Beware a mortgage-rate spike this spring
Posted by Carla Fried
November 16, 2009 11:31 am
A looming shift in Federal Reserve policy could send the 30-year fixed mortgage to 6% or higher, up from Monday’s rock-bottom rate of 5.02%. For all the hullaballoo about the stimulative impact of last week’s decision to extend the $8,000 First-Time Home Buyer Tax Credit and create a $6,500 credit for current homeowners, a sharp rise in the bellwether mortgage rate could muck up a housing recovery.
For the past year the Federal Reserve’s voracious $1.25-trillion purchase program of mortgage-backed securities has effectively pushed the 30-year conforming fixed-rate mortgage lower than it would normally be. Typically the conforming FRM (fixed rate mortgage) is about 25 basis points lower (1/4 point) than the rate on a jumbo mortgage. According to Bankrate's latest weekly survey, the difference is more than one percentage point (6.24% vs. 5.19% as of Nov. 10).
But the Federal Reserve has signaled that it intends to wind down its purchase program by the end of the first quarter of 2010. Analyst Meredith Whitney recently dubbed the Fed’s “Great Exit” the biggest risk for banks and the markets over the next four months. And consumers.
Absent another big buyer (or set of buyers) stepping up and taking the Fed’s place, rates would likely rise. If the jumbo/conforming spread reverts to its historic norm, we’re looking at a 30-year fixed rate mortgage closer to 6% based on today's levels. That could translate into a decline of 10% or so in home buyers' purchasing power. A $300,000 mortgage at 5.02%, for example, works out to about $1,614 a month. At 6% you’d need to drop the mortgage amount to less than $270,000 to keep the monthly payment at $1,614. As Amanda Gengler points out in her 2010 Housing Outlook, prospective buyers and refinancers should look to lock in a rate sooner rather than later
http://moneyfeatures.blogs.money.cnn.com/2009/11/16/beware-a-mortgage-rate-spike-this-spring/
Tuesday, November 17, 2009
Monday, November 2, 2009
Money 101 - Lesson 4 Investing
1. Over the long term, stocks have historically outperformed all other investments.
From 1926 to 2008, the S&P 500 returned an average annual 9.6 percent gain. The next best performing asset class is bonds. Long-term U.S. Treasury notes returned, on average, 5.9 percent over the same period.
2. Over the short term, stocks can be hazardous to your financial health.
On Oct. 19, 1987, stocks experienced the worst one-day drop in stock market history - 22.6 percent. More recently, the shocks have been prolonged and painful: If you had invested in a Nasdaq index fund around the time of the market's peak in March 2000 you would have lost three-fourths of your money over the next three years. And in 2008, stocks overall lost a whopping 37 percent.
3. Risky investments generally pay more than safe ones (except when they fail).
Investors demand a higher rate of return for taking greater risks. That's one reason that stocks, which are perceived as riskier than bonds, tend to return more. It also explains why long-term bonds pay more than short-term bonds. The longer investors have to wait for their final payoff on the bond, the greater the chance that something will intervene to erode the investment's value.
4. The biggest single determiner of stock prices is earnings.
Over the short term, stock prices fluctuate based on everything from interest rates to investor sentiment to the weather. But over the long term, what matters are earnings.
5. A bad year for bonds looks like a day at the beach for stocks.
In 1994, the worst year for bonds in recent history, intermediate-term Treasury securities fell just 1.8 percent, and the following year they bounced back 14.4 percent. By comparison, in the 1973-74 crash, the Dow Jones industrial average fell 44 percent. It didn't return to its old highs for more than three years or push significantly above the old highs for more than 10 years.
6. Rising interest rates are bad for bonds.
When interest rates go up, bond prices fall. Why? Because bond buyers won't pay as much for an existing bond with a fixed interest rate of, say, 5 percent because they know that the fixed interest on a new bond will pay more because rates in general have gone up.
Conversely, when interest rates fall, bond prices go up in lockstep fashion. And the effect is strongest on bonds with the longest term, or time, to maturity. That is, long-term bonds get hit harder than short-term bonds when rates climb, and gain the most when rates fall.
7. Inflation may be the biggest threat to your long-term investments.
While a stock market crash can knock the stuffing out of your stock investments, so far - knock wood - the market has always bounced back and eventually gone on to new heights. However, inflation, which has historically stripped 3.2 percent a year off the value of your money, rarely gives back what it takes away. That's why it's important to put your retirement investments where they'll earn the highest long-term returns.
8. U.S. Treasury bonds are as close to a sure thing as an investor can get.
The conventional wisdom is that the U.S. government is unlikely ever to default on its bonds - partly because the American economy has historically been fairly strong and partly because the government can always print more money to pay them off if need be. As a result, the interest rate of Treasurys is considered a risk-free rate, and the yield of every other kind of fixed-income investment is higher in proportion to how much riskier that investment is perceived to be. Of course, your return on Treasurys will suffer if interest rates rise, just like all other kinds of bonds.
9. A diversified portfolio is less risky than a portfolio that is concentrated in one or a few investments.
Diversifying - that is, spreading your money among a number of different types of investments - lessens your risk because even if some of your holdings go down, others may go up (or at least not go down as much). On the flip side, a diversified portfolio is unlikely to outperform the market by a big margin for exactly the same reason.
10. Index mutual funds often outperform actively managed funds.
In an index fund, the manager sets up his portfolio to mirror a market index - such as Standard & Poor's 500-stock index - rather than actively picking which stocks to purchase. It is surprising, but true, that index funds often beat the majority of competitors among actively managed funds. One reason: Few actively managed funds can consistently outperform the market by enough to cover the cost of their generally higher expenses.
http://money.cnn.com/magazines/moneymag/money101/lesson4/
From 1926 to 2008, the S&P 500 returned an average annual 9.6 percent gain. The next best performing asset class is bonds. Long-term U.S. Treasury notes returned, on average, 5.9 percent over the same period.
2. Over the short term, stocks can be hazardous to your financial health.
On Oct. 19, 1987, stocks experienced the worst one-day drop in stock market history - 22.6 percent. More recently, the shocks have been prolonged and painful: If you had invested in a Nasdaq index fund around the time of the market's peak in March 2000 you would have lost three-fourths of your money over the next three years. And in 2008, stocks overall lost a whopping 37 percent.
3. Risky investments generally pay more than safe ones (except when they fail).
Investors demand a higher rate of return for taking greater risks. That's one reason that stocks, which are perceived as riskier than bonds, tend to return more. It also explains why long-term bonds pay more than short-term bonds. The longer investors have to wait for their final payoff on the bond, the greater the chance that something will intervene to erode the investment's value.
4. The biggest single determiner of stock prices is earnings.
Over the short term, stock prices fluctuate based on everything from interest rates to investor sentiment to the weather. But over the long term, what matters are earnings.
5. A bad year for bonds looks like a day at the beach for stocks.
In 1994, the worst year for bonds in recent history, intermediate-term Treasury securities fell just 1.8 percent, and the following year they bounced back 14.4 percent. By comparison, in the 1973-74 crash, the Dow Jones industrial average fell 44 percent. It didn't return to its old highs for more than three years or push significantly above the old highs for more than 10 years.
