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Dec 3

Refinancing-Mortgage Rates-Different Moves

by Mary Teresa Fowler
Mortgage Refinance

While Fannie Mae announced that mortgage rates had increased this week to 4.46%, refinancing rates experienced a drop. Signs of an improving economy, however, are inspiring people to buy homes. Yet with an increase in interest rates, home refinancing falls out of favor.

Refinances Fall

Last week, applications for refinancing dropped below 75% of all mortgage applications. During the late summer of 2010, refinancing seemed to be the choice of many home owners. In early August, loan applications for refinancing accounted for more than 80% of all applications.

Only once before in recent years had applications for refinancing come in above 80 per cent. Micheal Fratantoni of the Mortgage Bankers Association points to the 80-plus percentage "in 2003, for one week, when the rate on 30-year mortgages fell below 5% for the first time since the 1950s." In 2003, the total amount of mortgages issued was almost $4 trillion – with $2.5 trillion (60%) in refinancing.

Refinancing numbers fell temporarily for a single week during October 2010. Yet afterwards, refinancing statistics stayed the same until November 19. Since June, there has not been a fall in refinancing numbers that compares with the recent drop.

Mortgages Rates Rise

According to a survey (including higher-interest jumbo loans) released by the Mortgage Bankers Association, the average 30-year contract rate tops 4.5%. Increased mortgage rates (especially above 4.5%) will bring about a decrease in refinancing numbers. Indeed, there would be less refinancing except some homeowners wanted to act now before the next increase in mortgage rates.

Anxious Homeowners

Of course, rising rates are not the only factor responsible for low refinancing numbers. Many homeowners would like to choose a refinance. Yet they cannot go that route because of reduced home equity or a decrease in income. Both circumstances result from the economic downturn.

Indeed even if people have home equity, they are less likely to use it in a recovering economy. Most homeowners have to be confident about the economy before they will use their home equity to take out cash. Chris George, president of CMG Mortgage in San Ramon, explains how homeowners think about refinancing in uncertain times compared to booming periods.

"In '04, '05 and '06 it was all about leveraging your home equity.… I would say back then three-quarters or better of the people refinancing were pulling out cash. Now it's the opposite — people are de-leveraging, saving for a rainy day," says Chris George, president of CMG Mortgage in San Ramon.

Home refinancing applications drop as interest rates rise

Reasons to Refinance

Home owners refinance for varied reasons from tapping into equity to shortening term to maturity. Yet the main reason is to save money. If refinancing is to make sense for home owners, they have to save on payments. If homeowners can see only minimal savings, the industry cannot expect to see maximum numbers in refinancing.

Of course, some homeowners are choosing a refinance. The Mortgage Bankers Association suggests that refinancing will account for almost $1 trillion of the entire mortgage market in 2010. Michael Fratantoni detailed the predictions of the Mortgage Bankers Assn. for refinancing numbers in 2011.

"Purchase loans are expected to increase a bit, to $600 billion of the total, with loan refinancing at $400 billion, or 40%, as rates rise above 5% by the end of the year, " says Micheal Fratantoni of the Mortgage Bankers Association.

Will You Be Applying For A Refinance?

Image courtesy of blogcu.com

Dec 1

Residential Energy Property Credit

by Mary Teresa Fowler
Residential Energy Property Credit

U.S. homeowners have only until December 31, 2010 to take advantage of the current Residential Energy Property Credit. This 'green' program is available to home owners who make energy-efficient improvements to their houses. New homes or rentals are not eligible for this credit and the home must be the person's principal residence.

Federal Tax Credit

This property credit is about to expire and qualifying items must be bought and installed before the end of 2010. People can make purchases such as heating and cooling systems, insulation, roofing, windows and doors, water heaters, and biomass stoves. The credit is a dollar-to-dollar reduction on the amount of tax owed and home owners can receive up to 30% of the cost – up to $1500 per home. Two or more unmarried people living in the same home with joint ownership are each eligible for the tax credit on money spent for improvements. Yet the total credit cannot exceed $1500 for a single home.

