Friday, March 26, 2010

There's No Place Like (a Clean, Healthy) Home

After the cold winds of winter, it's nice to finally open the windows and freshen up the house with the scents of spring. And while opening those windows can feel good, one of the best feelings of spring is getting that clean feeling back. After all, some experts estimate that 40 pounds of dirt can pile up in your home over the course of just one year!

To help you start fresh this spring, this article offers you 10 simple ways to make your house clean and healthy.

Words to Live (and Clean) By

Tip #1: Clean regularly. It sounds simple, but it can be hard to implement and stick to when life gets in the way. There are a few things you can do to make it easier to stick to a regular cleaning schedule. The first tip is to actually design a schedule. Make a plan to tackle some of the biggest projects, like vacuuming or cleaning the bathroom–one each day of the week if necessary. You can also make sure the work is divided between all the members of the house; that way, the work doesn't fall onto one person's shoulders and children learn a sense of responsibility.

Tip #2: Eliminate clutter. One of the quickest ways to keep a clean house is to make sure it never gets too dirty or cluttered. To avoid it, make a point to quickly pick up high-traffic areas (like the kitchen, dining room, and family room) each night before heading to bed. You'd be amazed what a few minutes of straightening can accomplish. In addition, you can also keep a box ready for items that should be thrown away or donated. For more information on eliminating clutter and getting organized, check out our past article on strategies to get organized.

Make the Living Room More Livable

Tip #3: Dust down. Dusting can be a real pain…and can create a big mess with all that dust flying around. To help minimize the mess (and isn't that the goal in the first place?), remember to dust from top to bottom–starting with cobwebs near the ceiling and high shelves.

Tip #4: Buy plants. Plants can be pretty amazing. They help clean the air and constantly breathe oxygen into your home. In addition, they add a cozy, welcoming feeling to just about any room.

Kitchens and Bathrooms

Tip #5: Go chemical free. These days, more and more people are going chemical free for their cleaning products…and for good reason. As we reported last May in our article on toxic-free cleaning, the average household cleaner may include chemicals, fragrances, and dyes that can be irritating to your eyes, skin, and respiratory tract. If that wasn't bad enough, most conventional cleaning products are produced using a petroleum-based formula. That's right, petroleum. For more information on safe, natural cleaning products and for cleaning tips, visit

Tip #6: Freshen towels. Wet towels can be a breading place for mold and mildew. Unfortunately, it's all too common to use the same towel again and again and again. To eliminate the potential problem, remember to change towels after just a few uses. You can also try to hang towels to dry near a heating element immediately after using them.

Windows to the World

Tip #7: Open often. We all like to seal up the house during the cold winter or humid summer days. But when the weather permits, don't forget to open up those windows and get the air moving again to clear out the stale air inside your home.

Tip #8: Clean screens. Most everyone hates doing windows–all those streaks can be a pain. Instead of putting it off, make sure you clean your windows at least every six months, inside and out. When you do, don't forget the screens. Dirt and allergens can really build up on the screens, which means they'll be blowing into your house every time you open your window.

Tip #9: Consider the curtains. Window screens aren't the only things capturing dirt and allergens. If you have heavy curtains that haven't been cleaned in a while, it's probably time for a good cleaning. While they're down, you may want to consider which rooms really need curtains. If you don't need them in a room for privacy or to break the harsh sun, you might consider eliminating the dirt trap altogether.

Final Thoughts

Tip #10: Get help. Let's face it–you're busy. Sometimes, the best step is admitting that you simply can't do it all by yourself. If that's the situation you face, it may be time to consider hiring a little help. The best news is that it doesn't have to cost you a lot of money. You can hire a house cleaner or even a local college student to clean every other week or even once a month. Better still, you can talk to the person about just doing the one or two cleaning jobs that take you the most time or are often overlooked. That way, you can keep the cost down, while keeping your house fresh and clean.

Remember, the best tip to follow is to do a little cleaning every day–even if it's something small. Whether you quickly straighten a room or replace the towels in the bathroom, a few minutes can go a long way to making sure your home is clean and healthy.

