In honor of Independence Day, here are 13 little-known bits of trivia about the United States constitution, courtesy of constitutionfacts.com:The first constitution was not known as the Declaration of Independence.  It was called the Articles of Confederation. The U.S. Constitution has 4,400 words. It is the oldest and shortest written Constitution of any major government in the world. There are spelling errors throughout the Constitution, but the misspelling of the word "Pensylvania" above the signers' names is a notable one. Thomas Jefferson did not sign the Constitution. He was in France during the Convention, where he served as the U.S. minister. The Constitution was "penned" by Jacob Shallus, a Pennsylvania General Assembly clerk, for a fee of $30. The entire Constitution is displ... 07/03/2007

The Fed left the Fed Funds Rate unchanged again today for the eighth time in a row after 17 consecutive hikes.  None of this is news to us.The Fed's press release, though, highlights a key theme about our country's economy:  inflation may be moderating, but we are far from in the clear.  In other words, there are still a handful of outside factors that could push the Fed back out of their "comfort zone" and force them to raise the Federal Funds Rate.Mortgage rates were up only slightly after the Fed's remarks which were neither tough nor soft on inflation and the economy.SourceParsing the Fed StatementThe Wall Street Journal OnlineJune 28, 2007http://online.wsj.com/mdcapp/public/page/2_3024-info_fedparse_shell.html 06/29/2007

You know you should check your credit report to see if your identity has been stolen. If a thief obtains your Social Security number, they can establish credit cards in your name, borrow money and make purchases - all without you realizing it.And yet, millions of people have never checked to see if their identity has been stolen. You know why? Because they can't read, have no access to a telephone and don't know how to use the Internet.I'm not talking about immigrants. I'm talking about three-year-olds. In fact, I'm talking about your three-year-old. Your teenagers, too, and your grandchildren.All the pundits offer advice on how you can safeguard your Social Security number. But what about your kid's Social Security number? Most every child gets a Social Security number shortly after bi... 06/27/2007

From the CBS News Video Web site, an interesting story for anyone who's recently applied for credit.Credit repositories now sell the contact information of people applying for new mortgage loans to other mortgage lenders that want to compete for the business.Called "trigger leads", an unsuspecting mortgage applicant can have his credit checked by a mortgage lender, and then discover that the credit bureaus have sold the rights to his personal information to countless other credit firms across the country. Because trigger leads identify a person making a lending decision right now, one marketer of trigger leads calls them "the best leads in the business". It's no wonder that the credit bureaus are marketing them, and that some lenders are salivating over them.As the family in the CBS vi... 06/26/2007

Is "news" always news, or is it masked opinion?  When doing research on mortgages, it's important to pay attention to the objectivity of your research source.  Often, a writer will deploy key adjectives, phrases, and/or images that distort an otherwise factual story.The above cartoon from clangnuts.com is a terrific example.  It implies that interest only home loans are for people that can't otherwise afford homeownership.The truth is that interest only loans are used by all economic classes of homeowners -- not just those that need payment relief.  Many people choose interest only home loans for their flexibility, or as a financial planning tool.Sure, there are some people that use interest only loans to "get onto the housing ladder", but that is a statement about the homeowner and no... 06/21/2007

It was another favorable day for mortgage rates Tuesday as average housing data and momentum trading carried bond prices higher.  Bond prices up, mortgage rates down, of course.  All things considered, mortgage bonds should not have moved as much as they did.  But, this is the summer season and in the summer, fewer traders show up for work.  Especially during a week like this one in which there is no major data release.  With fewer traders participating, there are fewer bond buyers to match with sellers, and fewer bond sellers to match with buyers.  Therefore, it is much less likely that a person who wants to buy at a certain price will find somebody who wants to sell at a certain price.  Therefore, mortgage bonds (and interest rates) tend to move a lot more sharply during the summer t... 06/20/2007

For those that spend a lot of time in their car, this is old news.Since Memorial Day weekend when gas prices touched $3.24/gallon nationally, the cost of filling up dipped below $3.00.  According to Gas Buddy, Monday's average cost per gallon was $2.995.Despite the dip, gas prices are still much higher for late-June than in years prior.2002: approximately $1.40/gallon2003: approximately $1.48/gallon2004: approximately $1.92/gallon2005: approximately $2.14/gallon2006: approximately $2.82/gallon2007: approximately $2.99/gallonGas prices change quickly and those changes can be attributable to the price of crude oil, increased demand for gas from road travelers (i.e. summer road trips), or an interruption in the overall production (i.e. supply) of Gulf Coast refineries or from crude oil sou... 06/19/2007