The credit includes installation costs in certain categories but not for all purchases. For example, installation costs are covered for heating, ventilating, and air conditioning (HVAC). The tax credit, however, does not include installation costs for insulation. As well, not all ENERGY STAR qualified products are included in this initiative. Homeowners are advised to check out the rules of eligibility for this credit.

Associated Components

People are wondering if the tax credit applies to components associated with a product. If a homeowner purchases a biomass stove, will the cost of a hearth, stovepipe, and chimney be eligible for the credit? The IRS administers this program and they have not issued any written guidelines about eligible components.

Homeowners can contact the IRS for the official word. Yet it has been widely suggested informally that components are covered if they are critical pieces of the product's energy efficiency. If the component can be used with a non-qualified product, it does not meet eligibility guidelines for this credit.

How To Apply

For products installed in 2010, homeowners must file the IRS Form 5695. They must submit the form with their 2010 taxes by April 15, 2011. Homeowners must save receipts and the Manufacturer's Certification Statement for their records. A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Manufacturers should provide these certifications on their website.

Income Limit

There is no income limit with this program but it is a 'non-refundable' credit. Homeowners' credits cannot exceed their tax liability (the amount they pay in taxes).

Future Energy

If a homeowner cannot make the December 31 deadline, there are other opportunities to take advantage of energy-efficiency programs. Indeed, new homes and second homes (as well as existing homes) are considered for a tax credit in two additional incentives. The programs vary and cover from 30% of the cost with no upper limit to 30% of the cost and up to $500 per .5 kW of power capacity. These credits do not expire until December 31, 2016. Learn more about Federal Tax Credits for Consumer Energy Efficiency.

Last chance for homeowners to get green tax credit

Have You Applied For The Residential Energy Property Credit?

Image courtesy of billshrink.com

Nov 3

Who Controls Household Finances?

by Mary Teresa Fowler
Controlling Household Finances

'Control' is a powerful word. The terms - co-operation, team approach, and partnership - have much more pleasant connotations. Yet apparently, one gender is in control in North American homes. No team approach here!

Women in Control

According to two recent studies, women are in control of household finances. This fact is not even new information in the area of finance. Women had been holding the household purse strings long before this year's study.

Environics Research Group conducted an online survey from July 22-August 4, 2010 on behalf of MasterCard. They studied 2000 18+ Canadian women. Fifty-one per cent of the women said that they were responsible for the financial decisions related to the day-to-day running of the household. Actually, this number is 4% lower than shown in a similar 2006 survey.

According to the summer 2010 study, 56% of these women were quite comfortable being in control of household finances. Only 45% of women in the 2006 research said that they liked their role. More women are enjoying their position of power.

Canadian Women Enjoy Wearing the Financial Pants in the Household

Actually, maybe even more women have control of household finances than is suggested by the MasterCard Index. A little more than 50% of this group talked about having control. In a survey of 1000 women organized by Prudential Insurance in February 2010, 95% said that they controlled the household money.

Women and Finance

Throughout the years, a discrepancy seems to exist between the financial power of a woman in the home and women in society. While there were few lady bankers in the past, women were managing the money in homes across the continent. Now there are women bankers (and women in every profession) and they are still handling the finances for the household. What do all the statistics mean in the real world?

Why do modern women still wield the greatest control over household finances? Is it because most household responsibilities fall into their hands? Or does the decrease in numbers from 2006 indicate maybe that men are taking on a larger share of household responsibilities?

As well, remember that women struggled to be able to vote, get equal pay, and be welcomed into certain professions. How did women so easily get such control over household finances? Could it be that society doesn't put the same value on running a household as running a business? Even though our homes are the heart of our nation!

Women's control of household expenses does not always translate into control of overall family financials. The Prudential Insurance study suggested that almost all women control household finances. Yet in that same group, 86% did not feel capable of choosing financial products and 51% were unsure about how to generate income during retirement. There seems to be mixed signals about how society views women and finance – although the world of finance is becoming more "women-friendly."

Prudential Insurance says that the average female income has grown 63% within the last 30 years. Yet many women still lack the confidence to manage their money. Maybe many women undervalued their skills - including the years of money management.

