Simple Steps To Keep Home Insurance Costs Down

June 29, 2007 by · Leave a Comment
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As premium rise across the nation, Bankrate.com features a helpful story on ways to keep homeowner’s insurance premiums down. Some of the tips may surprise you.

Here are some highlights:

  1. A series of small claims is expensive to process for an insurer and may result in higher premiums
  2. Don’t lie about your history of claims — similar to CARFAX, homeowners have a “record” that track prior filings
  3. Higher credit scores can lead to lower premiums
  4. Your driving records impact your premium calculation
  5. A robbery before you ever moved in could result in higher premiums

The article also provides a fair amount of myth-busting so it’s worth a read. A few minutes could save you some good money on your home insurance.

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The Fed Is Adjourning Today And How It Impacts Your Mortgage

June 28, 2007 by · Leave a Comment
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The Federal Open Market Committee adjourns from a two-day meeting today and so this is a good time to remind yourself: The Fed does not control mortgage rates.

Rather, the Fed sets the Federal Funds Rate.

And the FFR is, in turn, used to determine Prime Rate.

Prime Rate, in turn, is used to determine the rates for credit cards, charge cards and home equity lines of credit.

And this is why today’s meeting should be important to holders of debt — the Fed’s decision to lower, raise or hold the FFR at its current level can impact the spending of every American household.

The Fed is widely expected to hold the Fed Funds Rate steady today, but Ben Bernanke & Co will issue a press release discussing the group’s view on the economy and the outlooks for the future.

As it relates to mortgages, the Fed’s actual actions today mean nothing. Instead, it’s all about the words. What will the FOMC say about inflation, the economy, and the outlook for the future?

This is what impacts the mortgage markets more than anything else.

If the Fed shows fear of inflation, mortgage rates will go up. If the Fed is satisfied that the economy is exhibiting controlled growth, mortgage rates will come down, by contrast.

Right now, markets are anticipating a bullish view on inflation from the Fed and that is one of the reasons why mortgage rates increased so dramatically since March. It will be looking for further clues at 2:15 P.M. ET today.

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Five Simple Steps To Create A “Showing-Friendly” Home

June 27, 2007 by · Leave a Comment
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One of the most difficult things about having your home on the market is keeping it meticulous for repeated showings.

Every residence has loads of corners and nooks that require constant attention to stay spotless.

Potential buyers don’t intend to be oblivious, but they often bring dirt, mud, coffee cups and other strange particles with them from the outside world as they trudge through a showing of your home.

Rainy days don’t help the situation.

To reduce the amount of cleaning and re-cleaning, try making your home “showing-friendly” by following these simple steps:

  1. Leave a large welcome mat outside your door. Make sure that it’s neutral (i.e. no “GO AWAY” or other novelty mats)
  2. Leave another welcome mat just INSIDE your door. This one should match your home’s decor.
  3. Stack up some shoes close to the door and in plain view. This is a gentle hint that removing off your outside gear is preferred.
  4. Place a coat rack near the door if the weather is cool or rainy.
  5. Leave a trash can in plain view with a trash bag in it.

These small precautions can lessen the need to re-clean your home after every showing (or even multiple showings in a day). They will help keep your place looking terrific.

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How To Protect Yourself From Becoming A “Trigger Lead”

June 26, 2007 by · Leave a Comment
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The major credit bureaus are selling trigger leads and many credit applicants are unaware

From the CBS News Video Web site, an interesting story for anyone who’s recently applied for credit.

Credit repositories now sell the contact information of people applying for new mortgage loans to other mortgage lenders that want to compete for the business.

Called “trigger leads”, an unsuspecting mortgage applicant can have his credit checked by a mortgage lender, and then discover that the credit bureaus have sold the rights to his personal information to countless other credit firms across the country.

Because trigger leads identify a person making a lending decision right now, one marketer of trigger leads calls them “the best leads in the business”. It’s no wonder that the credit bureaus are marketing them, and that some lenders are salivating over them.

As the family in the CBS video learned, though, it’s difficult to make the phone stop ringing. Some of the calls bordered on harassment.

For consumers, there is a very low-tech opt-out Web site called http://www.optoutprescreen.com that is sponsored by the three major credit bureaus (and are also the ones that sell trigger leads). You can opt out for five years, or submit a form by mail to opt out forever.

Watch the video and then go protect yourself.

(Image courtesy: CBS News Video)

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The First Wave Of Summer Home Buying Is Over

June 25, 2007 by · Leave a Comment
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June is the peak selling month for real estate.

If your home is listed and hasn’t sold in June, though, it’s not the end of the world. It’s just time to be a little bit more creative.

A good real estate agent will have loads of ideas to expand your home’s natural buyer pool.

If you live near a college, for example, home sales can come later in the summer if parents are looking to buy “second homes” for their children to live in.

