Tools For Design : Visualize Your Home In Different Colors

In home design, the exterior is as important as the interior. The exterior are your home's first impression while performing the double-duty of protecting living space from damage and Mother Nature.

And, occasionally, you may want to make upgrades.

For some people, visualizing changes to a home's exterior is easy. For others, though, there's the Better Homes and Gardens Color-a-Home tool.

Color-a-Home is a website via which homeowners can test different exterior home designs and color combinations.  Using a series of drop-down menus and mix-and-match swatch colors, homeowners can build home exterior mock-ups featuring:

• New roofing
• New siding
• New windows
• New shutters and doors

 

Better than a mental picture of your home -- get an actual picture.

The Better Homes and Gardens site requires basic site registration to use its Color This! product suite. Color This! is also available for home interiors and window treatments.

Avoiding Common Mortgage Scams

Despite tougher mortgage guidelines and better loan disclosures for consumers, mortgage fraud is on the rise, according to the FBI.

Fraud has many varieties and it's estimated cost to the nation is between $4-6 billion annually.  Today, common mortgage fraud scams target homeowners behind in their mortgage payments and/or facing foreclosure. And, despite the hordes of legitimate organizations that dedicate themselves to helping consumers, mortgage fraudsters proliferate.

In this 3-minute piece from NBC's The Today Show, you'll learn to spot common frauds, and to avoid them.

Some of the frauds highlighted include:

1. The Rent-to-Buy arrangement
2. The Bait-and-Switch
3. The "Phantom fees"

With respect to mortgage paperwork, it's always wise to read what you're signing, and to take time to understand what it means. If you're uncomfortable reading mortgage documents, ask for an attorney's help. And don't worry if you don't have the budget -- many states offer free or discounted help via advocacy groups.

Bank Reposessions Top 100,000 In A Month For The First Time Ever

The number of foreclosure filings rose 3 percent in September, according to foreclosure-tracking firm RealtyTrac. The term "foreclosure filing" is a catch-all word for housing, comprising default notices, scheduled auctions, and bank repossessions.

September marked the 19th straight month that the number of filings topped 300,000, and the first month in which 100,000 repossessions were logged.

As usual, a small number of states dominated the national foreclosure figures, accounting for more than half of all repossessions.

1. California : 17% of all repossessions
2. Florida : 13% of all repossessions
3. Michigan : 7% of all repossessions
4. Arizona : 7% of all repossessions
5. Texas : 5% of all repossessions
6. Georgia : 5% of all repossessions

Thankfully for home sellers, mortgage servicers appear to be metering the pace at these newly bank-owned homes are made available to the public. RealtyTrac notes that, in doing so, servicers prevent "the further erosion of home prices".

That said, distressed properties still sell at a steep discount.

In the second quarter of 2010, the average sale price of homes in the foreclosure process was 26 percent lower than the average sale price of homes not in the foreclosure process. It's no surprise, therefore, that, based on RealtyTrac's preliminary data, 31 percent of all homes sold in September were "distressed".

There's lot of good deals out there, in other words, but they come with certain risks.

Buying a foreclosed home is not the same as buying a non-foreclosed home. Specifically, you're buying from a corporation and not from a "person". Contracts may vary, and so may terms.

Therefore, home buyers -- even experienced ones -- should talk with a real estate agent before making an offer. It's important to understand the foreclosure-buying process.

Fed Minutes Edge Mortgage Rates Higher

The Federal Reserve released its September 21, 2010 meeting minutes Tuesday afternoon. Mortgage rates are slightly higher today.

It's unwelcome news for this season's home buyers, and existing homeowners with plans to grab lower rates. Mortgage rates made new lows last week and may have reached a turn-around point.

The "Fed Minutes" is published 8 times annually, and is the official meeting recap for the Federal Open Market Committee. Similar to the meeting minutes released after a corporate conference or condo association gathering, the Fed Minutes details the conversation and debate between meeting attendees.

Minutes are the lengthy companion to the Fed's brief, post-meeting press release.

Because of its content, the Fed Minutes is closely read by Wall Street and economists. It's insight into the talk that shapes our nation's monetary policy and, within the text, there's often clues about the Fed's next move.

Here's some of what the Fed discussed last month:

• On inflation : It's running at lower-than-optimal levels
• On housing : Post-tax credit, housing stalled in July
• On stimulus : The Fed may intervene in open markets within the next few months

 

The over-riding theme within the minutes was that the U.S. economy is growing a steady pace, albeit slower than what's optimal. The Fed is prepared to push things along if the economy slows further and news like that is helping stock markets.

Bond markets are losing. Rates are rising.

For now, mortgage rates hover near all-time lows.  If you haven't locked a mortgage rate yet, your window may be closing.  Once the economy turns around for certain, mortgage rates will be among the first of the casualties.

