Mortgage rates remain quiet before the Fed

Mortgage rates were relatively unchanged this week, but don't let the calm before the storm fool you. When the Federal Reserve wraps up its policy meeting Thursday, the markets will be anything but quiet.

30 year fixed rate mortgage – 3 month trend

With or without an announcement for additional monetary stimulus, the Fed will indirectly affect mortgage rates this week. For borrowers who don't like to live on the edge, this may be a good time to lock a rate.
The benchmark 30-year fixed-rate mortgage rose to 3.81 percent from 3.79 percent, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.39 discount and origination points. One year ago, the mortgage index stood at 4.32 percent; four weeks ago, it was 3.86 percent.

September Home-Maintenance Checklist - conclusion

Inspect your roof and chimney

If your roof isn't too steep, and isn't covered with slate or tile, you may be able to carefully walk on it on a dry day. Look for broken or missing shingles, missing or damaged flashing and seals around vent pipes and chimneys, and damage to boards along the eaves. Also peer down your chimney with a flashlight to make sure no animals have set up house in it. If you can't get on your roof, perform this inspection with a ladder around the perimeter. Pay close attention to valleys and flashings — many leaks originate in these spots. Some patches and roofing cement now can prevent thousands of dollars of water damage later in the winter.

September Home-Maintenance Checklist - cont.

Caulk exterior
Think of caulk as weatherstripping in a tube. Any gap on the outside of your home can be a candidate for caulking. Look at transition spots: corners, windows, doors, areas where masonry joins siding, or places where vents and other objects protrude from walls. Carefully read manufacturer's directions to make sure the caulk you buy will work where you plan to use it, and don't forget to purchase a caulking gun. Early fall is a good time for this task because caulk becomes difficult to apply when the temperature falls.

Got wood?
If you have a wood stove, it's not too early to lay in a supply of firewood. Though most of us buy whatever's local, bear in mind that soft woods like fir and cedar burn faster and create hazardous creosote in the chimney, thus requiring more system maintenance and more wood. Hardwoods such as oak, hickory and maple are slow, hot, clean burners. Wood piles attract insect and animal pests, so stack wood away from the house. Wood dries best when it's protected from rain and has air circulating around it, so under the roof of a wall-less carport would be an ideal wood storage spot.

Clean dryer vent
This is another one of those tasks that should be on your to-do list every six months. Scoot your clothes dryer away from the wall, unplug it, and vacuum behind it. (If it's a gas dryer, turn off the gas supply to the dryer at the appliance shutoff valve.) Unhook the tube that leads to the vent and clear as much lint from the tube as you can. Grab a shop vacuum, go outside, and tackle the outside dryer vent as well.

September Home-Maintenance Checklist - cont.

Check storm windows
If you have storm windows that are cracked or dirty, repair and clean them now — prior to autumn installation.

Fight winter with plywood
Find a couple of scrap sheets of plywood and set them aside. When the weatherman predicts a cold snap, set the boards against the exterior basement vents on whichever side of your house bears the brunt of your prevailing weather patterns. This bit of scrappiness could help prevent frozen pipes. Be sure to remove the boards once the weather warms up — those vents are there for a reason.

Insulation speculation
This is a good time to check the condition of insulation and see if you need more, especially if you live in an older home. You can purchase unbacked or loose-fill insulation if you are just beefing up what is already there. If you are adding batted insulation to a spot that has none, remember that the foil-backed side is the vapor barrier, and it must face the heated area.

For example, if you are laying fiberglass insulation in an unfinished attic floor to keep heat in the living room below, you should see pink when you're done — not foil. If your walls lack insulation, consider having a professional install blown-in insulation foam. The energy savings will probably offset the cost of the procedure in a couple of years.

September Home-Maintenance Checklist

School is back in session and mornings are crisp, making this a great month for tackling home projects.

Ever wake up in early September and notice that the air smells different? School begins, days get shorter, and a sense of responsibility begins to creep up on most of us.
We've always wondered why "fall cleaning" isn't as popular as "spring cleaning." The air on brisk September mornings inspires us to dutifully button up the home in preparation for cooler days and longer nights.