Remember the old tag line from the show "Lifestyles of the Rich and Famous", as Robin Leach wished us all "champagne wishes and caviar dreams"? And sure enough, these days more and more people have the trappings of the rich. But is it the new home, maybe a shiny BMW, or more vacations? No. It's getting hit by the Alternative Minimum Tax (AMT), which was originally designed to hit only the ultra-wealthy. Not really the "you have arrived" feeling you had hoped for.The nasty AMT isn't just for the wealthy anymore, as it is trapping an alarming amount of the middle class, especially those who own homes and live in states with high income tax rates. And it's getting worse. Pretty soon, over half those with incomes between $75k-100k will be victimized by the AMT.So what's the scoop with AMT, ... 06/18/2007

With today being Father's Day I thought you might enjoy learning a bit about how this holiday actually got its start.  Ok, some people think that Father's Day was invented as an afterthought to Mother's Day... You know, everyone felt sorry for dads since moms had their special day in May, so... along came Father's Day in June!  Not true!The creation of a national day for Dads began back in the 1900s and owes its start to a young widower by the name of William Smart.  A civil war veteran, William raised his six children single-handedly on a rural farm in eastern Washington State.  When Sonora Louise Smart Dodd, one of Mr. Smart's children, was grown she wanted to show her appreciation for her father.  So, in 1909, she proposed a day to honor her father in June, the month of her father's ... 06/17/2007

Square footage of a home is a matter of debate -- a homeowner measures it one way, a real estate agent another way, and an appraiser a third way.  The local tax assessor has his own method, too.So, who is right?Until 2003, they all were!  That's when the NATIONAL ASSOCIATION OF REALTORS® Appraisal Committee defined the term "square footage" to include the following:Finished square footage on each level of the home, measured from the exterior-facing surface of outside-facing walls.The committee defined "finished" as an enclosed area that is suitable for year-round use and includes walls, floors and ceilings. Seems basic enough, but there were some added notes and exceptions:An opening to a floor below (e.g. vaulted ceiling, open-air living room) is not included. Stairs are counted as sq... 06/16/2007

Home equity is created in one of two ways (assuming increasing home value and a non-negatively amortizing first mortgage).In the first method of creating equity, the homeowner pays down the principal balance on the mortgage.  This increases the difference between what is owed on the home and what the home is worth.In the second method of creating equity, a home's value increases over time.  This increases the difference between what is owed on the home and what the home is worth.Because both methods create equity, homeowners often confuse the two.In Method #1, the homeowner takes dollars from a paycheck that have already been taxed and places them "on deposit" with the home.  The money can only be recaptured when the homeowner sells the home or refinances.In Method #2, the home itself c... 06/14/2007

The pie chart above comes from a Bankrate.com survey, sampling 1,000 adults about their current housing situation. The question asked: What type of mortgage do you currently have?  While the 34% "Don't Know" figure is troubling, even more frightening is the 6% "ARM" figure.  The sample size was small, but far more than 6% of homeowners carry adjustable rate mortgages.  Some of the survey responders may have mistaken their "5-year fixed rate mortgage" for a true fixed rate mortgage -- even though they are aware that the rate can change after 60 months. According to the Federal Reserve, ARM holders tend to be unaware of how often their home loan can adjust, the maximum interest rate to which it can adjust, or even the rules by which the new, adjusted interest rate is calculated.  That al... 06/13/2007

The American Consumer keeps spending.  This morning, the monthly Retail Sales report showed a larger-than-expected jump.  Even after stripping out elevated gas prices, the sales increase was more than double the expected amount.  The economy surges ahead, fueled by everyday spending, and this does not bode well for the future of mortgage rates.The recent run-up in mortgage rates is largely from inflation fears.  With inflation, investors' dollar-denominated securities have less value over time because the dollar itself is worth less.  Runaway consumer spending exacerbates the potential for an overheated economy and that is why today's figures are slightly troubling.  Each time you and I make a purchase, we are (in small way) contributing to the economy's growth.Inflation, of course, is... 06/13/2007