Homeowner Maintenance : Twice-Annual Gutter Cleaning

Gutters are designed to funnel rainwater away from a home. Properly working gutters help keep a home's basement from filling with water, and protect a home's foundation from long-term, structural damage, and keep a roof in tip-top shape.

In other words, keeping clean gutters is essential for homeowners. Thankfully, gutter maintenance can be a do-it-yourself job.

There are four main steps in gutter cleaning, summarized cleanly in this 4-minute video from Lowe's.

1. Gather your tools. You'll need a ladder, a bucket, a hose, and a trowel.
2. Scoop large debris from the gutter, using the trowel for hard-to-reach places smaller sticks and leaves
3. Flush the gutters using a garden hose and spray attachment
4. Remove clogs in the downspout and check for proper sloping

Gutter maintenance is a twice a year task and the Lowe's video offers helpful safety tips, too.  Of course, if you're uncomfortable on a ladder, or prefer to hire a professional, reach out to me anytime.

I'm happy to make a local gutter-cleaning recommendation.

Jobs Data Shows Private Sector Growth, Hints At Lower Mortgage Rates

On the first Friday of each month, the Bureau of Labor Statistics releases its Non-Farm Payrolls report from the month prior.  This month, though, because the first Friday of the month was also the first day of the month, the report was delayed one week.

The report hit the wires at 8:30 AM ET this morning.

More commonly called "the jobs report", the government's non-farm payrolls data influences stock and bond markets, and, in the process, swings a big stick with home affordability figures nationwide.

Especially in today's economic climate.

Although the recession has been deemed over, Wall Street remains unconvinced. Data fails to show the economy moving strongly in one direction or the other and, absent job creation, economists believe growth to be illusionary.

Consider:

1. With job creation comes more income, and more spending.
2. With more spending comes growth in business
3. With growth in business comes more job creation

And the cycle continues.

The prevailing thought is that, without jobs, consumer spending can't sustain and consumer spending accounts for two-thirds of the economy. No job growth, no economy recovery.

But there's another angle to the jobs report, too; one that connects to the housing market. As the jobs market recovers, today's renters are more likely to become tomorrow's homeowners, and today's homeowners are more likely to "move-up" to bigger homes. This means more competition for homes at all price points and, therefore, higher home values.

And that brings us to today's jobs data.

According to the government, 95,000 jobs were lost in September. Economists expected a net loss of 5,000.  However, if public sector jobs are excluded from the final figures, jobs grew by 64,000.  This is a positive for the private-sector, but still trailed expectations.

Wall Street is voting with its dollars right now and mortgage bonds are gaining, improving mortgage pricing.

So, although the September 2010 jobs report doesn't reflect well on the economy overall, home affordability around the country should improve as a result. 

Fannie Mae Rolls Out New Lending Rules December 13, 2010

Starting Monday, December 13, 2010, Fannie Mae is changing its mortgage lending guidelines.

For some mortgage applicants , the loan approval process will simplify. For others, it will toughen. How you'll be affected personally will depend on your credit profile and your loan characteristics.

Among the biggest changes from Fannie Mae is a new set of guidelines for gift funds. When the new rules roll out, accepting cash gifts for downpayment will be easier.

Undetr the new guidelines, buyers of owner-occupied, 1-unit properties (i.e. single-family homes, condos, townhomes) can forgo Fannie Mae's typical, minimum 5% personal downpayment contribution. Downpayments on homes meeting the above criteria can be comprised of 100% gifted and/or granted funds.

Buyers of second homes and multi-unit properties, however, are not exempt.

There's also two changes pending with respect to revolving debt.

1. Debt with less than 10 payments remaining may no longer be waived in debt-to-income ratio calculations
2. Debt lacking a monthly payment on credit must be assigned a payment equal to 5% of the outstanding balance

Both of the above should increase the number of loan denials in 2011.

And, lastly, Fannie Mae changes some of its documentation requirements, the most noticeable of which will be with respect to income verification. Salaried workers and applicants whose commission/bonus accounts for less than a quarter of their income will have fewer paystubs to produce for underwriting.

Loan applications taken prior to December 13, 2010 are exempt from the new rules.

Fannie Mae's complete guideline changes are available online at http://efanniemae.com.

2011 Conforming Loan Limits : No Change From 2010

Conforming mortgages is so named because, literally, they conform to the mortgage guidelines set forth by Fannie Mae and Freddie Mac.

Of the many traits of a conforming mortgage, one is "loan size" and loan sizes have limits. Mortgages exceeding this loan size limit cannot be securitized as a conforming mortgage and, therefore, are ineligible for conforming mortgage rates.

Conforming mortgage rates are often the cheapest source of mortgage money , all things equal.

Each year, the government re-evaluates its maximum allowable loan size based on "typical" housing costs nationwide. Loans in excess of this amount are often called "jumbo".

