $70 at sylvania.com).

For a shaded floor lamp, the Phillips L Prize LED bulb sends light in all directions ($50 at usa.lighting.phillips.com). The GE Reveal CFL does the same and has very pleasing light (from $8 at gelighting.com).

For task lamps, which cast focused light, LED’s are a good match and don’t produce as much heat as incandescents. Quoted in The Wall Street Journal, Hsu likes the Sylvania Ultra Professional Series PAR20 ($33 at sylvania.com), because it renders beautiful colors.

For mood lighting, the GE Energy Efficient Reveal Clear halogen is about 30 percent more efficient than an incandescent, and the light quality is crisp and white. It creates a cozy pool of light ($5 at gelighting.com) and has a standard light bulb base.

The halogen, a form of incandescent, is the least efficient, but its light closely resembles that of a traditional bulb and creates ambience.

The Complicated World of Credit Scores

Lenders use different credit scores for different purchases.

If you have successfully navigated a website that offers to sell you your credit score, you may think you have all the information you need in order to apply for a loan or new credit card.

Not necessarily. The score you received could be quite different from what a lender receives. Different scores are offered for mortgages, car loans, insurance and more.

Under the Fair Credit Reporting Act that took effect January 1, lenders must either tell those who apply for credit what score was used, or tell them how it was used if the applicant doesn’t receive the best terms available.

Here are some reasons why a credit score (a number between 300 and 850) still won’t tell you how a lender evaluates of you:

* Some lenders give the best rates to people with a score of 740, others may use 760 or higher. Some give credit to people with scores in the high 500s, but others require 620 or more.

* Credit scores don’t reflect whether you are making good financial decisions or poor ones.
If you refinance your home at a lower interest rate, inquiries could show up on your report. Inquiries lower a score.

* Late payments show up on your score for a couple of years, but paying down a high balance has an immediately beneficial impact.

* If you pay your credit card bill in full every month, you don’t get a zero balance on your credit report. The report shows the balance at the end of the billing period, before the payment.

* Rather than checking your score frequently, you are better off making sure the information on your report is correct. Make your payments on time and reduce monthly balances for a month or two before applying for a loan or mortgage.

Loan Pre-Approval and Turning Yourself Into a “Cash Buyer”

Being pre-approved for a loan puts you in a great position when buying a home. It puts you on equal footing with an all-cash buyer, in essence turning yourself into a cash buyer.

With a real pre-approval, the buyer is the next-best-thing to being a “cash buyer” because the seller can rest assured that the buyer will qualify for a loan.

A truly “all-cash buyer” does not have to worry about lender approvals, but will typically still be concerned with a property appraisal and an acceptable title report.

Being pre-approved for a loan puts a buyer in a better position with the seller of the property. It allows the buyer to understand the costs associated with the purchase as well as the monthly costs associated with the ongoing ownership.

The Pre-Approval Process
The pre-approval process simply means that a buyer is getting approved for a loan prior to reaching an agreement with a seller of a property. The buyer will provide the lender with current income, asset and credit documents and the lender will determine the loan amount for which the buyer will be able to borrower.

The pre-approval process can take anywhere from 2 – 30 days, depending on the variables surrounding the possible transaction (credit worthiness, location of assets, calculation of income, etc).

Once a loan amount and purchase price have been determined by the lender, the final approval will usually be subject to an acceptable purchase contract, property appraisal, title report and final interest rates.

While it will vary from borrower to borrower based in the individual characteristics, a lender will typically be able to pre-approve a buyer within 5 days of receiving all of the applicable income, asset and credit documents.