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Real Estate's
"Wealth Effect" Insulates Against Recession
The
home-based "wealth effect" has earned millions of home
owners thousands of dollars that are likely to see them well
through the recession -- and perhaps ease the recessions'
impact on the nation.
According to the "Home Wealth Effect Survey," a report
recently issued by the National Association of Realtors, the
typical homeowner now has $50,000 in home equity -- $100,000
for households earning more than $75,000. Baby boomers, aged
50 or older, have still more money on the house -- $80,000.
In some California and New England areas, home-earned equity
is still more -- three, four times as much and higher.
While many home owners use that equity to move up to a
larger home or buy
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Mortgage Rates
U.S. averages as of November 30, 2001:
30 yr. fixed: 7.02%
15 yr. fixed: 6.53%
1 yr. adj: 5.22%
Get today's rates
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Higher Credit Scores
On The Horizon?
Home
buyers and refinancers who've paid all their credit card,
mortgage and revolving debts on time could be in for an
unexpected bonus: A big jump in their credit scores, opening up
the possibility of lower interest rates and fees on future
loans.
On the other hand, under important credit-scoring changes
now being introduced to major lenders nationwide, some
late-paying borrowers can expect painful retribution:
significant drops on their scores below where they are today,
potentially costing them more money the next time they apply for
a mortgage.
These little-publicized credit score changes are part of a
new, alternative approach being rolled out by the developer of
"FICO" scores, the dominant credit-risk ratings used by mortgage
lenders, credit card issuers, auto finance firms, insurance
companies, employers and landlords across the country.
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Does Your Closing Date
Make A Difference?
There's
a common belief that you can "save" a lot of interest by
settling at the end of the month. Is this true? Does it make a
difference if you settle at the beginning of the month or at the
end?
All mortgage payments are paid in "arrears." This means
that any mortgage payment covers the interest owed for the
preceding month. It's the opposite of rent payments, which are
due in advance.
Since mortgage payments are paid in arrears, your first
mortgage payment will always be due at the end of the first full
month you took out the loan. Here are two examples:
If you settle in early December, your first full month will
be January and your first mortgage payment will be due February
1st -- almost two months after settlement.
If you settle at the end of November, your first full month
will be December and your first payment will be due January 1st
-- about one month after settlement.
If you settle in the beginning of any month, you will be
required to pay the interim interest from the day you settle to
the end of the month.
If you settle of the tenth of the month, you would pre-pay
roughly 20 days of
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Remodeling? Check
Your Insurance!
You've
hired an electrician, selected new tile, countertops and appliances,
and have the home improvement loan in order. You're all set for your
remodeling project -- or are you?
As you embark on any type of home improvement endeavor, be
sure you make a call to your insurance agent to determine whether
additional homeowners insurance coverage is needed. And, if
contractors or sub-contractors are involved, you'll want to be sure
they have the proper insurance so you're not liable for any
accidents or damages that may occur while they work on your project.
Check your insurance coverage BEFORE the work begins. If the
new work is damaged or destroyed before additional coverage takes
effect, you could be responsible for repair costs, according to the
Insurance Information Institute.
Daily News and Advice
Read about the events shaping the Real Estate
market today, find current interest rates, or browse the
extensive library of advice and how-to articles written by some
of the top experts in Real Estate. Updated each weekday.
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