6. Rising interest rates are bad for bonds.
When interest rates go up, bond prices fall. Why? Because bond buyers won't pay as much for an existing bond with a fixed interest rate of, say, 5 percent because they know that the fixed interest on a new bond will pay more because rates in general have gone up.
Conversely, when interest rates fall, bond prices go up in lockstep fashion. And the effect is strongest on bonds with the longest term, or time, to maturity. That is, long-term bonds get hit harder than short-term bonds when rates climb, and gain the most when rates fall.
7. Inflation may be the biggest threat to your long-term investments.
While a stock market crash can knock the stuffing out of your stock investments, so far - knock wood - the market has always bounced back and eventually gone on to new heights. However, inflation, which has historically stripped 3.2 percent a year off the value of your money, rarely gives back what it takes away. That's why it's important to put your retirement investments where they'll earn the highest long-term returns.
8. U.S. Treasury bonds are as close to a sure thing as an investor can get.
The conventional wisdom is that the U.S. government is unlikely ever to default on its bonds - partly because the American economy has historically been fairly strong and partly because the government can always print more money to pay them off if need be. As a result, the interest rate of Treasurys is considered a risk-free rate, and the yield of every other kind of fixed-income investment is higher in proportion to how much riskier that investment is perceived to be. Of course, your return on Treasurys will suffer if interest rates rise, just like all other kinds of bonds.
9. A diversified portfolio is less risky than a portfolio that is concentrated in one or a few investments.
Diversifying - that is, spreading your money among a number of different types of investments - lessens your risk because even if some of your holdings go down, others may go up (or at least not go down as much). On the flip side, a diversified portfolio is unlikely to outperform the market by a big margin for exactly the same reason.
10. Index mutual funds often outperform actively managed funds.
In an index fund, the manager sets up his portfolio to mirror a market index - such as Standard & Poor's 500-stock index - rather than actively picking which stocks to purchase. It is surprising, but true, that index funds often beat the majority of competitors among actively managed funds. One reason: Few actively managed funds can consistently outperform the market by enough to cover the cost of their generally higher expenses.
http://money.cnn.com/magazines/moneymag/money101/lesson4/
Tuesday, October 13, 2009
Money 101 - Lesson 3
1. Money in a bank account is safe.
A bank is one of the safest places to stash your cash. In an effort to shore up consumer confidence during the credit crunch of 2008, the federal government said it would temporarily insure accounts against loss by up to $250,000 per depositor. After Jan. 1, 2010, the standard insurance of up to $100,000 per depositor returns.
2. You pay for the convenience of a bank account.
Banks pay lower rates on interest-bearing accounts than brokerages and mutual fund companies that offer check-writing privileges. What's more, bank fees can be high - account costs can easily add up to $200 a year or more unless you keep a minimum required balance on deposit.
3. Inflation can eat what you earn from a bank.
Even at a low rate of inflation, the annual creep in the cost of goods and services usually outpaces what banks pay in interest-bearing accounts.
4. Not all interest rates are created equal.
Banks frequently use different methods to calculate interest. To compare how much money you'll earn from various accounts in a year, ask for each account's "annual percentage yield." Banks typically quote both interest rates and APYs, but only APYs are calculated the same way everywhere.
5. You can get better rates
Certificates of deposit (CDs) offer some of the best guaranteed rates on your money and are insured up to $250,000 each through the end of the year. As with all other deposits, insurance will return to the standard $100,000 in 2010.
The catch: you have to lock up your money for three months to five years or more. If interest rates fall before the CD expires, the bank is out of luck and must give you the rate it quoted. If rates climb, you're stuck with the lower rate.
Also with rising interest rates, money market accounts can become an attractive option, too. They pay more than banking accounts and you don't have to lock up your money for a specific amount of time.
6. ATM fees can take a significant bite out of your budget.
The convenience of using automated teller machines is an increasingly pricey one. On average, the fee your bank charges you to use another institution's ATM is $1.46, according to a Bankrate.com survey in fall 2008. That's on top of the average $1.97 that the other institution will charge you to use its ATM.
7. Getting the best deal takes work.
You won't get a great deal on a car if you just walk into a dealer and plunk your money down. Likewise, you won't get a great banking deal unless you comparison-shop and ask about price breaks. For example, a bank might offer free checking if you are a shareholder or if you direct deposit your paycheck.
8. Use the Internet to shop for bank services.
You can use the Internet to compare fees, yields, and minimum deposit requirements nationwide. Sites like Bankrate.com allow you to search and compare the highest yields and the lowest costs on banking, savings, loans and deposit rates nationwide.
9. Banking online can make bill-paying easier.
Electronic bill-paying can save you the monthly hassle of paying your bills. And if you couple online banking with a personal-finance management program, such as Quicken or Microsoft Money, you'll be able to link your banking with your budgeting and financial planning as well. But be careful. Some vendors only warn the consumer of price hikes in the fine print of a bill.
10. You can bank without a bank.
A number of financial institutions offer accounts that resemble bank services. The most common: Credit union accounts; mutual fund company money market funds; and brokerage cash-management accounts.
money.cnn.com
A bank is one of the safest places to stash your cash. In an effort to shore up consumer confidence during the credit crunch of 2008, the federal government said it would temporarily insure accounts against loss by up to $250,000 per depositor. After Jan. 1, 2010, the standard insurance of up to $100,000 per depositor returns.
2. You pay for the convenience of a bank account.
Banks pay lower rates on interest-bearing accounts than brokerages and mutual fund companies that offer check-writing privileges. What's more, bank fees can be high - account costs can easily add up to $200 a year or more unless you keep a minimum required balance on deposit.
3. Inflation can eat what you earn from a bank.
Even at a low rate of inflation, the annual creep in the cost of goods and services usually outpaces what banks pay in interest-bearing accounts.
4. Not all interest rates are created equal.
Banks frequently use different methods to calculate interest. To compare how much money you'll earn from various accounts in a year, ask for each account's "annual percentage yield." Banks typically quote both interest rates and APYs, but only APYs are calculated the same way everywhere.
5. You can get better rates
Certificates of deposit (CDs) offer some of the best guaranteed rates on your money and are insured up to $250,000 each through the end of the year. As with all other deposits, insurance will return to the standard $100,000 in 2010.
The catch: you have to lock up your money for three months to five years or more. If interest rates fall before the CD expires, the bank is out of luck and must give you the rate it quoted. If rates climb, you're stuck with the lower rate.
Also with rising interest rates, money market accounts can become an attractive option, too. They pay more than banking accounts and you don't have to lock up your money for a specific amount of time.
6. ATM fees can take a significant bite out of your budget.
The convenience of using automated teller machines is an increasingly pricey one. On average, the fee your bank charges you to use another institution's ATM is $1.46, according to a Bankrate.com survey in fall 2008. That's on top of the average $1.97 that the other institution will charge you to use its ATM.
7. Getting the best deal takes work.
You won't get a great deal on a car if you just walk into a dealer and plunk your money down. Likewise, you won't get a great banking deal unless you comparison-shop and ask about price breaks. For example, a bank might offer free checking if you are a shareholder or if you direct deposit your paycheck.
