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Real Estate's "Wealth Effect" Insulates Against Recession
The home-based "wealth effect" has earned millions of home owners thousands of dollars that are likely to see them well through the recession -- and perhaps ease the recessions' impact on the nation.
According to the "Home Wealth Effect Survey," a report recently issued by the National Association of Realtors, the typical homeowner now has $50,000 in home equity -- $100,000 for households earning more than $75,000. Baby boomers, aged 50 or older, have still more money on the house --
$80,000. In some California and New
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England areas, home-earned equity is still more -- three, four times as much and higher.
While many home owners use that equity to move up to a larger home or buy
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Higher Credit Scores
On The Horizon?
Home buyers and refinancers who've paid all their credit card, mortgage and revolving debts on time could be in for an unexpected bonus: A big jump in their credit scores, opening up the possibility of lower interest rates and fees on future loans.
On the other hand, under important credit-scoring changes now being introduced to major lenders nationwide, some late-paying borrowers can expect painful retribution: significant drops on their scores below where they are today, potentially costing them more money the next time they apply for a mortgage.
These little-publicized credit score changes are part of a new, alternative approach being rolled out by the developer of "FICO" scores, the dominant credit-risk ratings used by mortgage lenders, credit card issuers, auto finance firms, insurance companies, employers and landlords across the country.
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Does Your Closing Date
Make A Difference?
There's a common belief that you can "save" a lot of interest by settling at the end of the month. Is this true? Does it make a difference if you settle at the beginning of the month or at the end?
All mortgage payments are paid in "arrears." This means that any mortgage payment covers the interest owed for the preceding month. It's the opposite of rent payments, which are due in advance.
Since mortgage payments are paid in arrears, your first mortgage payment will always be due at the end of the first full month you took out the loan. Here are two examples:
If you settle in early December, your first full month will be January and your first mortgage payment will be due February 1st -- almost two months after settlement.
If you settle at the end of November, your first full month will be December and your first payment will be due January 1st -- about one month after settlement.
If you settle in the beginning of any month, you will be required to pay the interim interest from the day you settle to the end of the month.
If you settle of the tenth of the month, you would pre-pay roughly 20 days of
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Remodeling? Check
Your Insurance!
You've hired an electrician, selected new tile, countertops and appliances, and have the home improvement loan in order. You're all set for your remodeling project -- or are you?
As you embark on any type of home improvement endeavor, be sure you make a call to your insurance agent to determine whether additional homeowners insurance coverage is needed. And, if contractors or sub-contractors are involved, you'll want to be sure they have the proper insurance so you're not liable for any accidents or damages that may occur while they work on your project.
Check your insurance coverage BEFORE the work begins. If the new work is damaged or destroyed before additional coverage takes effect, you could be responsible for repair costs, according to the Insurance Information Institute.
Daily News and Advice
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