You’d have to have been hiding under a rock last month to have missed all the hoopla about legendary Italian designer, Missoni, launching a line of designer goods at Target. The ads were all over TV and magazines for weeks, tempting us with the beautiful, colorful, Missoni signature zig-zag lines on clothing, bedding, dishes – even a Missoni Bicycle!!!!!! My heart had been palpitating for weeks at the thought of a house full of zig-zags!!!!! My fashionable neighbor and I had planned to be at Target at 7:30am, well-positioned to grab a cart and charge through the aisles. We had been forewarned that hordes of women from all over were going to descend on our local Target, grab everything and then sell it all on eBay, for great profit.
One problem: launch date for this limited-time design spree was Super Tuesday – Election Day, and I was working at the polls from 5am until 10pm. Depressed, I faced the gruesome fact that I would miss out on all the zig-zag fun.
With a media blackout at the polls, I missed the news that Targets all over the country were besieged by crowds of nutty women, fighting in the aisles – all the shelves, nationwide were empty by 8:15am!!!!! Target’s website crashed and everything online was immediately sold out, as well! I learned all this from my neighbor, whom I called on my way home that evening. (She was there and managed to snag a bag full of goodies.) I walked into my house, exhausted and deflated at the missed opportunity.
I trudged up the stairs, listless with fashion-depression. I walked into the bedroom, turned on the light, and there on the bed, neatly laid out, was a treasure trove of Missoni zig-zags: dress, sweaters, handbag, blouses, serving platter, laptop case, shoes!!!!! My dear, prince of a man, Howard, secretly set out at 7am and was there among the throngs of women, on his own personal Missoni-mission!!!! I cried. The guy's a keeper.
To show my gratitude, I decided that I will assume lawn-mowing duties for the rest of our lives!!!! Wearing zigzags!!!!!
Christmas 2011 -- Birth of a New Tradition As the holidays approach, the giant Asian factories are kicking into high gear to provide Americans with monstrous piles of cheaply-produced goods -- merchandise that has been produced at the expense of American labor. This year will be different. This year Americans will give the gift of genuine concern for other Americans. There is no longer an excuse ......that, at gift giving time, nothing can be found that is produced by American hands. Yes there is!
It's time to think outside the box, people. Who says a gift needs to fit in a shirt box, wrapped in foreign-produced wrapping paper? Everyone -- yes EVERYONE gets their hair cut. How about gift certificates from your Local hair salon or barber? Gym membership? It's appropriate for all ages who are thinking about some health improvement. Who wouldn't appreciate getting their car detailed? Small, Locally-owned detail shops and car washes would love to sell you a gift certificate or a book of gift certificates. Are you one of those extravagant givers who think nothing of plonking down the Benjamins on a foreign-made flat-screen? Perhaps that grateful gift receiver would like his driveway sealed, or lawn mowed for the summer, or driveway plowed all winter, or games at the local golf course. There are a bazillion owner-run restaurants -- all offering gift certificates. And, if your intended isn't the fancy eatery sort, what about a half-dozen breakfasts at the local breakfast joint. Remember, folks this isn't about big National chains -- this is about supporting your home town locals with their financial lives on the line to keep their doors open. How many people couldn't use an oil change for their car, truck or motorcycle, done at a shop run by the local working guy? Thinking about a heartfelt gift for Mom? Mom would LOVE the services of a local cleaning lady for a day. My computer could use a tune-up, and I KNOW I can find some young guy who is struggling to get his repair business up and running.
Musicians need love too, so find a venue showcasing local bands.
OK, you were looking for something more personal. Local crafts people spin their own wool and knit them into scarves. They make jewelry, and pottery and beautiful wooden boxes. Plan your holiday outings at local, owner-operated restaurants and leave your server a nice tip. And, how about going out to see a play or ballet at your hometown theatre.
Honestly, people, do you REALLY need to buy another ten thousand cheesy lights for the house? When you buy a five dollar string of light, about fifty cents stays in the community. If you have those kinds of bucks to burn, leave the mailman, trash guy or babysitter a nice BIG tip. You see, Christmas is no longer about draining American pockets. Christmas is now about caring, encouraging American small businesses to keep plugging away to follow their dreams. And, when we care about our neighbors, we care about our communities, and the benefits come back to us in ways we wouldn't imagine. THIS is the new Christmas. Spread the Cheer!
* a Friend sent me a version of this recently and I wanted to pass it along
Interest rates fell to new lows in September. Low interest rates increase affordability and should make it easier for buyers to qualify. Yet stories of buyers waiting months to gain loan approval and home purchase transactions not closing on time due to lender's strict underwriting are all too common.
Some buyers are turned down for illogical reasons. For instance, if you have investments -- even if they're performing well -- an underwriter might deny the mortgage because your portfolio doesn't fall into the underwriter's risk assessment model.
One couple was turned down because the husband had worked at his current job for less than a year -- even though he was making more money at the new job than he was before.
These buyers were well-qualified. The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.
Generally, it's more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. For the lowest interest rates, your credit scores need to be in the 700 range. You need to have verifiable income and cash reserves in addition to your down payment and closing costs.