8. Use the Internet to shop for bank services.
You can use the Internet to compare fees, yields, and minimum deposit requirements nationwide. Sites like Bankrate.com allow you to search and compare the highest yields and the lowest costs on banking, savings, loans and deposit rates nationwide.
9. Banking online can make bill-paying easier.
Electronic bill-paying can save you the monthly hassle of paying your bills. And if you couple online banking with a personal-finance management program, such as Quicken or Microsoft Money, you'll be able to link your banking with your budgeting and financial planning as well. But be careful. Some vendors only warn the consumer of price hikes in the fine print of a bill.
10. You can bank without a bank.
A number of financial institutions offer accounts that resemble bank services. The most common: Credit union accounts; mutual fund company money market funds; and brokerage cash-management accounts.
money.cnn.com
Wednesday, October 7, 2009
Money 101 #2 - Making a Budget
1. Budgets are a necessary evil.
They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.
2. Creating a budget generally requires three steps.
- Identify how you're spending money now.
- Evaluate your current spending and set goals that take into account your long-term financial objectives.
- Track your spending to make sure it stays within those guidelines.
3. Use software to save grief.
If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.
4. Don't drive yourself nuts.
One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.
5. Watch out for cash leakage.
If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.
6. Spending beyond your limits is dangerous.
But if you do, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.
7. Beware of luxuries dressed up as necessities.
If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.
8. Tithe yourself.
Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.
9. Don't count on windfalls.
When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.
10. Beware of spending creep.
As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.
www.money.cnn
They're the only practical way to get a grip on your spending - and to make sure your money is being used the way you want it to be used.
2. Creating a budget generally requires three steps.
- Identify how you're spending money now.
- Evaluate your current spending and set goals that take into account your long-term financial objectives.
- Track your spending to make sure it stays within those guidelines.
3. Use software to save grief.
If you use a personal-finance program such as Quicken or Microsoft Money, the built-in budget-making tools can create your budget for you.
4. Don't drive yourself nuts.
One drawback of monitoring your spending by computer is that it encourages overzealous attention to detail. Once you determine which categories of spending can and should be cut (or expanded), concentrate on those categories and worry less about other aspects of your spending.
5. Watch out for cash leakage.
If withdrawals from the ATM machine evaporate from your pocket without apparent explanation, it's time to keep better records. In general, if you find yourself returning to the ATM more than once a week or so, you need to examine where that cash is going.
6. Spending beyond your limits is dangerous.
But if you do, you've got plenty of company. Government figures show that many households with total income of $50,000 or less are spending more than they bring in. This doesn't make you an automatic candidate for bankruptcy - but it's definitely a sign you need to make some serious spending cuts.
7. Beware of luxuries dressed up as necessities.
If your income doesn't cover your costs, then some of your spending is probably for luxuries - even if you've been considering them to be filling a real need.
8. Tithe yourself.
Aim to spend no more than 90% of your income. That way, you'll have the other 10% left to save for your big-picture items.
9. Don't count on windfalls.
When projecting the amount of money you can live on, don't include dollars that you can't be sure you'll receive, such as year-end bonuses, tax refunds or investment gains.
10. Beware of spending creep.
As your annual income climbs from raises, promotions and smart investing, don't start spending for luxuries until you're sure that you're staying ahead of inflation. It's better to use those income increases as an excuse to save more.
www.money.cnn
Tuesday, September 22, 2009
Major Appraisal Changes Coming
As of January 1, 2010 - another big change - FHA will no longer let a trusted entity like Fisher order FHA appraisals. HUD has decided to follow Fannie and Freddie and only allow lenders to order them. What we have seen is some good appraisals and some really bad ones come across our desks. What this means for the borrower is that the appraisal is done regardless of value range needed and therefore you the borrower have just wasted $350 dollars if the value is too low. In the day, we here at Fisher would do our research with our appraisers and if the value is going to be an issue - there would be discussions with our clients and if we needed to cancel the appraisal due to inadequate value we could and no money is out of pocket. Because we were able to communicate with appraisers, this is looked upon as coersion and therefore no longer allowed.
However, the banks are really hating being in control of the appraisal process as the liability is now squarely on their shoulders - so a petition has started for everyone to be able to sign to recind the bill that started it all - I invite you to look it over and hopefully add more signatures - please pass it on!
http://www.hvccpetition.com/
However, the banks are really hating being in control of the appraisal process as the liability is now squarely on their shoulders - so a petition has started for everyone to be able to sign to recind the bill that started it all - I invite you to look it over and hopefully add more signatures - please pass it on!
http://www.hvccpetition.com/
Thursday, September 17, 2009
A step by step guide to gaining control of your financial life
Top Ten Things to Know
1. Narrow your objectives.
You probably won't be able to achieve every financial goal you've ever dreamed of. So identify your goals clearly and why they matter to you, and decide which are most important. By concentrating your efforts, you have a better chance of achieving what matters most.
2. Focus first on the goals that matter.
To accomplish primary goals, you will often need to put desirable but less important ones on the back burner.
3. Be prepared for conflicts.
Even worthy goals often conflict with one another. When faced with such a conflict, you should ask yourself questions like: Will one of the conflicting goals benefit more people than the other? Which goal will cause the greater harm if it is deferred?
4. Put time on your side.
The most important ally you have in reaching your goals is time. Money stashed in interest-earning savings accounts or invested in stocks and bonds grows and compounds. The more time you have, the more chance you have of success. Your age is a big factor - younger people (who have more time to build their nest egg) can invest differently than older ones. Generally, younger people can take greater risks than older people, given their longer investment horizon.
5. Choose carefully.
In drawing up your list of goals, you should look for things that will help you feel financially secure, happy or fulfilled. Some of the items that wind up on such lists include building an emergency fund, getting out of debt and paying kids' tuitions. Once you have your list together, you need to rank the items in order of importance (if you have trouble doing so, use the CNNMoney.com Prioritizer for help).
6. Include family members.
If you have a spouse or significant other, make sure that person is part of the goal-setting process. Children, too, should have some say in goals that affect them.
7. Start now.
The longer you wait to identify and begin working toward your goals, the more difficulty you'll have reaching them. And the longer you wait, the longer you postpone the advantage of compounding your money.
8. Sweat the big stuff.
Once you have prioritized your list of goals, keep your spending on course. Whenever you make a large payment for anything, ask yourself: "Is this taking me nearer to my primary goals - or leading me further away from them?" If a big expense doesn't get you closer to your goals, try to defer or reduce it. If taking a grand cruise steals money from your kids' college fund, maybe you should settle for a weekend getaway.
9. Don't sweat the small stuff.
Although this lesson encourages you to focus on big-ticket, long-range plans, most of life is lived in the here-and-now and most of what you spend will continue to be for daily expenses - including many that are simply for fun. That's OK - so long as your long-range needs are taken into consideration.
10. Be prepared for change.
Your needs and desires will change as you age, so you should probably reexamine your priorities at least every five years.
-from Money.CNN.com (personal finance)
1. Narrow your objectives.
You probably won't be able to achieve every financial goal you've ever dreamed of. So identify your goals clearly and why they matter to you, and decide which are most important. By concentrating your efforts, you have a better chance of achieving what matters most.