Condos can be especially attractive to older students (think: upper-20s and 30s) and/or graduate student with families, and your agent may specifically market to these buyer sets.

A home is product and needs to be marketed like anything else we buy. If your home didn’t sell yet, don’t worry — there are always options.

Don’t feel bashful about picking your real estate agent’s brain for some good ideas to help re-position your home for a late-Summer sales push.

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Condominium Associations Invoke Many Different Reactions From Buyers And Residents

June 22, 2007 by · Leave a Comment
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Pop Quiz:

Q. Which of the following reactions are normal for condominium owners when thinking about their building’s condo association?

  1. Fear of the association’s ability to impose restrictions on residents of the building
  2. Confusion about the association’s purpose
  3. Denial that dues and assessments are determined by a resident “governing body”
  4. Acceptance of how the association can preserve the condo units’ value strong by-laws

A. They are all correct. These are all normal reactions to a condo association.

As a buyer considering a move to an association-controlled home, though, you can use home showings to get beyond your initial “reaction” and to see whether the association is effective or not.

For example, take a quick gander at common areas.

Are they clean? Is the landscaping well-maintained? Are the floors and walls kept in good condition?

Even as we talk about curb appeal in homes, common areas (and building exteriors for condo buildings) are the curb appeal for owners in an association.

A good association can add value to a property; a bad one can take it away. Your real estate agent can help you ask the right questions to determine “just how good or bad is the association for this home”.

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Be Wary Of Opinions That Masquerade As News

June 21, 2007 by · Leave a Comment
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Is “news” always news, or is it masked opinion?

When doing research on mortgages, it’s important to pay attention to the objectivity of your research source.

Often, a writer will deploy key adjectives, phrases, and/or images that distort an otherwise factual story.

This cartoon from clangnuts.com is a terrific example.

It implies that interest only home loans are for people that can’t otherwise afford homeownership.

The truth is that interest only loans are used by all economic classes of homeowners — not just those that need payment relief.

Many people choose interest only home loans for their flexibility, or as a financial planning tool.

Sure, there are some people that use interest only loans to “get onto the housing ladder”, but that is a statement about the homeowner and not the mortgage product.

Our opinions are often formed by the words and images we hear in a public forum. Sometimes, it pays to look a little deeper.

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Landlording Is A Tough Business That’s Not For Everyone

June 20, 2007 by · Leave a Comment
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Before becoming a landlord, look before you leap

If you are planning to be a landlord for the first time, take some time to research what you’re getting into.

Don’t take the plunge until you have gathered as much information and read as many books about the subject as possible, and then until you have talked to as many people as possible.

Landlording is a tough business, and it is not for everyone.

You may want to go into property management after doing your research, of course. But there are many things you can learn first to make the job easier — ranging from personal finance to real estate law to home maintenance.

Think of being a landlord as a career, not a hobby.

If you have never welded but want to be a welder, the first thing you need to get is a strong education in welding. The same is true with the tough but fine art of being a landlord.

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Gas Prices Dip Below $3.00 But Are Still More Than Double Five Years Ago

June 19, 2007 by · Leave a Comment
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For those that drive to work each morning and even those with extreme commutes, this is old news.

Since Memorial Day weekend when gas prices touched $3.24/gallon nationally, the cost of filling up dipped below $3.00. According to Gas Buddy, Monday’s average cost per gallon was $2.995.

Even though each gas tank feels less expensive, gas prices are still much higher for late-June than in years prior.

2002: approximately $1.40/gallon
2003: approximately $1.48/gallon
2004: approximately $1.92/gallon
2005: approximately $2.14/gallon
2006: approximately $2.82/gallon
2007: approximately $2.99/gallon

Gas prices change quickly and those changes can be attributable to the price of crude oil, increased demand for gas from road travelers (i.e. summer road trips), or an interruption in the overall production (i.e. supply) of Gulf Coast refineries or from crude oil sources.

Since 2002, all three factors have contributed to the increased cost of gasoline. Over the past three weeks, though, we’ve all gotten a break and should enjoy it while it lasts.

Trouble is brewing in Nigeria that could push us right back over the $3.00 level very soon.

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Front Porches Add Form And Function (And Don’t Have To Rot)

June 18, 2007 by · Leave a Comment
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Front porches don't have to rot so quickly thanks to specially-engineered wood products

Porches can be a fantastic addition to any house, invoking a certain “charm” or providing space for a swinging love seat.

Regardless of its function, your home’s porch’s form is often what creates your home’s first impression.

Because porches do not shed water, they can require a lot of maintenance. Wood will eventually rot because it stays wet.

New technologies such as engineered composites, however, do not rot and can be pre-made to be used as a deck. This is a recommended course of action.

Railings and fixtures — staples of any porch — can be wood products without fear of premature rot as water does not “pool” on vertical surfaces.

If you plan to sell your house, a new, maintenance-free porch can be a major selling point in addition to improving “curb appeal” and first impressions.

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