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Monday Morning Mortgages>
Monday Morning Mortgages
February 16, 2010
Rates to Rise
Unless you are living under a rock, you understand that mortgage interest rates cannot remain this low much longer. Federal Reserve Chairman Ben Bernanke announced in remarks to the House of Representatives last week that the central bank will begin to raise the Federal discount rate. The discount rate is the rate that the Fed charges banks when it lends the banks money. This rate directly affects prime rate offered by banks to consumers and many consumer loans. It generally doesn’t affect 30-year mortgage rates directly, though all monetary policy affects rates eventually. Current discount rate is 0.5% and prime rate is 3.25%. This is a huge steering tool for the Fed to control inflation. If rates rise, it cools down investment and borrowing and slows down demand, hence relieves inflation pressure. Why would the Fed want to slow the economy right now? They don’t want a slower economy, but at some point the economy is expected to dig in and begin to support itself, and raising rates (along with winding down stimulus aid) will allow the natural rhythms of the markets to take back over. The whole process will be conducted slowly and carefully to avoid breaking the fragile recovery. At some point, investments need to begin offering a higher return than current rates are giving.
So anyone with a mortgage interest rate 5.75% or above and enough equity to qualify for a refi should have done or be doing a refi analysis. Not much more time to sit on the sidelines.
Re-Use Resources
I learned last month that buying a brand new solid core door at the hardware store is an expensive proposition. I WISH I had these resources available to me then! Choose to re-use materials before buying new to benefit the environment and your pocketbook.
ReStore is located in Railroad Square in Santa Rosa. As a non-profit for Habitat for Humanity, ReStore takes donations of unused building materials from construction jobs. The donator gets a tax deduction, and the shopper gets to sort through available building materials like doors, tile and paint to find a reasonably priced treasure.
ReStore
24 10th St @ Cleveland Avenue, Santa Rosa
Tuesday 10am-4pm
Wednesday - Friday, 9am to 5pm
Saturday 9am to 4pm
(707) 568-3228
Ray's Trading Co. has a hodge-podge of building materials (this is where Carol got her $10 door) and fixtures for the home and property; cabinets, gates, tubs, vintage items). Find this theme park of re-use on hwy 116 between Cotati and Sebastopol.
Ray's Trading Co.
3570 Gravenstein Hwy. South Sebastopol
Thursday – Saturday 9:30am – 5pm
(707) 829-9726
RecycleTown at the Dump is the ultimate adventure where you can find just about everything you can imagine or need. The Recycle Town in Petaluma is pretty extensively filled with usable items saved from or donated to the dump. Building materials include doors, windows, sinks, tubs, toilets, roofing, gutters, pipes, fittings and lumber. Household items include clothes, books, toys, lamps, pots and pans, small appliances, furniture, desks, tables, bookshelves. There are electronics;
computers, printers, stereos, TV's, VCR's and answering machines. You can also find lawnmowers, bicycles, motor bikes, car parts and tools.
Recycletown at the Central Landfill – www.garbage.org
500 Mecham Road Off Stony Point Rd South, Petaluma
Monday – Saturday, Closed on Sunday
7 am to 2:30 pm
707.795.3660
Petaluma dump also sponsors the Santa Rosa Garbage Reincarnation Thrift Store on Sebastopol Rd.
Garbage Reincarnation Thrift Store
949 Sebastopol Road, Santa Rosa
Monday - Friday 9 am - 5pm
Saturday 10 am to 5 pm
707.888.8257 or 707.527.0770
Healdsburg has its own Recycletown that I haven’t seen yet, but sure that this would be a most excellent outing. With all the money you save, you can dine in Healdsburg for lunch.
Recycletown-Reuse-Recycling - www.garbage.org
166 Alexander Valley Road, Healdsburg -
Monday - Saturday
8am to 4 pm
(707) 433-0321
Most of us are familiar with that excellent resource Craigslist that posts home re-use categories like furniture, appliances, materials, “free”, household, and tools.
www.craigslist.org
You can register for Santa Rosa Freecycle(TM), “where one person's trash is another's treasure!” This is a yahoo group for local-specific communities whose goal is to reduce waste by connecting people who are throwing away unwanted items with others seeking the same items (and have a little fun in the process). Here is the link.
http://groups.yahoo.com/group/SantaRosa_CA_Freecycle/
FHA Update
I just attended an extensive training on FHA updates. I will be incorporating lender specific restrictions on FHA programming in my next Finance 101 the last Friday in February. 1:00 – 2:00pm at the Century 21 training room. Get up to speed on the latest FHA news.
FHA Anti Flipping Waiver
Lenders are just beginning to accept the FHA anti-flipping announcement of January [(24 CFR 203.37a(b)(2)], But remember; if the new price is over 20% increase in price from last transfer, be prepared for double appraisals, building inspection, and proof of renovation expenses to support increase in price.
Santa Rosa Vehicle Abatement
This service is supposed to be functional despite budget cuts. Call to report abandoned or illegally parked vehicles, vehicle parts or boats in Santa Rosa Monday – Thursday (707) 543-3594 and leave a message.
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