Mortgage Rates Remain Near Recent Lows

Mortgage rates for 30-year financing hit 5.98 percent during the week of October 11th according to Freddie Mac, the lowest rate seen in more than 30 years. Two weeks later borrowers were looking at 6.31 percent.

What caused rates to rise?

With a Wall Street re-bound investors have moved money from bonds to stocks. With less demand for bonds, bond prices fell and interest levels rose. Since mortgage rates tend to mirror 10-year bonds, real estate interest levels also increased.

But the good news is this: While interest levels may not be at the absolute lowest levels seen during the past three decades, rates in late October were still attractive. A year ago a typical 30-year fixed-rate mortgage was priced at 6.64 percent -- a rate good enough at the time to spur a huge refinancing binge.

Check Your Homeowner's Coverage

Costs for homeowner's insurance are rising nationwide. Even worse, in some states individual insurance companies are withdrawing from the marketplace for economic and business reasons.

While insurance companies always face claims -- that's why insurance companies exist -- the economics of the insurance industry have changed. A new liability, mold, has begun to emerge and declines on Wall Street have impacted insurance company portfolios. In effect, some of the money made in the stock market has been used to pay off homeowner claims, but with the market suffering steep drops in the past few years such profits have not been available to insurance companies.

For homeowners, an end to insurance coverage raises two problems. First, you need and want adequate insurance. Second, mortgage lenders require insurance coverage to protect the property during the loan term.

What to do? Speak with your insurance broker. See if your policy is up-to-date in terms of coverage and ask about rate trends in the local area. Of course, if your policy is being canceled, contact your insurance broker immediately for replacement coverage.

Real Estate Sales Remain Strong

It's hard to know whether the economy is expanding, in recession, or just holding still. Everyone has a different measure and no two measures seem to tell the same story.

In the case of housing, however, the current trend is fairly plain: Home sales and prices are up nationwide.

New home sales hit record levels in September, according to the Commerce Department with annualized sales of 1.02 million units. In 2001, new home sales reached a record 908,000 units, according to the National Association of Home Builders, a level likely to be surpassed this year. On the pricing front, a typical new home now sells for $176,300, up 5.9 percent over last year.

The story for existing home sales is much the same:

According to the National Association of Realtors, existing-home sales were 7.8 percent above the pace for September, 2001. At this rate, some 5.4 million homes will be sold this year. No less important, the national median existing-home price was $159,000 in September, up 7.9 percent from a year earlier.

Ladder Safety: Stepping Up The Right Way

It may be bad luck to walk under a ladder, but according to the Consumer Product Safety Commission luck has nothing to do with many ladder mishaps. Each year, says the CPSC, 164,000 people wind-up in hospital emergency rooms because of ladder accidents.

A few prudent safety steps can prevent aches, pains, and big medical bills, including these ideas from the CPSC.

• Make sure the weight your ladder is supporting does not exceed its maximum load rating (user plus materials). There should only be one person on the ladder at one time.

• Use a ladder that is the proper length for the job. Proper length is a minimum of 3 feet extending over the roofline or working surface. The three top rungs of a straight, single or extension ladder should not be stood on.

• Straight, single or extension ladders should be set up at about a 75-degree angle.

• All metal ladders should have slip-resistant feet.

• Metal ladders will conduct electricity. Use a wooden or fiberglass ladder in the vicinity of power lines or electrical equipment. Do not let a ladder made from any material contact live electric wires.

• Be sure all locks on extension ladders are properly engaged.

• The ground under the ladder should be level and firm. Large flat wooden boards braced under the ladder can level a ladder on uneven ground or soft ground. A good practice is to have a helper hold the bottom of the ladder.

• Do not place a ladder in front of a door that is not locked, blocked or guarded.

• Keep your body centered between the rails of the ladder at all times. Do not lean too far to the side while working.

• Do not use a ladder for any purpose other than that for which it was intended.

• Do not step on the top step, bucket shelf or attempt to climb or stand on the rear section of a stepladder.

• Never leave a raised ladder unattended.

• Follow use instruction labels on ladders.

Is Unemployment Insurance For You?

With a change in economic direction, so-called "unemployment" insurance is getting more attention. Such policies will cover a limited number of monthly mortgage payments in the event you lose your job.

If you have an interest in such coverage, speak with your insurance broker. Among other issues, be sure to ask:

1. What's the monthly premium?

2. If you lose your job, when does the insurance kick in? Most policies have a waiting period of several months.

3. Are there situations where you can lose your job and not qualify for payments?

4. Can you get coverage if you're self-employed? Look for a "no" on this one.

5. How many payments will be made under the policy? There's usually a limit, say six to twelve months.

6. What's covered? Mortgage principal and interest? Taxes and insurance? Condo or co-op fees? A first loan only? A home equity loan?

For more articles by Peter G. Miller, please press here.

Published: October 29, 2002

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