Women Control Financial Decisions In The Home But Remain Unsure

Who Controls The Finances In Your Household?

Image courtesy of nmeg.co.uk

Oct 29

Inviting Front Doors – What a Treat

by Mary Teresa Fowler
Inviting Front Doors

On this Halloween weekend, the more mysterious and creepy your entrance looks, the better kids (and adults) like it. Yet come Monday morning, lose the look! Indeed, if you are planning to sell your home, a mysterious, hidden, or overgrown entryway won't attract buyers. No dead branches or plants in the yard! Without a doubt, a horror of a door will spook your buyers.

Potential home buyers respond to well-tended property and a welcoming entrance. A neat and attractive entryway gives the impression that you care about this home. An inviting door and tidy yard can help to sell your home before the buyers even see the interior.

Added Attraction

Every house should welcome guests (and buyers) through an attractive and well-maintained front door. No scratches and scrapes or doors that won't open or close without considerable effort! The finish on doors can fade and chip after years of enduring weather conditions. Sometimes it is not necessary to buy a new door. A light sanding and a paint job might do the trick. Follow the manufacturer's instructions to choose the right type of paint.

Complementary Colors

The color of the door must work with the color scheme of your home's exterior. It doesn't have to be the same shade as the house. Yet the color should not provide so much contrast that it draws attention to the door alone instead of the entire home.

A bright color can work if your home is surrounded with brilliant flowers or blazing foliage. Generally, colors that blend with natural hues look welcoming at an entrance. Choose shades that match the natural elements (like stone or brick) of your home and its surroundings (landscape and other buildings).

Brilliant white is not an appealing choice for a front door because it is a stark color. Bright white is a cold tone - not a welcoming color. A white paint with a touch of yellow or pink is a better choice.

Your door should fit the look and style of your house. A small cottage should have a cozy look. A stately home should have a more formal entrance.

Surviving the Storm

Your door must look sturdy enough to survive a storm. You don't want potential home buyers to think that their entry door will blow down at the first gust of wind. If a home has a main door and storm door, both should look their best. If you can't afford to replace the main wood or metal door, buy an affordable and decorative storm door to make a great first impression.

Getting a Handle

When home owners put in the time and effort to make improvements to their entrance, they are 'getting a handle' on the sale. They are setting the stage for the sale of their home. Maybe that will mean having to buy new door handles.

Metal door handles can tarnish and chip over time. If yours look the worse for wear, replace them. Handles and locks are not difficult to install and it could be a DIY project. If there isn't already a deadbolt on the door, it may be a smart idea to install one. It will be safer for you while you're in the home as well as an extra safety feature that will impress buyers.

Decorative Touch

Even though the Halloween decorations are gone, potential home buyers won't mind a glorious fall arrangement or silk flower wreath on your door. It adds a decorative and welcoming touch. Inviting doors 'invite in' guests – and home buyers!

How to Improve the Front Entrance to Help Sell a Home

How to Choose a Front Door Color

Which Inviting Color Did You Choose For Your Front Door?

Oct 18

Home 'Small' Home

by Mary Teresa Fowler
Home Sweet Home

Ah, home sweet home! Make that home 'small' home for an increasing number of home builders and home buyers. House construction is seeing smaller and less expensive homes because builders are not getting the same price as before for expansive, upscale properties. A few builders claim that they are not making back the construction costs.

Shrinking Size

Some builders are getting rid of homes at a loss and concentrating instead on the business of renovation. Although in uncertain economic times, neither one is a safe bet. Everything has experienced a decrease in this economy (in certain areas more than others). Everything from house appraisals to new homes to house prices is seeing a decline – and now houses are also shrinking in size.

Part of the decision to go 'smaller' is fuelled by varied events that have undermined people's confidence in the market. Such issues as foreclosure rates, flawed foreclosures, lending issues, and more, are causing a build up of anxiety among potential home buyers. Of course, home builders share their anxiety.

"It's slowing the recovery of new construction. It's sapping confidence," says Robert Filka, CEO of the Michigan Association of Home Builders

In a certain Michigan suburb, a 3,600-square-foot home with 10' ceilings, is selling at a loss for the builder at $699,000. In 2008, that same home was priced at $875,000. Within the past decade, homes in that neighborhood had sold for $2,000,000. Times have changed and builders are changing with them.