Thursday, March 25, 2010

For Clues About The Future Of Mortgage Rates, Watch For Inflation

Inflation is bad for mortgage ratesHomes are more affordable across the nation as the housing market emerges from a slow winter season with mortgage rates still near 5 percent.
Soft housing and low rates are an excellent combination for home buyers but whereas home values rise with a gradual pace, mortgage rates change in an instant.  It's something worth watching.
Each 0.25% increase to conventional or FHA rates adds approximately $16 per month for each $100,000 borrowed. Mortgage rate volatility can change your household budget.
If you're trying to gauge whether rates will be rising or falling, one keyword for which to listen is "inflation". Mortgage rates are highly responsive to inflation.
By definition, inflation is when a currency loses its value; when what used to cost $2.00 now costs $2.15. As consumers, we perceive inflation as goods becoming more expensive.  However, it's not that goods are more expensive, per se. It's that the dollars used to buy them are worth less.
This is a big deal to mortgage rates because mortgage bonds are denominated, bought, and sold in U.S. dollars.  As the dollar loses value to inflation, therefore, so does the value of every mortgage bond in existence. When bonds lose their value, investors don't want them and bond prices fall.  Mortgage rates move opposite of bond prices.

Prices down, rates up.

In today's market, the relationship between inflation and mortgage rates is helping home buyers. The Cost of Living made its smallest annual gain in 6 years last month and the Fed has repeatedly said that inflation will stay low for some time. The combination is driving investors to buy mortgage bonds which, in turn, suppresses rates.

So long as it lasts, the cost of homeownership will remain relatively low. Combined with the expiring tax credit, the timing to buy a home may be as good as it gets.

Wednesday, March 24, 2010

Don't Rush To Refinance That ARM -- It May Be Adjusting To 3 Percent Or Lower

Pending ARM Adjustment March 2010

If your mortgage is set to adjust this year, the smart move may be to let it. Today's conforming mortgages are adjusting lower than ever before -- as low as 3 percent.  It may not be what you expected when you signed for your ARM several years ago.

The reason why ARMs are adjusting lower is because of how they're made.

When conforming adjustable-rate mortgages adjust, they adjust according to a pre-determined formula. The formula is the sum of a constant and a variable.  The constant is usually 2.25 percent and the variable is a daily-changing interest rate called LIBOR.

The formula looks like this:

New Mortgage Rate = LIBOR + 2.250 percent

LIBOR is an acronym for London Interbank Offered Rate.  It's an interest rate at which banks borrow money from each other. In Fall 2008, when Lehman Brothers fell and sparked a global banking fear, LIBOR spiked as the risk of inter-bank borrowing jumped. 

Since then, however, LIBOR is down.

Normalcy is returning to banking and the timing couldn't be better for homeowners with ARMs. 15 months ago, a homeowner's ARM may have adjusted to 6 1/2 percent.  Today, that same ARM falls to just above 3.

As a strategy play, it might make sense to let your ARM adjust. Or, because fixed rates are still near 5 percent, converting that ARM to a long-term fixed-rate product might make sense, too.  The decision is a balance between how low do you want your payment, and how long might you live in your home.  

The longer you stay, the more it might make sense to switch to fixed-rate, even though ARM rates are so low.

If you've got an adjusting ARM, talk to your loan officer about your choices. Once March ends and the Fed withdraws its mortgage market support, mortgage rates may rise and the fixed-rate option may be gone.

Tuesday, March 23, 2010

Geek Gifts : The 16-Piece iPhone Coaster Set

iPhone CoastersYou could call it the Ultimate Geek Gift for an iPhone-toting friend -- or even for yourself. It's a set of 16 coasters made to look like iPhone application icons.

Made by Brazilian firm Meninos, the coasters are constructed from sturdy, medium-density fiber plywood and are coated in vinyl.  They're are roughly 3 1/2 inches square, washable, and feature non-skid, rubber bottoms.

Many of the most popular iPhone icons are included:

  • Maps and Compass
  • Camera and Photo Albums
  • YouTube and iPod

The iPhone coasters sell for $59.99 plus shipping. Arrange them like your phone, or pin them on the wall.  Either way, they'll be a functional conversation piece for your home, or the home of a friend.

Monday, March 22, 2010

How To Refinance When Your Home Is Underwater

Making Home Affordable logoThe Federal Housing Finance Agency has extended the government's Home Affordable Refinance Program by 12 months.

HARP's new end date is June 30, 2011.

Originally known as Making Home Affordable, HARP aims to help homeowners refinance their mortgage who may otherwise be ineligible because of falling home values.

There are 4 basic HARP criteria every borrower must meet:

  1. The existing home loan must be guaranteed by Fannie Mae or Freddie Mac.
  2. Your home must be a 1- to 4-unit property
  3. You must have a perfect mortgage payment history going back 12 months. No 30-day lates allowed.
  4. Your first mortgage balance must be 125% or less of your home's market value

If you're not sure whether Fannie Mae or Freddie Mac back your mortgage, you can look it up. Fannie's website is; Freddie's is  If you don't locate your loan on either website, your mortgage is backed by a third-party and is not HARP-eligible.

