Cut your heating bills this winter

9 Sneaky Ways to Cut Your Home

Heating Bills

November 24, 2015

Home heating bills can be daunting, especially for those who live in colder climates. But there are ways to keep costs down without resorting to wearing jackets indoors. Here are 9 easy hacks that will help keep your home toasty at a budget-friendly price.

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New-home sales rebound in October

From LATimes.com 11/25/15

Sales of new homes recovered in October after suffering a steep drop in September, indicating a return to stability in the housing market.

The Commerce Department says new-home sales climbed 10.7% last month to a seasonally adjusted annual rate of 495,000. This rebound followed a 12.9% plunge in the sales rate during September.

Americans recovered much of their appetite for owning new homes this year. Purchases have surged 15.7% year-to-date, benefiting from the solid hiring gains and low mortgage rates.

The new-home sales report tends to be volatile from month to month. Home-buying surged 135.5% in the Northeast in October, while rising less aggressively in the Midwest and South. Sales dropped slightly in the West.

But prices dipped last month despite other industry reports indicating that real estate prices have eclipsed income growth. In October, the median new-home sales price fell 8.5% from a year ago to $281,500.

The real estate sector is still healing from the bursting of the housing bubble and the 2008 financial crisis. Sales of new homes remain below the 52-year historic average of 655,200.

There are other signs that the sales gains of the past year are levelling off. Sales of existing homes began to slow last month, a sign that rising prices are creating affordability problems for many would-be buyers.

The National Association of Realtors said Monday that sales of existing homes fell 3.4% in October to a seasonally adjusted annual rate of 5.36 million.

Despite that monthly decline, existing- home purchases have increased 3.9% from a year ago. The sales improved even though potential buyers face slim picking as the number of listings on the market has dropped 4.5%.

Low mortgage rates have eased some home sales. But rates have started to rise ahead of a December Federal Reserve meeting, where Fed officials are expected to raise short-term rates for the first time in nearly a decade.

The average, 30-year fixed mortgage rate was slightly under 4% this week, compared to 3.79% a month ago, according to mortgage buyer Freddie Mac

The 7 Secrets Of People With Super Clean Houses

From Trulia 11/19/15

Hint: They don’t spend hours scrubbing their homes. And if you follow these tips, you won’t either. – See more at: http://www.trulia.com/blog/the-7-cleaning-tips-of-people-with-super-clean-houses/#sthash.zsrEjOM5.dpuf

plant on tidy mantle

How Much House Can You REALLY Afford?

From Trulia 11/19/15

It doesn’t matter if you’re searching homes for sale in Fort Lauderdale, FL, or Philadelphia, PA. Type “how much house can I afford” into a Google search and you’ll come up with a number of online tools and mortgage calculators to help you figure the answer to your query. You might also see rules of thumb that state things like “your mortgage payment shouldn’t take up more than 35% of your monthly income.”

But it’s important to make sure you understand how the pieces all fit together, and that you take your personal financial situation into account. Here’s why.

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Financial rules of thumb may not apply to you

Every person’s finances are just as individual as they are. So while it may be a good reference point to know that your mortgage payment shouldn’t be more than 35% of your monthly income, that figure could vary a lot depending on things such as debt and other monthly payment obligations, not to mention how much you’ve saved for a down payment.

Online mortgage calculators are great at giving you a clearer starting point for mortgage shopping. You’ll get a much better sense of what your price range might be instead of a blanket rule of thumb. But they’re only as accurate as the information you provide, so if you forget to add regular budget line items such as food, day care, or gas costs, you won’t get a complete picture.

Your lender may approve you for more than you can realistically afford

Lenders are now legally required to ensure borrowers can “reasonably afford” to repay a loan before they approve a new mortgage. But there’s a difference between being able to reasonably afford something and being able to realistically afford something.

When looking at what’s reasonable, lenders can account for your income and any current debts that you need to repay each month. If you make $5,000 per month after taxes and need to pay $500 toward your car loan each month, a mortgage payment of $1,500 may seem perfectly reasonable.