Add weatherstripping to doors and windows
Weatherstripping can be plastic, foam, felt or metal; its job is to seal small gaps, keeping moisture and cold air outside where they belong. Look around your doors and windows: Is the weatherstripping torn or missing? This can become expensive if ignored. On doors, make sure the bottom seal is working properly — there are many sweeps, gaskets and thresholds designed to seal this gap. Doors generally need weatherstripping in their jambs as well. Adhesive-backed foam pads are easy to install for this purpose. Newer, energy-efficient windows generally don't require added weatherstripping, but if your windows are older, weatherstripping can keep drafts at bay and energy costs down.

Don't Sell a Smelly House

Homebuyers don't want houses that stink. Sellers must identify and remediate odors that make prospective purchasers hold their noses and run for the exits. A buyer's market is a tough challenge for sellers.
If you're selling, your house has to look a little better, smell a little better and be priced a little better than the other houses the buyer will look at that same day.
Unfortunately, it's not always easy for sellers to identify familiar smells that might be problematic, says Neeraj Gupta, director of product research and development at ServiceMaster Clean, which performs major cleanups and post-disaster restorations of residential and commercial properties.
"There is no 'odor meter,'" Gupta says. "People get used to the odor of their house and may not notice that something is not pleasant."

Outside sniffers

The best way to find out whether a house smells OK is to "ask someone who doesn't live there to come inside and give an opinion.
The obvious "someone" would be the real estate broker hired to sell the home. But not all brokers will point out that a house smells bad, even if they're willing to offer other helpful suggestions.
Some sellers are not outspoken about odor issues. Instead, they might consider offers to pass along any unfiltered "brutal truth" comments they hear from their colleagues who bring buyers to see the property. That way, the message gets delivered with less risk to her cordial relationship with the sellers.
Some people will never be the kind that will come out and tell you that your house smells like cat litter or mothballs. They would rip their tongue out first.

6 Mortgage Relief Scams To Avoid - conclusion

How to report a scam

If you believe you are the victim of a mortgage relief scam, you can contact one of the following agencies to report it.

• BBB.org/us/scam-source.
• FTC.gov or call (877) 382-4357.
• PreventLoanScams.org or call (866) 459-2162.
• HOPENOW.com or (888) 995-4673.
• MakingHomeAffordable.gov.
• Sigtarp.gov/contact_hotline.shtml#theform or call (877) 744-2009.

While it is important to report a possible scam, homeowners must be careful to tell their servicers immediately, too.
If the homeowners have listened to a scammer and not paid their mortgage or have avoided communication with their lender, they need to get in touch as soon as possible to prevent foreclosure if it is still possible. Unfortunately, for some homeowners, it will be too late to stop the foreclosure process.

6 Mortgage Relief Scams To Avoid - #6

Mass joinder scam

Fake and even legitimate law firms send notices to homeowners, including some who are not in  financial distress, that claim the homeowners have been wronged by their lenders and may be eligible for restitution.
The homeowners are told to pay $2,000 or more to become part of the lawsuit, but no one should ever pay to be part of a class-action suit.
The Precision Law Center participated in a mass joinder scam, in which borrowers are invited to file separate lawsuits but share legal fees.
Generally, these kinds of scams get 1,000 homeowners or more, each paying an average of $3,000. Sometimes an actual lawsuit is filed on the homeowner's behalf, but usually the suits are kicked out of court immediately for lack of evidence.
Never pay a fee to become part of a class-action lawsuit. Anyone who guarantees a loan modification from your lender or guarantees that a foreclosure can be prevented cannot be telling the truth.

6 Mortgage Relief Scams To Avoid - #5

Misrepresented attorneys general settlement

The attorneys general settlement with the five largest mortgage lenders brought out a new group of people who call homeowners and tell them they represent the lender. They will request $500 or more to facilitate the homeowners getting money from the settlement.
Another common scam is for homeowners to be told that a caller is from a government agency with information about the mortgage settlement. The caller requests a bank routing number or other personal information to "facilitate the refund," but then the scammers drain the bank account.
People are always looking for fresh ways to get homeowners' money. One of the newest is for a scammer to tell the homeowner they will put their money in an escrow account and hold it during the loan modification process. Once the money is in the account, they drain it and disappear.
To avoid this scam, never give out personal financial information to anyone who calls. And don't pay a fee for housing counseling.