2. Focus first on the goals that matter.
To accomplish primary goals, you will often need to put desirable but less important ones on the back burner.
3. Be prepared for conflicts.
Even worthy goals often conflict with one another. When faced with such a conflict, you should ask yourself questions like: Will one of the conflicting goals benefit more people than the other? Which goal will cause the greater harm if it is deferred?
4. Put time on your side.
The most important ally you have in reaching your goals is time. Money stashed in interest-earning savings accounts or invested in stocks and bonds grows and compounds. The more time you have, the more chance you have of success. Your age is a big factor - younger people (who have more time to build their nest egg) can invest differently than older ones. Generally, younger people can take greater risks than older people, given their longer investment horizon.
5. Choose carefully.
In drawing up your list of goals, you should look for things that will help you feel financially secure, happy or fulfilled. Some of the items that wind up on such lists include building an emergency fund, getting out of debt and paying kids' tuitions. Once you have your list together, you need to rank the items in order of importance (if you have trouble doing so, use the CNNMoney.com Prioritizer for help).
6. Include family members.
If you have a spouse or significant other, make sure that person is part of the goal-setting process. Children, too, should have some say in goals that affect them.
7. Start now.
The longer you wait to identify and begin working toward your goals, the more difficulty you'll have reaching them. And the longer you wait, the longer you postpone the advantage of compounding your money.
8. Sweat the big stuff.
Once you have prioritized your list of goals, keep your spending on course. Whenever you make a large payment for anything, ask yourself: "Is this taking me nearer to my primary goals - or leading me further away from them?" If a big expense doesn't get you closer to your goals, try to defer or reduce it. If taking a grand cruise steals money from your kids' college fund, maybe you should settle for a weekend getaway.
9. Don't sweat the small stuff.
Although this lesson encourages you to focus on big-ticket, long-range plans, most of life is lived in the here-and-now and most of what you spend will continue to be for daily expenses - including many that are simply for fun. That's OK - so long as your long-range needs are taken into consideration.
10. Be prepared for change.
Your needs and desires will change as you age, so you should probably reexamine your priorities at least every five years.
-from Money.CNN.com (personal finance)
Wednesday, September 2, 2009
Yes the Housing Market Has Rarely Looked Better
by James B. StewartWednesday, September 2, 2009
Passing through the Fort Myers, Fla., airport a few weeks ago, I noticed people eagerly signing up for a free bus tour of foreclosed real estate — with all properties offering water views. During the ride to my hotel, the young driver volunteered that he’d just bought his first house, paying $65,000 for a foreclosed property in nearby Cape Coral that had last sold for over $250,000. He said he’d never expected to be able to buy anything on a driver’s salary, let alone something that nice.
Last week, Standard & Poor’s reported that its S&P/Case-Shiller U.S. National Home Price index of real estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.
More from SmartMoney.com:• 5 Strategies to Lower Your Rent Now • Return of the First-Time Homebuyer • Is an FHA-Insured Mortgage Right for You?
In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free fall. That means if you’ve been sitting on the fence, it’s time to act.
Ordinarily I’d never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real estate prices nationally now down about 30% from their 2006 peak, and showing signs of turning up, the prices aren’t likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can’t imagine a better time to buy than right now.
In addition to bargain prices, buyers should find plenty of homes to choose from. The inventory of unsold homes was 4.09 million units in July, up 7.3% from June, according to the National Association of Realtors. And mortgage rates this week were at a two-month low of close to 5%, according to Zillow. Even the stricter appraisal process is working to the advantage of buyers. Appraisals are coming in far lower than most sellers have been expecting, forcing them to face the new reality of sharply lower prices. And with stricter standards, lenders aren’t going to let buyers borrow more than they can afford, which protects buyers and helps to keep prices down.
Unless you’re really prepared to accept the demands (and headaches) of being a landlord, I don’t recommend direct ownership of real estate as an investment. The days of buyers lining up to buy and flip Miami Beach and Las Vegas condos are mercifully gone. There are much easier ways to make money in real estate, such as real-estate investment trusts or buying shares in home builders and other housing-related businesses (such as Home Depot (HD)). Historically, the mean rate of return on real estate has been around 3%, according to research from Yale economist Robert Shiller, who co-developed the Case-Shiller index. Shares in REITs and other stocks have often done much better.
But there’s a good reason home ownership has been such a central part of the American dream. It delivers security, pride of ownership, a sense of community and decent investment returns as a bonus. I felt glad for my driver in Florida. He represents the other side of the foreclosure crisis. For every hardship story, and no doubt there are many, others are realizing their dreams of home ownership and getting what may well turn out to be the deals of their lives.
Copyrighted, SmartMoney.com. All Rights Reserved.
Passing through the Fort Myers, Fla., airport a few weeks ago, I noticed people eagerly signing up for a free bus tour of foreclosed real estate — with all properties offering water views. During the ride to my hotel, the young driver volunteered that he’d just bought his first house, paying $65,000 for a foreclosed property in nearby Cape Coral that had last sold for over $250,000. He said he’d never expected to be able to buy anything on a driver’s salary, let alone something that nice.
Last week, Standard & Poor’s reported that its S&P/Case-Shiller U.S. National Home Price index of real estate values increased this past quarter over the first quarter of 2009, the first quarter-on-quarter increase in three years. Its index of 20 major cities also rose for the three months ended June 30 over the three months ended May 31, with only hard-hit Detroit and Las Vegas experiencing declines. The week before that, the National Association of Realtors reported that sales volume of existing homes was up 7.2% in July from June.
More from SmartMoney.com:• 5 Strategies to Lower Your Rent Now • Return of the First-Time Homebuyer • Is an FHA-Insured Mortgage Right for You?
In short, the data suggest that real-estate prices hit a bottom some time during the second quarter, and have now begun to rise. There’s no way to be certain that this marks the end of the long, painful correction that followed the real-estate bubble, but clearly prices are no longer in free fall. That means if you’ve been sitting on the fence, it’s time to act.
Ordinarily I’d never try to time the real-estate market, but I can understand why buyers have been cautious. Few want to buy in down markets, just as stock buyers avoid bear markets. And for most people, of course, buying a house is a much bigger decision than buying a stock. But with real estate prices nationally now down about 30% from their 2006 peak, and showing signs of turning up, the prices aren’t likely to go much lower. Every real-estate market is local, and so there may be a few exceptions. Overall, though, I can’t imagine a better time to buy than right now.
In addition to bargain prices, buyers should find plenty of homes to choose from. The inventory of unsold homes was 4.09 million units in July, up 7.3% from June, according to the National Association of Realtors. And mortgage rates this week were at a two-month low of close to 5%, according to Zillow. Even the stricter appraisal process is working to the advantage of buyers. Appraisals are coming in far lower than most sellers have been expecting, forcing them to face the new reality of sharply lower prices. And with stricter standards, lenders aren’t going to let buyers borrow more than they can afford, which protects buyers and helps to keep prices down.