You could run into underwriting problems if you're self-employed, as W-2 income is much easier to verify. Other hurdles are lapses in employment and owning a lot of property. Some lenders won't lend to buyers who have more than three or four residential properties.
If you're buying a new home before selling your current home, you'll need to have 30 percent equity in your current home. This needs to be verified by the lender's appraiser. Also, the lender will want to see a copy of the cashed check from the tenant for the first month's rent to verify rental income if needed to qualify.
HOUSE HUNTING TIP: As soon as you're serious about buying a home, find the best mortgage broker or loan agent you can to assist you. Don't make your selection based on interest rates alone. A good track record counts for a lot.
Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time and that you're not turned down at the last minute, it's worth it.
Be candid with your loan professional about anything in your financial picture that might impact loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you'll need to do to satisfy the underwriter.
Be aware that appraisal issues can impact your loan approval. For example, if a previous owner added square footage without a building permit, the additional square footage probably won't be included as livable square feet.
If the appraisal comes in for less than the purchase price, the lender might not lend you enough to close the deal. Include an appraisal contingency in your contract.
As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. In some cases, conforming jumbo lenders have moved into the market to pick up some slack. You can expect to pay about 0.25 percent more for a 30-year fixed-rate conventional jumbo loan, in some cases. However, today's lower interest rates will help boost affordability.
There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.
THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this. SOURCE: Dian Hymer, Inman News
Better Mortgage Rates Start With Better FICO Scores
If you plan to use a mortgage for your next home purchase, you’ll want to keep your credit scores as high as possible. Credit scores play an out-sized role in determining for which mortgage product you’ll qualify, and to which rate you’ll be assigned by your lender.
The higher your credit score, the lower your mortgage rate will be.
What Is A Credit Score?
History has shown that the best way to predict a person’s behavior over the near-term future is to look at that person’s behavior in the recent past. It’s a concept similar to the First Rule of Physics — an object in motion tends to stay in motion.
We can apply this theory to consumer credit, too. A person who has recently paid his bills on-time should continue to pay his bills on-time in the near-future.
This is the basis of credit scoring; using your past to predict your future.
To mortgage lenders, your credit score represents your likelihood of making on-time mortgage payments for the next 90 days. “90 days” matters because, after 90 days without payments, a homeowner falls into default.
Higher credit scores correlate with lower default risk which explains why people with high credit scores tend to receive lower mortgage rates than people with low credit scores. This is true across all loan types, including conventional, jumbo, and FHA mortgages.
Like most else in finance, those with the lowest risks get to pay the lowest rates.
Lenders Use The FICO Scoring Model, Exclusively
There are three main credit bureaus in the United States. They are Equifax, Experian and TransUnion. Each offers a bevy of credit-scoring products, available for purchase on their respective websites. Prices range from “free” to several hundred dollars.
None, however, are particularly relevant in the home-buying process. This is because the nation’s mortgage lenders rely on a different credit model — the FICO model.
FICO is named for the Fair Isaac Corporation. It was “invented” in the 1950s and has become the mortgage industry standard for credit ratings. Today, FICO scores are omnipresent to the point that people generically refer to all credit scores as “FICO scores”.
This is akin to calling all adhesive bandages “Band-Aids”. FICO is the brand name — not the product.
FICO scores range from 300-850.
Credit Scores Change Mortgage Rates
Your FICO score has always influenced the mortgage rate for which you’re eligible. In 2008, though, it began to change your loan fees.
In response to major mortgage market losses, in April 2008, both Fannie Mae and Freddie Mac introduced something called Loan-Level Pricing Adjustments (LLPA). Loan-level pricing adjustments are “discount points” added to a mortgage rate, based on a specific borrower’s risk to the lender.
A discount point is a loan fee, paid at the time of closing. 1 discount point is equal to 1 percent of your loan size. Example : A $300,000 mortgage that’s assessed 1 discount point will have $3,000 in extra fees due at closing.
Fannie Mae and Freddie Mac know that low credit scores correlate to high default rates so, like an insurance policy, they assigned the highest costs to the highest-risk borrowers.
Assuming a 20% downpayment, look at how discount points change based on credit score. Fees get massive for FICOs under 700.
740+ FICO : There are no discount points required. This loan is “low risk”.
720-739 FICO : 0.250 discount points are charged to the borrower, or $250 per $100,000 borrowed
700-719 FICO : 0.750 discount points are charged to the borrower, or $750 per $100,000 borrowed
680-699 FICO : 1.500 discount points are charged to the borrower, or $1,500 per $100,000 borrowed
660-679 FICO : 2.500 discount points are charged to the borrower, or $2,500 per $100,000 borrowed
Now, not many new home buyers just have that kind of extra cash just laying around. Therefore, as an alternative to paying discount points with cash, many choose to “roll up” the fees into their respective mortgage rates. In general, 1.000 discount point can be “traded in” for a 0.250 increase to your mortgage rate. Example : A consumer with a 680 FICO score is required to pay 1.500 discount points at closing, or can alternatively accept a mortgage rate increase of 0.375%.
This is why it’s important to keep your credit score high. There are real dollar costs for having scores under 740.
Improving On Your Credit Score
If your credit score is not as high as you’d like, the good news is that you can take steps to raise it — sometimes without even changing your spending habits.
