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Bond Yields Inch Up, Bringing Rates With Them
In Freddie Mac's results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 6.17 percent for the week ending December 27, 2007, up from the previous week when it averaged 6.14 percent. Last year at this time, the 30-year FRM averaged 6.18 percent.
"Stronger consumer spending and an increase in the core price deflator in November caused long
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term bond yields to inch up, with mortgage rates following," said Frank Nothaft, Freddie Mac vice president and chief economist.
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Reducing Utility Costs
Perhaps the biggest waste of energy is when heat escapes through leaks in windows, doors, fireplace dampers, ducts, wires, and pipes. A well-sealed home is an energy-efficient home that can save you as much as 10 to 15 percent on your heating bill. To make sure your home isn't losing heat through leaks, be sure to check the caulking and weather-stripping.
Fireplaces are wonderful and bring in a lot of warmth when they're in use. However, when a fire isn't burning you'll want to make sure that your damper is closed -- otherwise a lot of heat escapes.
If you're leaving your home early in the morning, despite the temptation to leave the heater running so that you'll have a cozy home when you return, turn down the thermostat before you head out.
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Three Places to Find Money for a Down Payment
Buyers who don't have a 20 percent down payment are finding it harder and harder to buy a home. Here are some sources of money that are still available.
Borrowing from a 401(k). Only some companies allow this. The maximum available is $50,000 ($100,00 if both spouses have 401(k)s) and the loan must be repaid within five years.
Withdrawing up to $10,000 from an IRA for a purchase of a first home. A potential borrower who hasn't owned a home in the past three years is considered a "first-time buyer" for this specific purpose.
A gift. If buyers are comfortable asking for money, their parents, friends, and relatives can give a gift toward the down payment.
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Credit Score Primer: What Buyers Need to Know
In the wake of the credit crisis, lenders have become much pickier about whom they lend to.
Here are some basic facts that will help potential borrowers understand what they face.
The measurement that most lenders use to assess applicants' credit risk is the FICO score developed by Fair Isaac Corp.
The score ranges from 300 to 850.
There's not one FICO score. Buyers have three: one for each of the three credit bureaus, Experian, TransUnion, and Equifax.
Each credit score is based on information the credit bureau keeps on file. Since credit bureaus don't share their data with one another, the three FICO scores may differ, sometimes by as much as 100 points.
The components of a FICO score are:
Payment history: 35 percent
Amounts owed: 30 percent
Length of credit history: 15 percent
New credit: 10 percent
Types of credit used: 10 percent
A consumer with a 580 credit score might qualify under FHA requirements. However, in order to qualify for a prime loan, generally a borrower must have a credit score above 620 for a conventional loan and above 720 for a loan at terms and rates most borrowers would consider desirable.
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