Unless you’re really prepared to accept the demands (and headaches) of being a landlord, I don’t recommend direct ownership of real estate as an investment. The days of buyers lining up to buy and flip Miami Beach and Las Vegas condos are mercifully gone. There are much easier ways to make money in real estate, such as real-estate investment trusts or buying shares in home builders and other housing-related businesses (such as Home Depot (HD)). Historically, the mean rate of return on real estate has been around 3%, according to research from Yale economist Robert Shiller, who co-developed the Case-Shiller index. Shares in REITs and other stocks have often done much better.
But there’s a good reason home ownership has been such a central part of the American dream. It delivers security, pride of ownership, a sense of community and decent investment returns as a bonus. I felt glad for my driver in Florida. He represents the other side of the foreclosure crisis. For every hardship story, and no doubt there are many, others are realizing their dreams of home ownership and getting what may well turn out to be the deals of their lives.
Copyrighted, SmartMoney.com. All Rights Reserved.
Monday, August 31, 2009
Eleven Years in the Mortgage World
Wow - it seems like a lifetime ago that I first walked into Fisher Mortgage to start my career as a Loan Officer eleven years ago today! I never had my doubts that I could do this job but let me tell you it was a struggle at times. Just barely two months into this business, the market did a complete halt and rates jumped one percent in one day. Two years of increasing interest rates kept me wondering - how am I going to survive this turmoil? Back then - not alot of banks had automated mortgage departments and overnight packages or couriers were the way to deliver your loans to them. The representatives we worked with were sometimes our only access to product and guideline information. Phone tag was the way. Now there are many electronic ways to keep up with this industry - blackberry, efax, email, websites and webinars! These all have helped me to be and stay in this world of mortgages - good and bad times.
This last year has been one of those years of questioning why do I do this? Well, after spending a complete day tweeking an application and running it through the approval system - I called my client with the good news. I had a loan that would put things right for her. Her appreciation for what I did was overwhelming and made me realize why I am here - both feet stuck in for the duration. I love helping people - always have and always will!
So here it is - eleven years and many more to go! No matter where I am or what I am doing, as long as the government will let me, I will always be a mortgage broker.
Thank you all for the best!
Julia Matthews
This last year has been one of those years of questioning why do I do this? Well, after spending a complete day tweeking an application and running it through the approval system - I called my client with the good news. I had a loan that would put things right for her. Her appreciation for what I did was overwhelming and made me realize why I am here - both feet stuck in for the duration. I love helping people - always have and always will!
So here it is - eleven years and many more to go! No matter where I am or what I am doing, as long as the government will let me, I will always be a mortgage broker.
Thank you all for the best!
Julia Matthews
Tuesday, August 25, 2009
Who do you know.....?
1-First Time Homebuyers - your time is running out - a contract should be in place on a home by the end of September to close by the November 30th deadline for your (up to) $8000 refund.
2- If you have decided to sell your home - it is a good idea to do a mortgage check up on your current residence. With the length of time it is taking to sell, why not get out of your 30yr fixed and drop your payment into a 5 year ARM which is pricing on some days below 4%!
3- Elderly parents - move them or not? Talk to our Reverse Mortgage Specialist Brian Levitan and read my March 10 informational blog about the benefits of a reverse mortgage.
4- Business owners struggling - there is a Commercial Stimulus program out there for you as well -
So, who do you know that fits into any of these categories?
Call me for more information
Julia Matthews
847 837 5302
Helping Homeowners Help Themselves
2- If you have decided to sell your home - it is a good idea to do a mortgage check up on your current residence. With the length of time it is taking to sell, why not get out of your 30yr fixed and drop your payment into a 5 year ARM which is pricing on some days below 4%!
3- Elderly parents - move them or not? Talk to our Reverse Mortgage Specialist Brian Levitan and read my March 10 informational blog about the benefits of a reverse mortgage.
4- Business owners struggling - there is a Commercial Stimulus program out there for you as well -
So, who do you know that fits into any of these categories?
Call me for more information
Julia Matthews
847 837 5302
Helping Homeowners Help Themselves
Thursday, August 20, 2009
Keeping those Utility Bills Low
By Ashley Grimaldo -
So you've tightened the reins on your air conditioner, threatening the kids within an inch of their lives when they dare turn it below 82 degrees. Doors and windows are sealed, fans are turned to high, and you don't cook between 4-7p. If you are still choking down huge bills this summer, and can't afford a system overhaul, there are several steps you can take to bring down energy usage without living by candlelight.
1. Cook with the stovetop and microwave more than the oven. Your oven consumes far more energy than the range, so take advantage of other heating options. If you micro zap a frozen lasagna instead of warming it in the oven, you could be saving as much as 80 percent, according to the Energy Star Program.
2. If you use a slow cooker, think about setting it on a covered patio rather than your kitchen counter. Of course, this may or may not work for your family if you have a menagerie of wildlife, tame or otherwise, camped next to the back door. But by shuttling the heat outside you won't have to pay more to cool off that hot kitchen. According to the Dollar Stretcher the amount of energy used by a slow cooker is comparable to an oven as it runs for much longer and does not cycle on and off like an oven.
3. Cover up those pots and pans. Modesty is a virtue when it comes to keeping heat contained. You'll be able to cook the food faster with the trapped steam and avoid cooling the space.
4. Heat meats and casseroles from room temperature. Most recipes are designed to heat food that has not been sitting in the fridge for the last several hours. If you've assembled a casserole or meat dish ahead of time, remove it at least 45 minutes before cooking to let it relax. This not only saves a couple of bucks, as you won't have to cook as long, but your food will be tastier.
5. Keep your pilot light regulated for the kitchen and (if applicable) the fireplace. If the light is poorly adjusted you'll waste a lot of extra gas. You want to turn the dial until you see a mostly blue flame with a little yellow at the top.
6. Wash all your dishes at once, late at night or early morning. It's annoyingly loud anyway, so set it to run after everyone is asleep. Wash a full, but not overfull, load each time and turn the heated dry off-let the dishes air-dry. Also scrub the dishes ahead of time and run them through a lighter setting that uses less hot water (just make sure you aren't using gallons of heated water to scrub them first).
7. "Bleed" the hot-water heating system. Locate the valve at the end of your radiator and open it with a screwdriver to release trapped air. Hold a cup or bowl under the valve and stop when you hear a hissing noise. When water begins to trickle you've successfully released the air.
8. Don't turn the AC unit completely off during the day. Invest in a thermostat, like the 7-Day Programmable Thermostat, and you can save up to 33 percent on your utility bill. You can easily set a "return" temperature (between 74-78) that is comfortable for you and a "leave" temperature 5-10 degrees higher. If you opt to completely shut down the unit during the day, forget about having any semblance of cool in the evening-plus the compressor could use more energy in the evening rather than a little throughout the day.
9. Keep the freezer well stocked. The operating cost for a freezer filled twice a year versus once a year is only 1/2 as great. Stick a gallon of water in if you don't have enough food to fill it.
Brace yourself for record highs this August! You can be assured of a toasty climax to summer, but by remaining proactive you can still chisel off savings while staying comfortable.
Distributed by McClatchy-Tribune Information Services.
