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Consider Protecting Against Injury Before Protecting Against Death

January 9, 2008

Some quick statistics: 13% of Americans will die before age 65 28% of Americans will face a long-term disability before age 65 and be unable to work and/or earn an income Despite these facts, Americans are twice as likely to be insured on their lives as on their long-term health. Life insurance is important, but is much […]

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Americans Are $6.25 Billion More Wealthy Since September Because Of The Federal Reserve

January 8, 2008

Since September 2007, the Federal Reserve has lowered the Fed Funds Rate by 1.000%. This has caused Prime Rate to fall by 1.000%, too.  This is because the Fed Funds Rate and Prime Rate are directly related. In mathematical terms, the relationship looks like this: (Prime Rate) = (Fed Funds Rate) + (3.000%) So, because […]

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The Week In Review (January 07, 2008) : What To Watch For

January 7, 2008

Stock markets tanked last week behind high oil prices and weak employment data. Amid a sell-off that led to a 4.5% decline in the S&P 500, investors sought safety in the bond markets. As a result, mortgage bonds improved last week, driving some mortgage rates to their lowest levels in two years. This week, with […]

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Why It’s Not So Bad That Unemployment Reached Its Highest Rate Since November 2005

January 4, 2008

On the first Friday of each month, the Bureau of Labor Statistics releases key data about the American workforce. The report is officially called “Non-Farm Payrolls” but most people refer to it as the “jobs report”. The jobs report’s influence on markets is palpable for two major reasons: Consumer spending makes up two-thirds of the […]

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$100 Oil Could Mean More Than High Gas Prices For Americans

January 3, 2008

The price of oil briefly touched $100 per barrel yesterday, just short of the all-time inflation-adjusted high of $102.81 in April 1980. According to economic forecasting firm Global Insight, each $10-per-barrel increase in oil prices: Increases gas prices by 19 per gallon Cuts consumer spending by one-third of a percent Reduces employment by 100,000 Adds […]

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The Week In Review (January 2, 2008) : What To Watch For

January 2, 2008

It’s a short, but heavy, week for mortgage markets.  Investors are returning to the fray after a few lighter-than-normal weeks and their return should bring some stability to mortgage rates. Last week, mortgage bond prices rose which, in turn, moved mortgage rates down. The main reason for last week’s rate improvement was the assassination of […]

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The Week In Review (January 2, 2008) : What To Watch For

January 2, 2008

It’s a short, but heavy, week for mortgage markets.  Investors are returning to the fray after a few lighter-than-normal weeks and their return should bring some stability to mortgage rates. Last week, mortgage bond prices rose which, in turn, moved mortgage rates down. The main reason for last week’s rate improvement was the assassination of […]

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The Difference Between Private Mortgage Insurance And Homeowners Insurance

December 28, 2007

Private mortgage insurance (PMI) is insurance for the mortgage lender in the event of homeowner default. PMI helps the lender recover its costs and losses after foreclosing and selling a repossessed home. PMI rates vary by loan type, loan size, and loan characteristics.  The higher the risk to the bank, the higher the cost of […]

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The Difference Between Private Mortgage Insurance And Homeowners Insurance

December 28, 2007

Private mortgage insurance (PMI) is insurance for the mortgage lender in the event of homeowner default. PMI helps the lender recover its costs and losses after foreclosing and selling a repossessed home. PMI rates vary by loan type, loan size, and loan characteristics.  The higher the risk to the bank, the higher the cost of […]

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How The Case-Shiller Home Price Index Over-Simplifies Real Estate Markets

December 27, 2007

The headlines say that home prices are down 6.7 percent from a year earlier.  It’s important to recognize that this is a national figure. “National” has nothing to do with real estate.  Real estate is local. The chart above is from the latest S&P/Case-Shiller home-price index and — averaged out — shows that home prices […]

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Holiday Spending APPEARS To Be Lower, But It Isn’t Really Lower

December 26, 2007

During the Holiday Season, economists watch consumer spending intently because it makes up two-thirds of the U.S. economy. When spending is stronger-than-expected, it can lead to inflation which pushes mortgage rates higher. So far this season, mortgage shoppers should be in good spirits.  Sales have fallen four weeks in a row and the outlook for a late-December rally […]

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Understanding Real Estate Terms: Absorption Rate

December 24, 2007

In light of today’s New Homes Sales data and Monday’s forthcoming Existing Homes Sales report, let’s review a term that real estate professionals use to describe housing inventory. Absorption Rate is a real estate term for the length of time required to sell all of a given stock in a given area. We can use […]

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The Week In Review (December 24, 2007) : What To Watch For

December 24, 2007

Mortgage rates moved away from the best levels of the year last week with force, and this week could resemble last. Markets have been grappling with conflicting signals about the U.S. economy. On one hand, there is evidence of inflation in the form of higher cost of living.  On the other hand, there is evidence […]

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New Homes “Sold” Is Not The Same As New Homes “Closed”

December 23, 2007

With tomorrow morning’s New Home Sales report, markets will get a look at the number of newly-constructed homes sold in July. The figure is expected to be in the 825,000 range.  This is lower than June’s 834,000 figure. But — as always — there is more to the story. When the Census Bureau reports on […]

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How Congress Is Providing Tax Relief To Foreclosed Homeowners

December 21, 2007

After Thursday’s passage of the Mortgage Forgiveness Debt Relief Act of 2007, foreclosed homeowners have one less worry: taxes. When a homeowner defaults on a home loan, a mortgage lender will sometimes “forgive” the debt owed. One example is when a foreclosed home sells for less money than is owed on it.  The mortgage lender […]

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For Some Homeowners, PMI Is Tax-Deductible Through 2010

December 20, 2007

The resurgence of private mortgage insurance continues — if only because it’s aided by Congress. For eligible homeowners, lawmakers voted to extend the tax-deductibility of PMI through 2010.  The law was previously scheduled to expire at the end of 2007. For all loans originated prior to December 31, 2010, and within those years, private mortgage […]

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You’ve Been Pre-Approved — Now Get RE-Approved

December 19, 2007

Even if you’ve been recently pre-qualified (or pre-approved) for a mortgage, it may be prudent to get “re-approved”. The mortgage industry is changing quickly; being prepared beats the alternative. Recently, mortgage lenders have made adjustments in what they will lend, and to whom.  This shrinks the pool of eligible mortgage borrowers. Some of these guideline […]

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How To Squeeze Extra Tax Deductions From Your Mortgage In 2007

December 18, 2007

For most Americans (but not all), mortgage interest is tax-deductible in the year in which it was paid. With some advance planning, therefore, a homeowner can increase his 2007 tax deductions by paying additional mortgage interest while the calendar still reads 2007. The key is to make the mortgage payment due January 2008 a few […]

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The Week In Review (December 17, 2007) : What To Watch For

December 17, 2007

Last week proved once again: The Fed does not control mortgage rates. On Tuesday, after the Federal Open Market Committee lowered the Fed Funds Rate by 0.250%, mortgage rates began an ascent that carried all the way through Friday’s close. As a result, mortgage rates are dramatically higher today than just one week ago. Other […]

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Why Recession Is Not A Guarantee In 2008

December 14, 2007

In its biggest month-over-month jump since 1973, the Producer Price Index rose 3.2 percent in November. PPI is like a “cost of living” measurement for consumer, except that it applies to business. PPI measures how expensive it is to produce goods on a day-to-day basis. PPI spiking in November is an important development for all […]

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