For homeowners that meet HARP's criteria, there are some underwriting details of which to be aware.

First, if your original mortgage does not require mortgage insurance, your HARP mortgage will not require it, either -- regardless of your new loan-to-value.

Second, all HARP refinances require income verification. It doesn't matter if your original mortgage was a stated income or no income verification loan. You should expect to produce 1040s and W-2s for your HARP refinance and asset statements, too.

And, lastly, second (and third) mortgages may not be "rolled in" to a new first mortgage loan balance. Junior lien holders must agree to remain in a junior lien position, regardless of combined loan-to-value.

There is a thorough HARP FAQ section on the government's website, but it's for general questions only. For specific Home Affordable Refinance Program information, first make sure you're program-eligible, then pick up the phone to call your loan officer. 

HARP is complex enough that you'll want to talk with a human before taking a proper next step.

Friday, March 19, 2010

Foreclosures Per Capita | February 2010

Foreclsoures Per Capita February 2010

According to foreclosure-tracking firm RealtyTrac, foreclosure filings topped 300,000 for the 12th straight month last month as 1 in every 418 U.S. homes received a foreclosure filing.

It's a small improvement from January and a just 6 percent increase over February 2009.

On a per-capita basis, foreclosure density varied by state:

  • Nevada : 1 foreclosure filing per 102 homes
  • Florida : 1 foreclosure filing per 163 homes
  • Arizona : 1 foreclosure filing per 163 homes
  • California : 1 foreclosure filing per 195 homes

Also, as in January 2010, foreclosures across the country were concentrated. 10 states beat the national Foreclosure Per Capita average; 40 states fell below. Like everything else is real estate, it seems, foreclosures are local.

For today's home buyers, foreclosures represent an interesting opportunity. 

Homes bought in various stages of foreclosure are often less expensive than other, non-foreclosure homes. It's one reason why distressed home sales account for 38 percent of all resales. However, less expensive doesn't always mean less costly.  A foreclosed home may be in various stages of disrepair and they're often sold as-is, as policy.

Buying new or used can be cheaper than buying broken-down.

Therefore, if you're in the market for a bank-owned home, make sure you know what you're buying before you sign a contract. Have qualified professionals review and inspect the property, as needed. Damage to pipes or the property's structure, for example, may not be so obvious on a walk-though and you'll want to know about it before you buy.

Also, foreclosed homes are federal tax credit-eligible. Buyers must be under contract by April 30, 2010 and closed by June 30, 2010.

Thursday, March 18, 2010

15-Minute Fixes For Around The Home

Home maintenance is an ongoing project. There's always something to do around the house, or something to fix. The problem is, you may not have the time, or the skills, to get it done yourself.

In this 4-minute piece from The Today Show on NBC, you'll see some projects are quite simple.

Dubbed "15-Minute Fixes", see how simple it can be to handle 3 common household chores:

  1. De-alcification of a shower head
  2. Clearing hair from the inside of a bathroom drain
  3. Sealing a granite counter-top

Each clean-up job is cheap, quick, and can be handled sans handyman. As Spring Fever sets in, put these fixes on your To-Do List.

Wednesday, March 17, 2010

A Simple Explanation Of The Federal Reserve Statement (March 16, 2010 Edition)

Putting the FOMC statement in plain EnglishToday, the Federal Open Market Committee voted 9-to-1 to leave the Fed Funds Rate unchanged, in its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy "has continued to strengthen" and that the jobs markets "is stabilizing".  It also said that business spending has "has risen significantly".

This is a slight departure from the Fed's January statement in which housing was not mentioned and business spending was said to be "picking up".

It's also the sixth straight statement from the FOMC in which the Fed described the economy with optimism.  This is a signal to markets that 2008-2009 recession is over and that economic growth is returning.

The economy is not without threats, however, and the Fed identified several:

  1. High unemployment threatens consumer spending
  2. Housing starts are at a "depressed level"
  3. Consumer credit remains tight

The message’s overall tone, however, remained positive and inflation is within tolerance limits

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to end its $1.25 trillion commitment to the mortgage market by March 31, 2010. Fed insiders estimate that the bond-buying program lowered mortgage rates by 1 percent since its start.

Mortgage market reaction to the Fed press release is, in general, ambivalent. Mortgage rates are unchanged this afternoon.

The FOMC’s next scheduled meeting is a 2-day affair, April 27-28, 2010.