So you've tightened the reins on your air conditioner, threatening the kids within an inch of their lives when they dare turn it below 82 degrees. Doors and windows are sealed, fans are turned to high, and you don't cook between 4-7p. If you are still choking down huge bills this summer, and can't afford a system overhaul, there are several steps you can take to bring down energy usage without living by candlelight.
1. Cook with the stovetop and microwave more than the oven. Your oven consumes far more energy than the range, so take advantage of other heating options. If you micro zap a frozen lasagna instead of warming it in the oven, you could be saving as much as 80 percent, according to the Energy Star Program.
2. If you use a slow cooker, think about setting it on a covered patio rather than your kitchen counter. Of course, this may or may not work for your family if you have a menagerie of wildlife, tame or otherwise, camped next to the back door. But by shuttling the heat outside you won't have to pay more to cool off that hot kitchen. According to the Dollar Stretcher the amount of energy used by a slow cooker is comparable to an oven as it runs for much longer and does not cycle on and off like an oven.
3. Cover up those pots and pans. Modesty is a virtue when it comes to keeping heat contained. You'll be able to cook the food faster with the trapped steam and avoid cooling the space.
4. Heat meats and casseroles from room temperature. Most recipes are designed to heat food that has not been sitting in the fridge for the last several hours. If you've assembled a casserole or meat dish ahead of time, remove it at least 45 minutes before cooking to let it relax. This not only saves a couple of bucks, as you won't have to cook as long, but your food will be tastier.
5. Keep your pilot light regulated for the kitchen and (if applicable) the fireplace. If the light is poorly adjusted you'll waste a lot of extra gas. You want to turn the dial until you see a mostly blue flame with a little yellow at the top.
6. Wash all your dishes at once, late at night or early morning. It's annoyingly loud anyway, so set it to run after everyone is asleep. Wash a full, but not overfull, load each time and turn the heated dry off-let the dishes air-dry. Also scrub the dishes ahead of time and run them through a lighter setting that uses less hot water (just make sure you aren't using gallons of heated water to scrub them first).
7. "Bleed" the hot-water heating system. Locate the valve at the end of your radiator and open it with a screwdriver to release trapped air. Hold a cup or bowl under the valve and stop when you hear a hissing noise. When water begins to trickle you've successfully released the air.
8. Don't turn the AC unit completely off during the day. Invest in a thermostat, like the 7-Day Programmable Thermostat, and you can save up to 33 percent on your utility bill. You can easily set a "return" temperature (between 74-78) that is comfortable for you and a "leave" temperature 5-10 degrees higher. If you opt to completely shut down the unit during the day, forget about having any semblance of cool in the evening-plus the compressor could use more energy in the evening rather than a little throughout the day.
9. Keep the freezer well stocked. The operating cost for a freezer filled twice a year versus once a year is only 1/2 as great. Stick a gallon of water in if you don't have enough food to fill it.
Brace yourself for record highs this August! You can be assured of a toasty climax to summer, but by remaining proactive you can still chisel off savings while staying comfortable.
Distributed by McClatchy-Tribune Information Services.
Friday, August 14, 2009
Rethinking what is best in this Financial Market
In these economic times, many people have called me to discuss the changes they've encountered in their finances and how best to overcome them with their mortgage.
Some examples I find are that they are in a current mortgage which is extremely excellent already. These would be a 30 or 15 year fixed in the 5% arena.
The reason for a call is usually a change of employment situation. Here are some options I have recently been able to offer:
$200,000 mortgage on a 15yr fixed at 5.5% = $1660 month currently
1) Change to a 30yr fixed at the same rate = $1152 month - savings of $508 mo
2) Consider a 5 yr ARM at 3.75% = $ 940.00 month - savings of $720 mo
This is 6-8,000 a year saved in the first year alone - payoff a car, college tuition, a new roof on the house....so many options.
For the past eleven years, for me, it has always been about the best benefit looking from the immediate to where do you wish to be in five years (which by the way is the typical life of refinance).
Let's talk ~
Julia
847 837 5302
Some examples I find are that they are in a current mortgage which is extremely excellent already. These would be a 30 or 15 year fixed in the 5% arena.
The reason for a call is usually a change of employment situation. Here are some options I have recently been able to offer:
$200,000 mortgage on a 15yr fixed at 5.5% = $1660 month currently
1) Change to a 30yr fixed at the same rate = $1152 month - savings of $508 mo
2) Consider a 5 yr ARM at 3.75% = $ 940.00 month - savings of $720 mo
This is 6-8,000 a year saved in the first year alone - payoff a car, college tuition, a new roof on the house....so many options.
For the past eleven years, for me, it has always been about the best benefit looking from the immediate to where do you wish to be in five years (which by the way is the typical life of refinance).
Let's talk ~
Julia
847 837 5302
Monday, August 3, 2009
More industry changes......
For applications taken and dated after July 30, 2009 - Federal regulations require a new Truth in Lending Disclosure (TIL) to be issued and signed by a borrower if it is outside the tolerance level of change.
Example - you have been notified by me that you are cleared to close on your loan - you have decided due to financial reasons to roll your escrow in now and we need to raise your loan amount. This change is outside the tolerance level of your initial TIL disclosure. I email the new disclosure to you and you send it back signed and dated today. We must now wait three business days from the day after a received signed TIL to schedule a closing. The only issue I can see with this new procedure will be if we are running long in underwriting and need to extend a lock at this point, which can be an additional charge by the lender.
For all the latest - give me a call!
847 212 6873
Julia Matthews
Your Mortgage Specialist
Example - you have been notified by me that you are cleared to close on your loan - you have decided due to financial reasons to roll your escrow in now and we need to raise your loan amount. This change is outside the tolerance level of your initial TIL disclosure. I email the new disclosure to you and you send it back signed and dated today. We must now wait three business days from the day after a received signed TIL to schedule a closing. The only issue I can see with this new procedure will be if we are running long in underwriting and need to extend a lock at this point, which can be an additional charge by the lender.
For all the latest - give me a call!
847 212 6873
Julia Matthews
Your Mortgage Specialist
Wednesday, July 22, 2009
I am sorry - You are Over-Qualified!
By Rachel Zupek, PrimeCB.com writer
Sherry Shealy Martschink, 57, is a former state legislator, state senator and workers’ compensation commissioner for South Carolina. She’s a recent law school graduate and has experience in journalism, marketing and education. For the past few years during her job search, she’s been told — in not so many words — that she’s overqualified.
“Sometimes the opposition is in the tone of voice rather than the actual wording of the questions and comments,” Martschink says. “An employer may say something like, ‘We are hoping to find someone who will make a career here’ or ‘Why would you want this job after doing such-and-such?’ Another type of question has to do with whether I could be a team player after being in such leadership positions.”
How does Martschink respond to such opposition? Plain and simple:
“If I weren’t willing to do the work, I wouldn’t be applying for the job,” she says.
Geoff Tucker, who has a college degree and six years of experience in his field, has faced opposition more than once during his job search. In one interview, the hiring manager started with, “We both know you’re overqualified,” but went on to say she wanted to do a “gut check ” to determine if Tucker would be OK with the tasks he’d be handling.