Between 1980 and 2006, as home prices increased, so did conforming loan limits -- from $93,750 to $417,000.  Since 2006, however, home prices have retreated but the conforming loan limit has not.

In 2011, for the 6th consecutive year, $417,000 will be the country's conforming mortgage loan limit.

Conforming loan limits very by property type. The complete breakdown is as follows:

• 1-unit properties : $417,000
• 2-unit properties : $533,850
• 3-unit properties : $645,300
• 4-unit properties : $801,950

Despite the limits, some parts of the country get "loan limit exceptions". In areas considered "high cost", conforming loan limits range from $417,001 to $729,750. High-cost is defined by the median sales price of a region.

Los Angeles County, for example, is a high-cost region, along with a lot of California. There are less than 200 such areas nationwide, though.

You can verify your local market's loan limit via the Fannie Mae website. A complete county-by-county list is published online.

Pending Home Sales Data Points To Higher Home Prices This Fall

Consistent with calls of a housing rebound, the Pending Home Sales Index rose again in August. It marks the second straight month of improvement after May's post-tax credit drop-off.

A "pending home" is an existing home under contract to sell, but not yet closed.

According to the National Association of REALTORS®, 4 out of 5 pending homes close within 60 days, and many more close within 90 days. For this reason, the Pending Home Sales Index is an excellent forward-indicator for housing.

As a real-life illustration, after July's 27% plunge to an 11-year low, Existing Home Sales recovered 8 percent in August. This was not a surprise, though, because July's Pending Home Sales Index predicted it.

Region-by-region, the Pending Home Sales Index varied in August, suggesting better sales levels in the South and West markets:

• Northeast : -2.9% from July
• Midwest : +2.1% from July
• South : +6.7% from July
• West : + 6.4% from July

That said, real estate markets aren't "regional" -- they're local. Just as there are improving markets within the Northeast Region, there's worsening markets in the West.

Overall, buyers are being drawn into housing by low mortgage rates, affordable homes, and ample supply. If the August Pending Home Sales Index is foreshadowing the fall housing market, home prices appear slated to rise.

With The Start Of Autumn, An Easy Way To Save On Energy Bills

With the start of autumn comes a chill in the air, plus a simple way to drop your home's energy bill. For homeowners with ceiling fans, it's as simple as moving a button.

In this vintage video from The Weather Channel, you'll learn how the blades of ceiling fan are meant to work, and how they amplify a home's heating and cooling systems. You'll also learn the optimal settings for blade rotation, and how to reverse your room's air flow to take advantage.

A quick "cheat sheet":

• When a home's heating system is on, rotate fan blades clockwise
• When a home's cooling system is on, rotate fan blades counter-clockwise

Running a ceiling fan consumes a nominal amount of energy as compared to adjusting your home's overall temperature. On a warm day, for example, running a ceiling fan creates a "windchill effect", reducing a room's effective temperature by 4 degrees -- all with the equivalent power of a 100-watt light bulb.

On a cold day, the fan pushes hot air back from the ceiling where it tends to collect.

If your home is without ceiling fans, installing them is inexpensive and easy.  There's videos online to walk you through the steps, or you can call a qualified electrician. Need an electricians name? Call or email me -- I'm happy to offer a referral.

America's Most Expensive ZIP Codes (2010 Edition)

The value of a home is based on the basic economic principle of Supply and Demand. When the number of buyers exceeds the number of sellers, home prices rise. Conversely, when sellers outnumber buyers, home prices fall.

There's always a opening price point for negotiation and that figure often factors in specifics like square footage, number of rooms, and finishes and amenities. Location matters, too.

On a ZIP code-by-ZIP code basis, prices can vary wildly and it's tiny, tony 91008 -- located in Duarte, California -- that tops the 2010 Forbes list of America's Most Expensive ZIP Codes. Home to fewer than 1,400 residents of Los Angeles County, the ZIP code's median home cost is $4,276,462.

By contrast, the median home cost across all of Duarte's ZIP codes is just $358,454.

As listed by Forbes, America's 10 most expensive ZIP codes are:

1. Duarte, CA (91008) : $4,276,462
2. Atherton, CA (94027) : $4,010,200
3. Rolling Hills, CA (92074) : $3,892,456
4. Alpine, NJ (07620) : $3,814,885
5. New York, NY (10014) : $3,785,445
6. Beverly Hills, CA (90210) : $3,684,150
7. New York, NY (10065) : $3,626,001
8. Belvedere (94920) : $3,283,269
9. New York, NY (10012) : $3,221,371
10. Santa Barbara (93108) : $3,151,220

The real estate market is a local one, as evidenced by the Forbes list. Even within large cities like New York, there are areas that stand out from the pack in terms of cost and affordability and the same is true for all cities.

Therefore, when you need local market data , look past the "national statistics".  Talk to a real estate agent with local market knowledge instead. It's the most reliable way to get data that matters.