Tuesday, March 16, 2010

A Rate-Locking Strategy For Today's Fed Meeting

Fed Funds Rate (Feb 2007 - March 2010)The Federal Open Market Committee adjourns from a scheduled 1-day meeting today, its second of the year. 

The FOMC has held the Fed Funds Rate in a target range of 0.000-0.250 percent since December 16, 2008, and the voting members of the Fed are expected to vote "no change" again today.

However, no change in the Fed Funds Rate doesn't necessarily mean no change in mortgage rates.  This is because the Fed Funds Rate is a different interest rate from the rates home buyers get from a loan officer. 

  • Fed Funds Rate : Short-term rate at which banks borrow from each other
  • Mortgage Rate : Long-term rate of interest a homeowner pays on a mortgage

Mortgage rates are more responsive to what the Fed says as compared to what the Fed does. 

After each FOMC meeting, Fed Chairman Ben Bernanke & Co issue a formal press release to the markets.  At roughly 400 words, the statement is a brief commentary on the strengths, weaknesses, and threats for the U.S. economy.

Wall Street watches the statement with great interest and this is why mortgage rates are often volatile on the days of an FOMC adjournment. One mention of a word like "inflation" and traders rush to dump their mortgage bond positions.

Inflation is the enemy of mortgage rates.

After the Fed’s last meeting in January, it told us that the economy had "weakened further", led by steep declines both in housing and employment. Global demand was off, too.  The negative tone of the Fed's statement caused mortgage rates to fall to near an all-time low.

This month, expect a less gloomy message.

Since January, there's been a modest rebound in housing, employment appears more stable, and Retail Sales just posted huge gains.  If the Fed alludes to improvement in any or all three, mortgage rates will likely reverse and zoom higher.

We can’t know what the Fed today will say so if you're floating a mortgage rate and wondering whether to lock, the safe approach would be to do it today, prior to 2:15 PM ET.

Friday, March 12, 2010

Five Ways to Whip Inflation When You Shop at a Warehouse Club

From Kiplinger: For a reliable bargain on everything from dog food to diamonds, head to a warehouse club, such as Costco or Sam's Club. These clubs limit their margins to between 11% and 14%, compared with 25% to 30% at supermarkets and mass merchants, according to Michael Clayman, editor of Warehouse Club Focus, a trade publication. Annual membership starts at $40 at Sam's Club and $50 at Costco. Both clubs offer upgraded memberships, starting at $100 a year, that give you a 2% rebate on the year's purchases.

But you won't save much money if you get sidetracked by the bling and the flat-screen TVs. Here's how to make the most of a trip to the warehouse (and spend the least).

Do your homework. Don't try to bone up on brands and prices amid the kids, the carts and the chaos. Comparison-shop online before you leave home so that you know which products and features you can't live without before you arrive.

Grab the deals. You can always count on finding a small but decent selection of electronics, fancy food, jewelry and brand-name clothing. But the treasures – say, a Kate Spade bag or Ralph Lauren coat – are here today and gone tomorrow. Snap them up right away or regret it later.

Be prepared to do it yourself. You're on your own when it comes to getting that hot tub off the warehouse floor and into your car (order online and the clubs will deliver). You'll do the installing, too.

Watch those portions. Warehouse clubs offer better prices because they sell in bulk. But it's no bargain if the food goes bad – or if you bulk up eating it. Studies show that "people eat more when there's more in front of them," says Ephraim Leibtag, an economist at the U.S. Department of Agriculture. The only way to save money and your waistline is to resist the temptation to race through an entire tub of rocky road.

Gauge gas prices online. Warehouse-club deals on gasoline are good but not always the best. Before you drive ten miles to Costco – and waste more gas while you spin your wheels waiting in line – check local gas prices at

Thursday, March 11, 2010

How To Properly Screen A Prospective Tenant

According to the the National Association of Realtors®, "distressed homes" represented nearly 2 of every fifth home sold in January 2010.  Clearly, real estate investors are taking advantage of good deals on cheap property.  But there's risk involved.

This NBC Today Show interview first ran in March 2009, featuring real estate expert Barbara Corcoran. Despite its age, the message remains relevant. Today may be a terrific time to buy a bank-owned home -- just make sure you do your research first.  There's plenty of ways for investors to get burned.

Some of the tips in the video include:
  • Buy in your own backyard
  • Start small, then build to a bigger portfolio
  • Watch receipts -- rent rolls don't matter if tenants aren't paying rent
Corcoran also gives pointers on how to evaluate a prospective tenant.

Foreclosures should represent a large number of 2010's total home sales and will offer interesting opportunities to bona fide real estate investors. Before you jump in, make sure to watch the video. The rents you save may be your own.

