Mortgage Rates Drop
Concern over the softening housing market brought a slight drop in mortgage rates as July came to a close. But the good news about lower rates was tempered by the bad news in housing.
With building permits at their lowest level in a decade and home sales continuing to fade, the average cost of a 30-year, fixed-rate mortgage fell to 6.69 percent in July's final week, a bit of a dip from 6.73 percent the week before, according to the latest survey by mortgage giant Freddie Mac. The month-ending rate also was a fraction lower than the 6.72 percent average this time last year.
Other key rates also were lower:
- The 15-year fixed-rate mortgage averaged 6.37 percent, down just a tick from 6.38 percent the week before. A year ago, the average was 6.34 percent.
- The average rate of a one-year, Treasury-indexed adjustable rate mortgage was 5.69 percent, down from 5.72 percent the previous week. A year ago, the average was 5.78 percent.
- The five-year hybrid ARM, also indexed to Treasuries, averaged 6.3 percent vs. 6.35 percent in the prior week and 6.35 percent one year ago.
Warning: To ascertain the true cost of obtaining financing, also consider the fees and points charged by lenders. A point is 1 percent of the loan amount. At the end of July, lenders were charging an average of 0.4-0.5 points on the mortgages described above.
Comparing Mortgages
An online mortgage comparison calculator that would-be borrowers can use to contrast monthly payments and the amount of equity they will build up for six types of fixed and adjustable-rate mortgages is now up and running on the Federal Reserve Board's website. The calculator is one of several resources the Fed provides to help consumers make informed decisions when shopping for home loans.
The latest tool allows consumers to look ahead to see how much equity they will build and what their mortgage payments might be three, five, seven or ten years down the road with different mortgage products. The comparison covers 30-year and 15-year fixed-rate mortgages, interest-only fixed-rate mortgages, adjustable-rate mortgages, interest-only ARMs and payment-option ARMs.
In addition to identifying the types of mortgages they are considering, consumers are asked to provide information on home value, primary mortgage amount, second mortgage amount (optional), private mortgage insurance (PMI) premium (optional), estimated interest rates, and expectations about future interest rates (for adjustable-rate mortgages).
The calculator estimates the loan balance in future years, home equity in future years, initial monthly payment (principal and interest), future monthly payments with no interest rate change, and future monthly payments with an interest rate change.
The user-friendly calculator also includes a mortgage shopping worksheet, a glossary of mortgage terms, and links to the Board''s other consumer education resources on mortgages.
Famous Digs
Wrestler Hulk Hogan is selling his palatial French Country-inspired estate in Bellair, Fla., located just west of Tampa. And Dracula could be on the market, too.
The creation of Hogan's 17,145-sq. ft. mansion was a family affair. The wrestler's wife Linda coordinated the venture while his mother-in-law, an interior designer, created an interior fit for a king. His brother-in-law, a builder, was responsible for the contracting work.
Some perks include an in-ground swimming pool, massive gym, a view of the Intracoastal Waterway and the Gulf of Mexico, private docks, two separate garages, and a library featuring hand-carved antique pine paneling and built-in bookshelves. The home is gated and set on nearly two acres.
In the Transylvania region of Romania, meanwhile, Archduke Dominic Habsburg and his family have retained a private investment firm, Baytree Capital, to create a long-term strategic plan for the enhancement and preservation of historic Bran Castle.
The castle has tremendous historical significance, both real and mythical. It is known throughout the world as Dracula's Castle, an association that can be traced back to Irish author Bram Stoker, who used Bran Castle as his inspiration for the settings of his classic 1897 novel, Dracula.
The castle is one of Romania's top tourist attractions, mostly because of its connection to vampires. Archduke Domonic Habsburg's grandmother, Queen Marie, and her family lived in the castle in the early part of the 20th Century. The 700-year-old castle was seized from the family by the communist regime in 1948, and was converted into a museum in the late 1950s. It was returned to the Habsburg family by the Romanian government in 2006.
Cut the Red Tape
More than 150 local communities and organizations have signed on to Housing and Urban Development Sec. Alphonso Jackson's plea to reduce regulatory barriers and unnecessary regulations that are pricing housing out of reach of millions of working families. In an address to the U.S. Conference of Mayors in Los Angeles recently, Sec. Jackson told America's urban leaders that excessive development rules can drive up housing costs by as much as 35 percent.
HUD's National Call to Action for Affordable Housing Through Regulatory Reform encourages cities to re-examine their regulations and, where necessary, reduce or eliminate barriers that effectively drive up the cost of housing beyond the reach of millions of Americans. "Red tape is literally choking the life out of housing that's affordable to working families," Jackson said.
Numerous studies have demonstrated how certain barriers can impact the production of workforce housing. For example, excessive regulations increase the average cost of a single-family home built in subdivisions by $12,000. One place required builders to provide 4.5 parking spaces per home, effectively banning multi-family and senior housing developments. And it is not unusual for some jurisdictions to require at least five years to gain all necessary permits and approvals, significantly raising the costs of development
For it's own part, HUD is reviewing all current federal regulations in the department's program areas to determine if there are any unnecessary, duplicative or obsolete barriers. In addition, for the first time in the Department's history, all proposed regulations now must also be reviewed for their potential impact on affordable housing before taking effect.
Energy Saving Calculator
Ever wondered how much you could save on your monthly home energy bill by replacing your old refrigerator or free-standing freezer with a new energy-efficient model? Or whether it's finally time to retire that spare fridge in the garage or basement -- the one that's even older than the one in the kitchen?
If your fridge was manufactured before 1993, it's probably time to toss it. But just to make sure, check out the new on-line tool -- The Refrigerator Retirement Savings Calculator -- on the Department of Energy's website. It's part of Uncle Sam's Energy Star program, which helps consumers save money on home energy bills by labeling the most energy-efficient products in more than 50 categories.
The calculator can estimate the potential savings from replacing older refrigerators and freezers with new, energy-efficient models. Simply click on the graphic of the old refrigerator. But to get the most accurate picture, have your electric utility bill handy so you can plug in your kilowatt-hour rate. It's also helpful to have the model number of your current refrigerator.
If you don't have the model number, click on "I don't know," and then indicate when your machine was manufactured or purchased, its capacity in cubic feet, and the freezer location.