6 Mortgage Relief Scams To Avoid - #4

Advising you to stop contacting your lender

In March 2012, three scammers were arrested on charges of committing fraud against California homeowners. They were Gregory and Cynthia Flahive, ex-spouses and co-owners of Flahive Law Corporation, and the firm's managing attorney, Mike Johnson.
In addition to requiring upfront fees in exchange for loan modification assistance, the Flahives told one homeowner to reject his lender's offer of a loan modification. They told that homeowner that they could get a better deal. Instead, the home was lost to foreclosure within four months.
Be wary of anyone who tells you to stop paying your lender or who tells you to stop trying to contact your lender. Don't trust someone who says they will talk to your lender on your behalf. Always talk to your servicer directly.

6 Mortgage Relief Scams To Avoid - #3

Money back guarantees

Howard Shmuckler, owner of The Shmuckler Group in Vienna, Va., collected almost $2.8 million from struggling homeowners by promising them he could guarantee a loan modification under the Home Affordable Modification Program. He told these homeowners to stop making their mortgage payments and to avoid contact with their lenders.
Every mortgage relief scam is horrible, and Howard Shmuckler's scam was devastating for his victims. Victims of these scams not only lose a lot of money, but they lose the time when they could have been working directly with HAMP to save their homes. A lot of scammers tell people they can guarantee a loan modification or guarantee that they can stop a foreclosure, but unfortunately a guarantee is never possible.
Some of Shmuckler's victims might have been able to modify their mortgages under HAMP if they had not become so far behind on the mortgage by following Shmuckler's advice.
Shmuckler charged for his nonexistent services. Jones warns that some scammers, knowing consumers have been warned against paying an upfront fee, now wait until a second or third meeting before requesting a fee.
Homeowners should never pay a fee for loan modification assistance. Government and nonprofit housing counselors provide this service for free.

6 Mortgage Relief Scams To Avoid #2

Offering to perform a mortgage audit

The Federal Trade Commission filed a complaint against Sameer Lakhany of Santa Ana, Calif., and companies he controlled, including the Precision Law Center, for charging homeowners for a "forensic loan audit."
Reilly Dolan, assistant director for financial practices for the FTC, says, "A salesperson would call the homeowners and say they were going to audit their mortgage documents and use the violations they could find to force their lender to approve a loan modification. The scammers would tell people that they found violations 90 percent of the time."
Dolan says these types of scams typically ask for $1,000 to $5,000 from the homeowners, with an average fee of $3,000.
Precision Law Center employees claimed to be HUD-approved housing counselors with qualifications to do the loan audits, which they said would be the only part of the process that wasn't free.
The FTC says that more than $1 million was collected by the Precision Law Center.
Barbara Floyd Jones, program manager for foreclosure prevention efforts for NeighborWorks America, says the paperwork for a loan audit can look legitimate, but she says consumers can avoid scams by proactively contacting a local HUD-approved housing counselor through the HUD website.

6 Mortgage Relief Scams To Avoid

Homeowners trying to avoid foreclosure are stressed and scared. They have become a prime target of con artists who prey on vulnerable people. Nonprofit organizations and government agencies are working together to warn consumers of the danger of mortgage relief scams and how to avoid them.
Many mortgage scammers have been arrested, but plenty more are trying to take advantage of homeowners' financial woes. Here are some examples of common mortgage relief scams.

Scammers posing as official counselors

Several Florida men were arrested in August 2011 and charged with defrauding homeowners under the name of a company called Home Owners Protection Economics Inc., or HOPE, meant to mimic the name of HOPE NOW, a public-private alliance of lenders, nonprofit housing counselors and other mortgage-industry participants. The scammers claimed to be connected with the homeowners' lenders or said they had already been approved for a loan modification under the Home Affordable Modification Program, or HAMP. They demanded an upfront fee for their services.
Last year, a couple came up to an attendee at a homeowners assistance event and told here they had paid what they thought was HOPE NOW $4,000 to help them with a loan modification. The scammers had taken her (HOPE NOW's) documents and letters and reproduced them so they looked legitimate and used HOPENOWModificationsLLC.com as their website.
Many scammers use similar names to government and nonprofit programs and even add their logos to their materials.
To avoid being caught by one of these scams, homeowners should find a legitimate, free (Housing and Urban Development)-approved housing counselor by going to HUD.gov. It's important to realize that housing counseling is free.