Remember, the stats and the data are from 12 months ago, but the advice stays meaningful.

Wednesday, March 10, 2010

Where Are Rates Going Now?

Important Deadlines on the Horizon
Two years ago, the Washington Post reported that home loan rates shot up to nearly 7% from 6% in less than a week. The volatility demonstrated that week resulted from turmoil in the financial markets and a lack of buyers for mortgage backed securities (MBS).

That volatility continued through November 2008 when the Federal Reserve announced a program designed to lower rates and provide stability to housing. That program has been incredibly successful, driving rates to the lowest levels of all time. However, as this program will end March 31st, people want to know: Where are rates going now?

Looking for Clarity
Mortgage rates are tied to the price of MBS and like other fixed income vehicles similar to U.S. treasuries, the higher the demand and price, the lower the corresponding rate or yield will be. Therein lies the issue. Throughout 2009, the Federal Reserve was the primary buyer for MBS, purchasing as much as 80% or more of all MBS issued in any given month.

The concern is that when the Fed concludes the program, who will step in to pick up the supply of mortgages for the rest of 2010 and beyond. If investor interest is scarce, look for rates to rise. Also, filling the hole with avid buyers is not the only potential headwind facing MBS and other fixed income investments.

Think About It this Way
Throughout the boom years of real estate, homeowners could just about set any price they wanted when the time came to sell their property. In many cases, simply putting a sign in the front yard would bring multiple offers, driving the price of the home up.

The Federal Reserve has acted in this capacity, supplying heated buying interest for the last fourteen months, in essence, setting the price of MBS and keeping interest rates low. When the Fed stops buying in April, the concern that exists isn't so much that there won't be buyers for home loans but what price those buyers will be willing to pay. The lower the price that new MBS buyers settle on, the higher the rates that consumers will have to pay.

Little Consensus Among Experts
Up until now, the predominant opinion of economists and financial pundits has been that interest rates will rise. The only disagreement has been to what degree and how quickly rates will do so.

On one extreme, David Greenlaw, chief fixed-income economist of Morgan Stanley, expects that rates could climb by more than two points before year end. On the other hand, CNBC has recently paraded people before the camera with the opinion that rates may remain closely unchanged.

Mr. Habib holds fast to his original assertion though that home loan rates are set to rise. "Interest rates for a 30 Year Fixed Rate could rise to 6% by year end and consumers need to be prepared for that." Habib goes on to state that MBS are similar to other fixed income investments that are subject to inflation risk. Inflation erodes the value of bonds and forces rates to rise.

Inflation risk exists not only from the possibility of an improving economy but also increased debt coming from the U.S. Treasury to support stimulus packages and the budget.

One More Thing to Consider
The purchasing of MBS by the Fed does not occur immediately after a loan closes. Several weeks must pass after the consumers close on their mortgages before they can actually be delivered, packaged and sold to investors like the Fed. Because of this, many people anticipate that any potential move higher in rates may not occur until April 1st, after the conclusion of the Fed program.

Habib states that this is not the case for many reasons. Rates have already started to move higher over the past few months, and will likely increase a bit more after the Fed stops buying – not just because the largest buyer is absent, but because speculators will be less confident and unload their positions ahead of the deadline. This gradual increase combined with what we've already seen will be meaningful, and as the year progresses, rates will oscillate higher still. It's like walking up a long don't realize how high up you are, until you turn around and look down.

What Now?
If you are a candidate for refinancing your mortgage, call your mortgage professional today to lock in your best opportunity for a low rate. In addition to the potential for rates to rise, there are also other programs in place...that are scheduled to end in assist people who otherwise could not refinance due to loan to value.

For prospective home buyers, any increase in interest rates erodes your purchasing power. In other words, a 1% increase in rate represents an approximate decline in purchasing power by 10%. For example, if rates increase by 1%, people who qualify for a $200,000 purchase price today may only qualify for a purchase price of $180,000 afterwards.

For those who qualify for the tax credit for first-time and repeat home buyers, another deadline also exists. The last day to obtain a contract to qualify is April 30th and closing must occur by the end of June. Miss either deadline and it could cost you up to $6,500 or $8,000, depending on eligibility.

No matter which way you look at it, waiting could cost you. Mortgage rates are still near the best levels we have ever seen. If you are in the position to move forward with obtaining a mortgage, the best decision would be to act sooner rather than later.