In this (extremely simplified) example, you’d have about $3,000 per month left over to handle all your other expenses. And perhaps you can afford your living expenses on this budget. But what about the other goals you want to achieve? What about saving for retirement or investing for your future?

If you commit to a large monthly mortgage payment, you may find yourself squeezed to make your remaining money cover your living expenses, plus monthly bills and loan repayments. While a lender can give you a mortgage you can reasonably afford, it comes with the consequence of not being able to handle other financial priorities. In short: Even though you may qualify for a large mortgage, that doesn’t mean you should max out your house budget.

You’re the only one who can determine what’s comfortable

Only you can examine your life and your values to determine what you might be willing to give up to make room in your budget for a mortgage — and what you’re not.

You might be perfectly happy to take on a larger monthly mortgage payment in exchange for reducing meals out, cutting back on luxury vacations, or sticking with your old phone instead of going for the upgrades just because you can. Or you may decide that renting makes more sense for you because you can mitigate costs, take on less financial responsibility, and enjoy more flexibility.

Either way, you need to determine what you feel comfortable with. You need to decide what works within both your budget and your long-term plans to reach goals that matter to you.

Consider these factors to decide how much house you can really afford

Once you set your financial priorities, here’s where you’ll need to do the math:

  • What’s your current income? What are your basic living expenses? What are your fixed costs?
  • How much do you want to put away each month into savings or investments?
  • How much will it cost to maintain your new home?
  • What kind of down payment will you have? (The more you put down, the smaller your monthly mortgage payment will be.)

Now you can factor a mortgage into all of the above, and see how much you can really afford. When doing so, don’t forget to count both the mortgage principal and interest — along with property taxes, homeowners’ insurance, and other extras such as HOA fees.

~ After taking these into account if you still have not been pre-qualified take a look at the mortgage calculator from BankRate.com on the right hand side of this page. ~

MyHome mortgage assistance for first-time homebuyers

From First Tuesday 11/17/15

First-time homebuyers haven’t had much luck in recent decades. Born to disproportionately successful Baby Boomers and entering the job market in a severe economic recession, members of Generation Y (Gen Y), a significant component of the first-time buyer population, struggle with low wages and high debts. These compounding obstacles are delaying Gen Y’s entrance into homeownership.

The California Housing Finance Agency (CalHFA), a small state-operated adjustable rate mortgage (ARM) originator funded by the sale of tax-free bonds, hopes to alleviate part of this struggle with a program called MyHome.

MyHome gives first-time homebuyers assistance to make a down payment that currently may be otherwise out of reach. This program is a variation on the colorfully named “SHAFT mortgage” popular in the ‘80s (more specifically called a “Share Home Appreciation by First Timers” mortgage).

With MyHome, up to 5% of the lower of the home purchase price or appraised value is lent to the buyer as a deferred-payment junior loan to cover the buyer’s down payment and closing costs on the purchase of their first home.

“Deferred payments” may sound particularly appealing to uninformed first–time buyers. However, they likely signify another incarnation of the once common “sleeper mortgage” – a mortgage which initially requires no monthly payments, then explodes into negative amortization and suddenly become due after compounding on a monthly basis unbeknownst to the buyer.

Eligibility for MyHome

First-time buyers seeking help from the MyHome program need to meet eligibility requirements. Buyers need to:

  • be first-time homebuyers;
  • occupy the home they intend to purchase; and
  • be within the MyHome income limits for their county.

The program defines first-time homebuyers as those who have not owned and occupied a home in the prior three years.

Buyers also need to ensure the property they wish to purchase is:

  • within the county’s MyHome sales price limits;
  • on a lot no greater than five acres; and be either
    • a one-unit, single family residence (SFR);
    • manufactured housing on a permanent foundation funded with a Federal Housing Administration (FHA)-insured first mortgage; or
    • an approved condominium subdivision or a planned unit development (PUD).

Buyers are required to complete homebuyer education counseling and meet with a preferred loan officer specially trained in CalHFA programs in order to apply for MyHome assistance.

Too little too late for first-time homebuyers

The broken record keeps scratching away at the same old song: first-time homebuyers are scarce.