Factors That Influence Your Credit Score - conclusion

Type of refinance

Borrowers who are applying for a rate-and-term refinance will typically pay the same mortgage rate as borrowers who are purchasing a home. If you are applying for a cash-out refinance, you'll typically pay a mortgage rate about one-fourth percent higher if your loan-to-value is at 70 percent or above. Usually there won't be a bump-up in the mortgage rate if your loan-to-value is 60 percent or lower, even if you do a cash-out refinance.

Loan-lock length

A longer loan-lock period generally comes with a higher price, and that translates into a higher refinance rate. You'll see a variance in the rate from 0.125 percent to 0.375 percent depending on whether you lock in your rate from 30 to 45 or 60 days. Homeowners who want to refinance a mortgage usually need to lock their rate for at least 60 days.

Type of residence

Condominiums are considered slightly more risky than single-family homes and town houses, so condo borrowers will typically be quoted a refinance rate that is 0.125 to 0.25 of a percentage point higher than the best interest rates.

Factors That Influence Your Credit Score - cont.

Loan term

The yield curve changes sometimes, but generally, a 15-year fixed-rate loan is lower than a 30-year fixed-rate loan. You can even do a 10-year loan for a lower rate. Right now, a 15-year mortgage has an interest rate about one-half percent lower than a 30-year loan.

Loan size

If you need to borrow a large amount of money, greater than the conforming loan limits, you'll pay an interest rate of at least three-quarters of a percentage point higher for a jumbo loan. Small loans sport higher interest rates, too. Once the loan amount gets below $150,000, there's usually a small add-on to the interest rate. The add-on is larger when you get below $100,000 or $50,000 because lenders make very little money on loans of that size.

Loan to value

The loan-to-value ratio refers to the amount you owe compared to the appraised value of the home. If you owe $90,000 on a house that's worth $100,000, then your loan-to-value ratio, or LTV, is 90 percent. If you owe $70,000 on the same house, the LTV is 70 percent.
Mortgages with a loan-to-value ratio greater than 80 percent require mortgage insurance. Borrowers have the option of paying their mortgage insurance upfront or over the life of the loan, but they can also opt for "lender-paid" mortgage insurance, which covers the cost of the mortgage insurance with a higher interest rate.

Factors That Influence Your Credit Score

Rock-bottom mortgage rates entice homeowners to refinance, but many borrowers are surprised to find that the advertised mortgage rate is not necessarily the refinance rate they will be offered. In fact, mortgage rates for a refi on any given day can vary by as much as a full percentage point or more, depending on various factors.
A mortgage rate sheet looks like a menu, and there's a grid of available rates we see each day. There are lots of things that influence an individual's mortgage (refinance) rate, including whether or not they pay points.
Paying one point, equal to 1 percent of the loan amount, typically lowers the mortgage rate by one-quarter of a percentage point.
Most advertisements for low mortgage rates show the rate with one or more points. Loans with points aren't always the best way to go because of the rarity of actually recouping the money. Most borrowers refinance again or sell before they reach the break-even point from purchasing points.
Here are other factors that can influence your mortgage refinance rate.

Credit score

Generally, the lower your credit score, the higher your refinance rate will be, according to the senior vice president with Wells Fargo Home Mortgage near Chicago.
Many consumers don't realize what a big impact their credit score has on their refinance rate. For example, a credit score of 695 is pretty decent and we don't generally think of that as a bad score. But borrowers with that credit score can pay as much as three-eighths or one-half a percentage point higher on their mortgage rate compared to someone with a credit score above 760.

5 Emotional Mistakes Made By Homebuyers - conclusion

Mistake No. 5: Lowballing instead of negotiating realistically

All homebuyers want the lowest possible price, but there's a big difference between firm negotiating and lowballing.
Buyers can come in with unrealistic expectations about what a property should go for. It's best for a buyer to make a realistic bid not too far off from where he or she would ultimately like to end up.
Lowball offers run the risk of being rejected out of hand or lengthening the process and annoying the sellers. Either way, When buyers who lowball run a big risk of losing the property.

While all buyers are capable of lowballing, it's a problem especially common among cash buyers who don't need to borrow money. Such buyers are more attractive, especially to sellers who need to move quickly, but often the cash discount isn't worth as much as some buyers think.