Tuesday, March 9, 2010

Tying Friday's Jobs Report To Rising Mortgage Rates

Unemployment Rate 2008-2010Conforming and FHA mortgage rates have improved over the last 10 days, but that could all change this Friday with the release of February's Non-Farm Payrolls report.

Non-Farm Payrolls is the official name of the government's monthly jobs report and, given the fragile state of the U.S. economy, Wall Street will be watching it closely.

Mortgage rates could spike come Friday morning.

Jobs are an important part of the nation's recovery. Among other concerns, unemployed Americans don't spend as much money on goods and services, and are more likely to default on a mortgage. This retards economic growth and increases the potential for foreclosures.

When jobs numbers worsen, therefore, it follows that economic projections worsen, too.

Poor employment figures draw money away from the stock markets and into less-risky bond markets, including mortgage-backed bonds.  Mortgage rates improve as a result. Conversely, when jobs numbers improve, stock markets gain and bond markets worsen.

Analysts expect that a net 30,000 jobs were lost in February.

The Bureau of Labor Statistics press release hits at 8:30 A.M. ET, roughly an hour before Friday's mortgage pricing will be available to consumers. If you're worried about rates rising on the heels of a strong jobs report, therefore, be sure to get your rate lock in today instead. Once Friday gets here, it may be too late.

Monday, March 8, 2010

Managing Stress

Managing Stress
Sleep Your Way To Success!You've probably heard the saying from Ben Franklin that, "Early to bed, early to rise makes a man healthy, wealthy, and wise." Of course this is great advice, but did you know that there are some important scientific reasons why? Check out what Ingo LogĂ©  a clinical nutritionist and lifestyle educator who specializes in the creation of individual lifestyle and nutritional programs has to say.

These days, too little sleep and too much stress are common problems for many of us.
Early to Bed:
When you stay up past 2:00 am, be it partying, working the night shift or getting up to care for infants, you'll start displaying nervous system fatigue. This often shows up as headaches, muscle twitching in the face and around one or both eyes. Additionally, anyone that misses the optimal sleep cycle, even if they sleep later into the morning, will not get the same degree of restoration as if they had gone to bed by 10:00 pm because the repair cycles are driven by solar, lunar and terrestrial forces, which really don't care about what shift you work or late night TV! When this continues, even for a few days, this is when the caffeine/sugar cycle can really sink its claws into you.

Here are some tips to help you get to bed by 10:00 pm so you don't miss your body's natural repair cycles:
  • Get up with the sun. I recommend rising at 6:00 am in the beginning because that way you will naturally be fatigued by the time 10:00 pm rolls around. Early rising is better for the body than late-night activity if you need to get more work or studies done.
  • Dim the lights in the house about 2 hours before bedtime. If possible, use natural bees wax candles. Typical electrical lighting is very stimulating to the part of the brain that is both light and time sensitive. Remember, electric lights appeared very recently in our evolutionary history. They trick your brain into thinking that the sun is coming up at midnight and your body into releasing stress hormones to prepare you for another day's work! That really disrupts sleep patterns.
  • Try using some essential oils. Oil of lavender is great in bath water or mixed with some cream and massaged into the front of the neck, stomach, along the spine and in the groin region as well as on the feet. Mountain Rose Herbs makes great oils, and they have a special blend called Sleep Ease Oil which, when rubbed behind the knees, works well for aiding your sleep.
  • If you can tolerate milk, warm organic milk helps release the neurotransmitter tryptophan, which often makes people drowsy. You'll know if you cannot digest dairy products well or are lactose intolerant if you suffer from bloating, abdominal cramps, nausea, gas and diarrhea within 30 minutes of eating a dairy product. You may also wake up with a stuffy nose and excess sleep in your eyes after eating dairy as well.
  • Try unplugging all electrical devices in your room for a few nights. The electromagnetic pollution from electrical devices keeps a lot of people from sleeping well.
  • Leave your window partially open at night so that you can keep fresh air in the room and don't let the room get too warm either. People typically sleep best when there is fresh air in the room and it's about 60-65 degrees. If it's too warm, you will sweat and feel stuffy and that's a form of stress to the body. Again, out come the stress hormones and goodbye deep sleep.
  • There are some excellent music selections that will help you sleep these days, too. I find nature sounds helpful. Most music stores have a section of music to help people relax and sleep. Keep the volume low enough that it's not disruptive. In my experience, the right music can work like a charm!
  • Shower or bathe before bed. Coming to bed clean and fresh has a relaxing effect
  • Make sure the windows are well covered. Even the smallest amount of light can wake some people up. This is one of the most common causes of premature awakening. Streetlights, flashes of light from cars driving by, and the sun rising in the morning can all put an end to a lovely sleep in a flash.