Assistance government programs of this nature are merely chatter until the economy enables first-time buyers to earn high enough wages to develop personal savings sufficient to fund their own down payment. Until this occurs, first-time buyers are unlikely to become homeowners. Combined student debt and an inability to save for the historical 20% down payment greatly limits the size of mortgage first-time homebuyers are able to obtain. This is especially prohibitive when the cost of mortgage insurance equaling nearly 1% in addition to interest paid on a first mortgage is added.

Many first-time buyers are wary of the prospect of ownership. Most profess they do not want to incur more debt than they already owe — particularly if the interest rate can suddenly adjust upward. Thus, the prospect of MyHome’s disguised ARM is less than motivating to cautious homebuyers.

California’s homeownership rate hasn’t changed significantly since the conclusion of the Millennium Boom in 2008. It holds steady at 54.4% as of Q2 of 2015, the second-lowest homeownership rate in the country, preceded only by New York. Most first-time buyers are in no current position to change this. Thus, California’s static homeownership levels aren’t going to rise any time soon. Even the advent of mortgage assistance programs like MyHome is of no fundamental financial help.

Home prices are also not expected to decrease until mid-2017, remaining out of reach to many first-timers with minimal savings. However, despite the many obstacles aligned against them, first-time homebuyers remain optimistic about buying a home. For those lucky few who have been able to save their modest wages and are ready to graduate into ownership, programs like MyHome grease the gears for ownership of a home.

Source: “CalHFA launches assistance program for first-time homebuyers,” from The Sacramento Bee

U.S. home prices jump in September by most in more than a year

From Associated Press 11/24/15

U.S. home prices rose in September from a year earlier at the fastest pace in 13 months as a lack of houses for sale has forced buyers to bid up available properties.

The Standard & Poor’s/Case-Shiller 20-city home price index, released Tuesday, increased 5.5 percent in September compared with a year ago, the largest annual gain since August 2014.

Steady job gains and low mortgage rates have propelled a solid rebound in home sales, which are on track to reach the highest level since 2007. The unemployment rate fell to 5 percent in October as employers added the most jobs since December. Borrowing costs have ticked up but remain below 4 percent, a low level historically.

San Francisco reported the largest annual home price increase, at 11.2 percent, followed by Denver at 10.9 percent. Portland had the third largest gain, at 10.1 percent. All 20 cities surveyed reported higher prices than a year earlier.

On a monthly basis, prices rose 0.2 percent in September from August. Prices rose in seventeen of 20 cities from the previous month. They fell in Chicago, Cleveland and Washington, D.C.

Sales of existing homes, while improving, have been volatile this year. They slipped in October after a healthy jump the previous month, according to the National Association of Realtors.

Overall, home sales have increased 3.9% in the past 12 months. At the same time, the number of available homes has fallen 4.5%.

That squeeze has pushed up prices. The typical home sold for $219,600 last month, up nearly 6% from a year ago, the Realtors group said Monday. That is the highest median price for the month of October since October 2005, at the height of the housing bubble.

Home prices are rising at more than double the pace of inflation and much faster than wages, pricing many Americans out of the housing market. That has also pushed up rents as Americans increasingly stay in apartments.

Still, home prices are rising at a much slower pace than the double-digit gains seen in most of 2013. David Blitzer, chairman of the S&P Dow Jones Index Committee, said that the higher prices aren’t out of line with rising rents. That’s a change from the housing bubble, when home prices soared much higher than rental costs.

Several factors are likely holding back the supply of available homes. Many Americans still don’t have much housing equity and as a result would profit little from a sale. That may be delaying them from listing their homes.

In addition, the average rate for a 30-year mortgage has picked up in the past three years. It is currently almost 4%, which is still low. But millions of Americans have refinanced their mortgages at much lower rates and may be reluctant to trade up to a new home because doing so would require taking on a higher mortgage rate.

Developers are also building homes at a historically modest pace. Construction of single-family homes dropped 2.4% in October compared to the previous month, the Commerce Department said last week.

The Case-Shiller index covers roughly half of U.S. homes. The index measures prices compared with those in January 2000 and creates a three-month moving average. The September figures are the latest available.