“In other words, she wanted to see if I was OK with being versatile to the point of helping clean around the office and refilling the toilet paper in the bathroom,” Tucker says. “I affirmed that I do not have an issue with doing tasks that maybe I haven’t had to do in awhile. I am not that egocentric and I don’t regard these tasks as ‘below me.’”
Many job seekers wonder how being qualified can be a bad thing, but it’s a Catch-22 that many job seekers face today. They can’t get hired for positions relevant to their experience so they apply for jobs at lower levels. The problem is that they can’t get hired for those positions, either, because they’re overqualified.
“Employers are in the catbird seat,” says Kathryn Sollmann, co-founder and managing partner of the Women@Work Network. “The high volume of job seekers makes it possible for employers to hold out for their ideal candidates. You’re not an ideal candidate if you have held a more senior position in the past; employers assume you will leave as soon as you find something at your normal level.”
What’s the deal?Assuming you’ll jump ship when the economy turns around is only one of the many objections employers have to hiring overqualified candidates. For one thing, many job seekers assume that their high credentials automatically mean they are skilled for a more junior job. But, Sollmann says, just because a position is less senior than the one you previously held does not mean that you have the appropriate skills to succeed in that role.
“Take an administrative position, for example. Many mid- to senior-level job seekers haven’t done anything remotely administrative for years,” she says.
Right or wrong, other assumptions hiring managers might have about hiring overqualified candidates include:
· You’ll be bored and unmotivated
· The salary will be too low for you
· You’ll be unhappy
· You’ll leave the minute something better comes along
· You could possibly steal his/her job
· You won’t be able to step down from a leadership role
Hiring managers take overqualified candidates seriously only if they are convincing about a valid reason they want to take a more junior-level job, Sollmann says.
The best reason is saying you have decided that you don’t want to work crazy schedules and are interested in a better work/life balance, she says. If that’s the truth and you’re truly not looking over your shoulder for a senior-level job, employers will consider you for a more junior job.
Tucker says the doubt he gets from hiring managers regarding his experience is unfair.
“They should consider my above-par qualifications as a way to gain additional capabilities on their staff and team. I will bring just as much passion to this role as I would any other,” he says. “I would not apply for a job if it weren’t a fit for me. It’s about the work I’m doing and the contributions I’m making that matter.”
If you’re being told you’re overqualified during your job search, here are seven ways to convince your interviewer otherwise:
1. Admit that you’re worried, tooTell the hiring manager that you are also concerned that it might not be a fit, suggests Duncan Mathison, co-author of “The Truth about the Hidden Job Market.” Promise that if at any point during the hiring process you think the job appears too low or not one where you will bring the full engagement needed to excel in the position, you will withdraw your candidacy. Your willingness to walk away tells them you are motivated if you stay in the game.
2. Take salary off the tableMake it clear that you’re flexible about salary and that your previous earnings are not relevant to your current job search.
“Tell the hiring manager that you work for both green dollars and personal satisfaction dollars,” Sollmann says. “Lately you’ve had a deficit in personal satisfaction dollars and you want a chance to try something new.”
3. Put the issue out there Ask the interviewer if he or she sees any positives or negatives to your candidacy based on your higher qualifications. Get the issue on the table so it can be addressed, Mathison suggests.
4. Use your accomplishments“Tell the hiring manager that you’re proud of your accomplishments and you have proven to yourself that you can perform at a more senior level,” Sollmann says. “Now you’re not interested in chasing titles and promotions. You want to make a contribution at a compelling company.”
5. Distance yourself from your higher qualificationsBe empathetic to those parts of the hiring manager’s job — indicate that you have a clearer understanding of what a manager needs from his people.
“For example, say you were a manager and are applying to an individual contributor job,” Mathison says. “Tell the hiring manager that you are looking for a job that would give you more hands-on technical work and give you a break from the people management and corporate politics.”
6. You want to learnIf you’ve held more senior positions at a different kind of company or in a different industry, tell the hiring manager that the best way to really learn about a new industry is from the bottom up, Sollmann says.
7. Make a commitment“Tell the employer that you know that job hopping is a major don’t in the business world. Say that barring unforeseen circumstances, you are ready to make at least a two-year commitment to the company,” Sollmann suggests.
Rachel Zupek is a writer and blogger for CareerBuilder.com and its job blog, The Work Buzz. She researches and writes about job search strategy, career management, hiring trends and workplace issues.
Sherry Shealy Martschink, 57, is a former state legislator, state senator and workers’ compensation commissioner for South Carolina. She’s a recent law school graduate and has experience in journalism, marketing and education. For the past few years during her job search, she’s been told — in not so many words — that she’s overqualified.
“Sometimes the opposition is in the tone of voice rather than the actual wording of the questions and comments,” Martschink says. “An employer may say something like, ‘We are hoping to find someone who will make a career here’ or ‘Why would you want this job after doing such-and-such?’ Another type of question has to do with whether I could be a team player after being in such leadership positions.”
How does Martschink respond to such opposition? Plain and simple:
“If I weren’t willing to do the work, I wouldn’t be applying for the job,” she says.
Geoff Tucker, who has a college degree and six years of experience in his field, has faced opposition more than once during his job search. In one interview, the hiring manager started with, “We both know you’re overqualified,” but went on to say she wanted to do a “gut check ” to determine if Tucker would be OK with the tasks he’d be handling.
“In other words, she wanted to see if I was OK with being versatile to the point of helping clean around the office and refilling the toilet paper in the bathroom,” Tucker says. “I affirmed that I do not have an issue with doing tasks that maybe I haven’t had to do in awhile. I am not that egocentric and I don’t regard these tasks as ‘below me.’”
Many job seekers wonder how being qualified can be a bad thing, but it’s a Catch-22 that many job seekers face today. They can’t get hired for positions relevant to their experience so they apply for jobs at lower levels. The problem is that they can’t get hired for those positions, either, because they’re overqualified.
“Employers are in the catbird seat,” says Kathryn Sollmann, co-founder and managing partner of the Women@Work Network. “The high volume of job seekers makes it possible for employers to hold out for their ideal candidates. You’re not an ideal candidate if you have held a more senior position in the past; employers assume you will leave as soon as you find something at your normal level.”
What’s the deal?Assuming you’ll jump ship when the economy turns around is only one of the many objections employers have to hiring overqualified candidates. For one thing, many job seekers assume that their high credentials automatically mean they are skilled for a more junior job. But, Sollmann says, just because a position is less senior than the one you previously held does not mean that you have the appropriate skills to succeed in that role.
“Take an administrative position, for example. Many mid- to senior-level job seekers haven’t done anything remotely administrative for years,” she says.
Right or wrong, other assumptions hiring managers might have about hiring overqualified candidates include:
· You’ll be bored and unmotivated
· The salary will be too low for you
· You’ll be unhappy
· You’ll leave the minute something better comes along
· You could possibly steal his/her job
· You won’t be able to step down from a leadership role
Hiring managers take overqualified candidates seriously only if they are convincing about a valid reason they want to take a more junior-level job, Sollmann says.
The best reason is saying you have decided that you don’t want to work crazy schedules and are interested in a better work/life balance, she says. If that’s the truth and you’re truly not looking over your shoulder for a senior-level job, employers will consider you for a more junior job.