Friday, March 5, 2010

Tax Tips for 2009

Good News about Last Year's Taxes
April 15th is less than six weeks away and we all know what that means. If you've yet to visit your accountant or tax preparer, there are some new tax laws, as well as a few old ones you need to know about. But, don't worry. All of the information we're going to share falls under the category of "good news".

Back again for his yearly tax-time advice is Trevor Rice, a certified public accountant and shareholder with Stern, Kory, Sreden and Morgan, AAC in Stevenson Ranch, California. Considering that Rice's appointment book is filling up quickly, we thought it would be a good idea to get him talking about some of the more favorable changes regarding our taxes from last year.

For Individuals
"With a lot of people struggling and finding themselves in survival mode," Rice says, "Our government is responding with help in the form of new tax laws."

According to Rice, the biggest benefit in terms of tax relief is extended to those who are losing their homes to either foreclosure or short sale. He says in the past, the amount forgiven by the lender could have been considered taxable income. Under the current law, up to $2,000,000 of cancelled debt can be excluded from being taxed.

Rice warns there are some provisions to the law. For starters, it ONLY applies to your principal residence. It also ONLY applies to the debt incurred from either buying the house, or from making upgrades and repairs. In other words, drawing from your equity line to pay off a credit card may still be taxed. Rice went on to say if you are deemed insolvent (the value of your total assets is less than your debt), you might be able to exclude ALL of the cancelled debt.

With this and every other tax law we'll talk about, Rice asks you to check your state laws, and consult with your CPA or tax preparer. While they will apply to your federal income taxes, they are not guaranteed to apply to your state taxes.

The next great tax break is for first-time home buyers, as they are eligible to receive an $8,000 refundable tax credit. Before we go any further we should make it clear that anything labeled a "tax credit" is a dollar for dollar reduction of your tax. Anything labeled a "deduction" is something that reduces your tax based on your income tax bracket.

You should also be made aware the term "first-time home buyer" is defined as anyone who has not owned a principal residence in the last three years. However, the provisions for using this credit on your 2009 taxes include entering into a purchase contract no later than April 30, 2010 and closing the transaction by June 30, 2010. It only applies to homes up to $800,000 in cost, and if you are a high-earner you may not qualify.

Along the same lines for homeowners in 2009 is an existing home buyer tax credit. This is a $6,500 credit for anyone owning a home as a primary residence, five out of the last eight years, but is looking to buy a new home. The same deadline dates for first-time home buyers apply to this credit as well. High-earners may also not qualify.

There's some good news, Rice says, for anyone who made energy-efficient improvements to their home in 2009. A $1,500 tax credit (30% of the first $5,000 spent) is available. Some examples would include the installation of energy-efficient windows or doors, insulation, a new furnace, or water heater. In the case of solar energy upgrades, the credit is thirty percent of the total cost, with no limit!

For anyone who has a child in his or her first four years of college, there is a new $2,500 credit. Also new is that forty percent of this credit is refundable. In other words, if the $2,500 credit exceeds the amount of your tax, forty percent of the difference can be refunded. There are a few exceptions to this credit, so make sure you check with your accountant.

For Businesses
"There are a few changes for business taxes this year," says Rice, "But the biggest are for businesses suffering losses." According to our expert, a business that shows a loss in 2009 has the ability to carry that loss as far back as 5 years and recoup taxes paid in any one of those years. The one provision, he says, speaks specifically to that 5th year, when you can only recoup up to 50 percent of the taxes paid. The trick he claims is for your accountant to look for the best year to apply that deduction.

Bonus depreciation is another law that businesses can use to their advantage. This law allows you to deduct fifty percent of the cost of new equipment purchased in 2009. One of the benefits to this deduction is that you can still use it even if your business suffered losses last year. Rice says that this law has been in existence, but it was supposed to expire in 2008. Thanks to our lawmakers, it has been extended to 2009.

Another law that has been extended from 2008 to 2009 is commonly known as "Section 179 Depreciation". This provides business owners the ability to deduct up to $250,000 of new equipment in one year. Prior to 2008, the amount was limited to $125,000.

Rice closed out our discussion by telling us there are many new tax laws, so involving a CPA in the process of filing your taxes is highly important. Equally as important, he says, is to inform your CPA anytime you have something of major importance going on in your life. This would include buying or selling a home, getting married (or divorced), and having a child. Rice says events like these will always affect your taxes in some way. The key is early intervention, as it allows for the most strategic planning.