This cartoon by Wiley applies to mortgages in 2007 like it did to stock trading in 1999.  The least expensive mortgage options aren't always the least costly.  A quick look at the Sunday paper's Foreclosure Notice section can verify that.The right loan at a fair price saves far money money than the wrong loan at any price.Have a great night everyone! 06/12/2007

If you ever wanted proof that mortgage rates react to global events, the past four days are it.  Worldwide, investors are shunning the United States mortgage market in search of higher returns elsewhere.The more they sell, the worse mortgage rates get.The latest catalyst for extra supply: speculation about a Bank of Japan interest rate increase coming soon.  The Japanese central bank meets Thursday and Friday and is expected to hold its overnight lending rate at 0.500% although Finance Minister Omi has hinted at future rate hikes.  Japan is a major player in the U.S.-based mortgage bond market so the thought of higher returns at home is putting mortgage bonds on the market and forcing prices down.As always, prices down, yields up.  And the carnage continues. 06/12/2007

After a semi-calm start, last week ended terribly for mortgage rate shoppers highlighted (lowlighted?) by Thursday's mortgage bond market crash. The drubbing Thursday was the worst day for the bond market in three years and is one of the reasons why the conforming and jumbo 30-year fixed mortgage is up 0.625% since late-April.  Conforming and jumbo ARMs are up as well, although not as much.One factor impacting the mortage bond market is central bank activity in other countries. The European Central Bank, for example, raised its benchmark interest rate by 0.25% last week.  That caused investor cash to move away from the United States and into the Eurozone.  As the cash leaves the U.S. markets for markets elsewhere, it creates an excess supply which pushes prices down. For bonds, lower pr... 06/11/2007

Thursday was the single worst day for mortgage rates in more than four years.    Because so few homeowners understand how mortgage rates are determined, a day like Thursday may have little context.  So, let's try to put it in perspective.  If somebody told you that the stock market crashed, you'd understand.  A stock market crash happens when many more investors are selling stocks than those that are buying.  Supply and Demand causes prices to plummet.This is what happened to bonds yesterday -- the market had a "crash" because global investors fled the U.S. markets in search of better returns elsewhere.  In other words, lots of sellers and very few buyers.Because mortgage rates are based on the prices of mortgage bonds and because Supply and Demand dropped the prices of mortgage bonds,... 06/09/2007

This is just a quick reminder to ignore national news stories about real estate.  It may sound like strange advice, but real estate is a highly local phenomenon.  The "national scene" is comprised of data from:50 states, with More than 30,000 incorporated cities, and with An innumerable number of neighborhoodsIt also combines data from:Single family residences 2-4 units Condominiums/Co-opsIn other words, throw a dart at a map of the United States and the street on which the dart lands is in the same data set as the street on which you live.Like I said, ignore the national statistics -- focus on your local statistics.  Unfortunately, getting local real estate statistics is not always easy.  The best place to start is by asking a real estate agent, a title company representative, or some... 06/08/2007

Have you ever wondered how much your coffee habit is costing you?Courtesy of software developer Hugh Chou, use the Coffee Calculator to calculate how much you pay for coffee each year, and how much money you forgo in savings because of it.Did you know:  If you buy a $1.87 grande drip coffee from Starbucks every working day instead of drinking free coffee in your office, you'll forfeit more than $6,000 over 10 years' time?Compounding the problem?  Very few of us take our coffee "plain".  If you prefer the grande, sugar-free vanilla, non-fat latte, well, you'd best check out the savings for yourself.The next time you wonder where you'll find money for a downpayment on a new home, or pay for lawn care, or a car repair, begin the planning process by studying the dollars you spend on non-es... 06/07/2007

Choosing the right lender is a key element to managing your mortgage. As a mortgage planner, my goal is not just to provide you with a loan, but also to help select the one most beneficial to you and your long-term goals, and then, help you manage that debt over time. There are not many lenders out there who provide this type of personalized service.My job is just beginning when your first loan closes. I will continuously monitor rates on your behalf, and stay in touch with you to make sure we remain on target with your financial goals.Seek Pre-ApprovalWhat's the difference between pre-qualification and pre-approval?Pre-qualification is the starting point in your search for mortgage financing. A quick snapshot is taken which includes income, existing debt, savings, length of employment,... 06/04/2007