Mortgage Rates Hit New Lows

This wasn't supposed to happen, at least according to some seers, soothsayers and economists. By now we should be seeing higher mortgages, it was said, because of rising oil prices, looming conflict in the Middle East and government deficits at the state and federal level.

And yet, somehow, rates remain low by the standard of the past few decades. In late February, for example, Freddie Mac reported that a typical 30-year fixed rate loan was available for 5.84 percent with an average 0.6 point -- "setting yet another record low."

Will this continue? No one knows -- but for the moment at least, money to buy or refinance real estate is plentiful and inexpensive by recent standards.

New and Existing Home Sales Remain Robust

While much of the economy has slowed, real estate sales remained strong at the end of 2002. Figures from the National Association of Realtors show that single-family, apartment condominium and co-operative sales, rose in 45 states and the District of Columbia.

Not only were unit sales strong, prices also continued to rise in most areas. A survey of 120 metropolitan statistical areas by NAR showed that 39 had double-digit price increased suring the year while 10 areas posted declines. The national median existing-home price was $161,600 in the fourth quarter, 8.8 percent higher than a year earlier when the median price was $148,500. The median is a typical market price where half of the homes sold for more and half sold for less.

In a similar vein, new home sales reached a seasonally-adjusted annual rate of 1.85 million units in January, according to Commerce Department figures. The National Association of Home Builders says "this marks the fastest pace of housing construction in 16 years, including the best single-family production in 24 years."

Have You Checked Your Property Taxes Lately?

With most mortgages today, the lender collects money not only for monthly interest and principal payments, but also for home insurance and property tax payments. The money is kept in an "escrow" or trust account for your benefit.

In the usual case you will receive information from your insurance carrier that the premium has been paid and outlining the coverage provided by your policy. Also, the local government will send out a form listing property taxes and showing that they have been paid by your mortgage lender.

However, with millions of loans outstanding, it sometimes happens that tax and insurance payments are not made on a timely basis or not made at all. It can also happen that such bills have been paid but not properly recorded. The problem is that as a homeowner you want taxes paid to avoid foreclosure, you want insurance in place in case of disaster, and you want to avoid late fees.

Because of the need to make full and timely payments for taxes and insurance, it's a good idea to keep any notices you receive showing that payments have been made. Also, in a growing number of jurisdictions you can check your property tax account online, something to do once or twice a year.

Do You Have Emergency Supplies?

Recent calls for duct tape and plastic sheeting in every home raise a serious issue: Are you prepared for an emergency?

While the national focus has been on terrorism, every household should have a stock of emergency supplies for such mundane problems as downed power wires and interrupted water supplies.

What's reasonable and what's appropriate? That's an individual judgment: While some households are prepared to live "off the grid" for years on end without any ties to community infrastructures, most of us will want supplies for at least a few days. According to the Federal Emergency Management Agency (FEMA), good items to have include:

• A supply of water (one gallon per person per day). Store water in sealed, unbreakable containers. Identify the storage date and replace every six months.
• A supply of non-perishable packaged or canned food and a non-electric can opener.
• A change of clothing, rain gear, and sturdy shoes.
• Blankets or sleeping bags.
• A first aid kit and prescription medications.
• An extra pair of glasses.
• A battery-powered radio, flashlight, and plenty of extra batteries.
• Credit cards and cash.
• An extra set of car keys.
• A list of family physicians.
• A list of important family information; the style and serial number of medical devices, such as pacemakers.
• Special items for infants, elderly, or disabled family members.

A complete emergency checklist can be found at: http://www.fema.gov/rrr/emprep.shtm.

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

Published: February 25, 2003

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