Thursday, March 4, 2010

Existing Home Sales Drop Again In January But Stay On The Trendline

Existing Home Sales Jan 2009-Jan 2010The winter months have not been kind to home sales.

After plunging 17 percent in December, Existing Home Sales fell by an additional 7 percent in January, according to the National Association of Realtors®. An "existing home" is a home resold by a previous owner (i.e. not new construction).

In looking at the annualized, adjusted Existing Home Sales data, we find:

  1. Sales volume is at its lowest levels since June 2009
  2. Sales volume fell below its 12-month rolling average
  3. Home supplies are at a 5-month high

These are similar findings to the New Home Sales data issued by the government last week.  That report put new home sales at a 40-year low and showed new homes supplies higher by an entire month.

But don't think housing rebound has halted! Home sales are cyclical and there are outside forces on today's market.

For one, the market is still feeling the after-effects of the original First-Time Home Buyer Tax Credit. Sales spiked in the months leading up to the original November 2009 expiration date. A pull-back is natural and expected.

Looking at the long-term trend, Existing Home Sales volume appears right in line.

Furthermore, weather across much of the U.S. was awful in January. That, too, can impede home sales as homes are neither shown nor negotiated when weather is majorly inclement.

Anecdotal evidence is showing sales activity higher through February and into March. And, although it's unlikely we'll see a spike through April like we did last November, buy-side demand for homes should remain strong. The good news of the sagging sales reports is that today's buyers may find home prices are lower and sellers are more willing to negotiate.

Wednesday, March 3, 2010

Favorite Thing

Many of you know, I am just returning from a vacation in Hawaii.  What was my favorite thing?  Here it is!  I am the one in the back with my feet dangling and I am driving the glider.  What an amazing thing to do.  Loved it!  Can't wait to go up again.

Cool Tools : Color This! Shows How Paints And Colors Will Make A Room Look Good

Color swatches for paintVisualizing a home in different colors can take a good eye and strong imagination -- especially when you're house-hunting and the home's effects are of someone else.

Yet, we wonder:

  • What would the bedroom look like in blue?
  • How would the kitchen look in yellow?
  • What if the foyer wall was accented in red?

At the Better Homes and Gardens website, you can answer those questions and see the results for yourself.  Using the Color This! tool, website visitors can mix-and-match swatch colors, then apply them to a room's walls, floors, trim, cabinets and accessories.

Don't just get a mental picture of a room -- get an actual picture.

The Better Homes and Gardens site requires a basic, non-intrusive site registration to use the Color This! product suite.  It's also available for home exteriors and window treatments, too.

Tuesday, March 2, 2010

PODS now available through ERA

PODS storage industry is now a member of the ERA Preferred Alliance program, providing cost-effective solutions to moving and storage concerns for sellers. PODS has partnered with ERA, to offer services and special discounts to customers of ERA who need to move or de-clutter their house for sale. The PODS portable containers can be placed in a homeowner’s driveway during the de-cluttering or moving process, and then stored in a PODS Storage Center for as long as needed or moved to the homeowner’s new residence.

PODS is one of the most uncomplicated and flexible solutions in the moving and storage industry. It could be the answer to some of your concerns.

Monday, March 1, 2010

As The Supply Of New Homes Grows, So Does The Opportunity For A "Good Deal"

New Homes Supply Jan 2009-Jan 2010

The housing recovery showed particular weakness in the New Homes Sales category last month -- good news for homebuyers around the country.

A "new home" is a home for which there's no previous owner.

New Home Sales fell 11 percent from the month prior and posted the fewest units sold in a month since 1963 -- the year the government first started tracking New Home Sales data.

Right now, there are roughly 234,000 new homes for sale nationwide and, at the current sales pace, it would take 9.1 months to sell them all. This is nearly 2 months longer than at October 2009's pace.

The reasons for the spike in supply are varied:

  • The original home buyer tax credit expired in November
  • Weather conditions were awful in most of the country in January
  • Weak employment and consumer confidence continue to hinder big ticket sales

Now, these might be less-than-optimal developments for the economy as a whole, but for buyers of new homes, it's a welcome turn of events. Home prices are based on supply and demand, after all.

As a result, this season's home buyers may be treated to "free" upgrades from home builders, plus seller concessions and lower sales prices overall.

It's all a matter of timing, of course.  New Home Sales reports on a 1-month lag so it's not necessarily reflective of the current, post-Super Bowl home buying season.  And from market to market, sales activity varies.

That said, mortgage rates remain low, home prices are steady, and the federal tax credit gives two more months to go under contract. It's a favorable time to buy a new home.