No Luxury

With unpredictable appraisals that can come in even $80,000 less than expected, luxury homes can be a problem. Appraisers have to factor in recent sales in the neighborhood. At present, neighborhood sales can include anything from a short sale to a foreclosure.

As well, home buyers are often asked for higher down payments (even up to 25%). Luxury homes may start looking less and less appealing to home buyers. Builders who have noticed that trend are opting to construct smaller homes. Maybe a less expensive home will not seem as intimidating to the potential home buyer.

Hard times force home builders to think small


Some people are adamant about the benefit of small houses. Cost-effectiveness, smaller mortgages, and a simpler lifestyle are a few reasons that people give for choosing smaller and less expensive homes. Even environmental reasons play into the desire for smaller homes. They use fewer resources in building and for maintenance.

Of course, buying a 'too small' home is not a wise move. A home can be as small as anything - as long as it suits your needs. If a home does not have sufficient space, it will not work for a growing family.

Perfect Fit

Yet if the size suits you, a small home might be the right choice. People have found 'small home' ownership to be an exhilarating experience. It frees up savings for travel and it frees up the precious commodity of time.

'Small home' ownership means less time spent cleaning and fewer hours required for maintenance. Smaller homes allow you to have more quality time with family and friends. Maybe though not everyone will want to go as 'small' as this home builder.

Take a look at - World's Smallest House!

Have You Been Dreaming of Building a Small House?

Would A Small Home Suit Your Needs?

Sep 20

Fall Home Show

by Mary Teresa Fowler

With the official start of autumn shortly upon us, home fall shows are showing up everywhere and these annual events draw huge crowds. Some things about fall home shows always stay the same. You are bound to see warm touches and shades of pumpkin. Yet every fall season brings a new and bountiful crop of home décor trends. Surprisingly, some fall home shows even emphasize spring designs.

Spring in Fall

People who look at home furnishings in fall might be preparing to build a home in the coming spring. Therefore, it is not that unusual to see fall home shows include some spring-like styles. Maybe a few pale pastels might find themselves in the company of autumn orange.

Autumn Green

Yes, green is the color of renewal and rebirth, but fall home shows are going 'green' in more ways than one. Of course, shades of green remind those future home owners about the joys of spring. As well, autumn shows are becoming friendlier to the environment.

More stores like "ReStore' in Vancouver have booths at these events. 'ReStore' sells high-quality used (and new) building supplies such as kitchen and bathroom counters, lighting, and appliances. Home owners can find similar 'green' outlets at home shows all across Canada and the US. You will always find the latest green cleaning supplies like AspenClean - the first cleaning product in Canada to be certified by Ecocert (the European regulator of organic cosmetics and food).

Prices at home shows can be more than 50% lower than department store prices. Yet the merchandise can include top quality materials. Shoppers might pick up a cool and classic black granite countertop because someone preferred a lighter shade of granite.

If 'used product' stores did not exist, these building supplies would end up in the landfill. Since more and more people are adopting a green lifestyle, these outlets can now take their rightful place at the fanciest fall home show. 'Used' outlets are becoming the new 'cool' shopping experience with the 'green' crowd.

Design Books

Design books are now the darling of home shows. The design book booths cater to those who 'want' to learn more about design as well as those who 'need' to learn more about design. If you can't afford the designer pillows, you can buy a good interior design book that tells you how to make your own autumn pillows.

Designer books offer support and ideas to home owners. These books are an invaluable resource especially for people on a limited budget. A good quality design book is worth the investment because they offer tons of ideas for every season. Sometimes using the latest trendy colors or fabric can do wonders in recreating a designer look.

Customized Design

Home shows shine the spotlight on local artisans who produce one-of-a-kind products. Custom orders are part of the thrill of home shows. Shoppers can choose from a wide selection of unique items. Customize your home for fall and show off your harvest colors.

What Did You Fall For At Your Local Autumn Home Show?

Image courtesy of hbafm.com

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