Tucker says the doubt he gets from hiring managers regarding his experience is unfair.
“They should consider my above-par qualifications as a way to gain additional capabilities on their staff and team. I will bring just as much passion to this role as I would any other,” he says. “I would not apply for a job if it weren’t a fit for me. It’s about the work I’m doing and the contributions I’m making that matter.”
If you’re being told you’re overqualified during your job search, here are seven ways to convince your interviewer otherwise:
1. Admit that you’re worried, tooTell the hiring manager that you are also concerned that it might not be a fit, suggests Duncan Mathison, co-author of “The Truth about the Hidden Job Market.” Promise that if at any point during the hiring process you think the job appears too low or not one where you will bring the full engagement needed to excel in the position, you will withdraw your candidacy. Your willingness to walk away tells them you are motivated if you stay in the game.
2. Take salary off the tableMake it clear that you’re flexible about salary and that your previous earnings are not relevant to your current job search.
“Tell the hiring manager that you work for both green dollars and personal satisfaction dollars,” Sollmann says. “Lately you’ve had a deficit in personal satisfaction dollars and you want a chance to try something new.”
3. Put the issue out there Ask the interviewer if he or she sees any positives or negatives to your candidacy based on your higher qualifications. Get the issue on the table so it can be addressed, Mathison suggests.
4. Use your accomplishments“Tell the hiring manager that you’re proud of your accomplishments and you have proven to yourself that you can perform at a more senior level,” Sollmann says. “Now you’re not interested in chasing titles and promotions. You want to make a contribution at a compelling company.”
5. Distance yourself from your higher qualificationsBe empathetic to those parts of the hiring manager’s job — indicate that you have a clearer understanding of what a manager needs from his people.
“For example, say you were a manager and are applying to an individual contributor job,” Mathison says. “Tell the hiring manager that you are looking for a job that would give you more hands-on technical work and give you a break from the people management and corporate politics.”
6. You want to learnIf you’ve held more senior positions at a different kind of company or in a different industry, tell the hiring manager that the best way to really learn about a new industry is from the bottom up, Sollmann says.
7. Make a commitment“Tell the employer that you know that job hopping is a major don’t in the business world. Say that barring unforeseen circumstances, you are ready to make at least a two-year commitment to the company,” Sollmann suggests.
Rachel Zupek is a writer and blogger for CareerBuilder.com and its job blog, The Work Buzz. She researches and writes about job search strategy, career management, hiring trends and workplace issues.
Friday, July 17, 2009
Stimulus Package
Since it's inception this spring the Stimulus Programs have been inconsistent on who can do what. We are seeing a loosening of the apron strings
If your loan is serviced by Fannie Mae there has been no restrictions as to who you can refinance through - Freddie Mac has finally allowed the same option but we are waiting from word from individual lenders as to when this will happen - probably end of July....
There is also a hint of allowing those with PMI to refinance under the stimulus package as well
So keep your eyes and ears tuned
Julia
If your loan is serviced by Fannie Mae there has been no restrictions as to who you can refinance through - Freddie Mac has finally allowed the same option but we are waiting from word from individual lenders as to when this will happen - probably end of July....
There is also a hint of allowing those with PMI to refinance under the stimulus package as well
So keep your eyes and ears tuned
Julia
Thursday, July 2, 2009
Heading into the Summer
"If you are 45 years old with a size 6 shoe and living on the east side of the river then you can be approved for a mortgage" - sometimes this is how the approval process feels doesn't it?
Fortunately, after being in this industry for eleven years I am able to be proactive and can side-step alot of the extra paperwork usually required after your loan is approved! So rest assured your best interest and peace of mind always come first.
Speaking of best interest - we have seen rates come back down in the past month to just around 5% on the long term 30yr fixed mortgage rates.
The $8000 tax credit is still out there for First Time Home Buyers (someone who has not owned a home in the past three years)
We are seeing a stabilization of the housing market as inventory for existing homes is down and therefore the downturn in values is evening out as well.
Who do you know that just graduated from college or has been renting for way too many years?
Have them give me a call to start their future on the right doorstep!
Have a wonderful holiday weekend!
Julia
847-837 -5302
Fortunately, after being in this industry for eleven years I am able to be proactive and can side-step alot of the extra paperwork usually required after your loan is approved! So rest assured your best interest and peace of mind always come first.
Speaking of best interest - we have seen rates come back down in the past month to just around 5% on the long term 30yr fixed mortgage rates.
The $8000 tax credit is still out there for First Time Home Buyers (someone who has not owned a home in the past three years)
We are seeing a stabilization of the housing market as inventory for existing homes is down and therefore the downturn in values is evening out as well.
Who do you know that just graduated from college or has been renting for way too many years?
Have them give me a call to start their future on the right doorstep!
Have a wonderful holiday weekend!
Julia
847-837 -5302
Thursday, May 28, 2009
First Time Home Buyers
With the increase in the rates yesterday it is more pressing now for first time homebuyers to make that call and see how much home they do qualify for.
The tax credit of up to 8000k is only valid for closings through November 30, 2009.
That is not that far off, especially when some closings can take 4 months (short sales or foreclosures to name a few)
Who do you know that needs those tax credits of the 8k, real estate taxes and mortgage interest? These items make a big difference come tax time!
Give me a call for that credit check-up!
Julia Matthews
847 837 5302
The tax credit of up to 8000k is only valid for closings through November 30, 2009.
That is not that far off, especially when some closings can take 4 months (short sales or foreclosures to name a few)
Who do you know that needs those tax credits of the 8k, real estate taxes and mortgage interest? These items make a big difference come tax time!
Give me a call for that credit check-up!
Julia Matthews
847 837 5302
Tuesday, March 10, 2009
Reverse Mortgages
PRLog.Org - Global Press Release Distribution
Reversal of Fortune -Fisher Mortgage offers loans that pay seniors to stay in their homes.
By Julia MatthewsDated: Jan 22, 2009
Mundelein, IL, -Fisher Mortgage Company, one of Illinois’ fastest growing mortgage companies, announces the availability of reverse mortgages for seniors considering giving up their homes to increase their income. “At a time when retirees expect to be enjoying the fruits of a lifetime of work, many feel the rug has been pulled out from underneath them because of the financial crisis and rising health care costs,’ states Julia Matthews, loan officer and ten year veteran of the industry. ‘But seniors don’t necessarily have to sell their homes to cover monthly bills, medical expenses, home repair, estate planning, or even travel. If you are 62 or older and own your home, regardless of income, you can qualify for a reverse mortgage.”
How it works. A reverse mortgage works the opposite of a traditional mortgage. Instead of making monthly payments to the bank toward home ownership, the bank pays the homeowner in exchange for equity in the home. The most common, the Home Equity Conversion Mortgage (HECM), is federally insured, backed by HUD, and tightly regulated to allow home owners to use their home equity to increase their personal cash flow without fear of losing their homes. Reverse mortgages offer flexibility to accommodate the needs of the borrower. Loan proceeds can be taken monthly as tax-free income, line of credit, lump sum, or any combination of the three. At the end of the loan, the remaining value belongs to the homeowner or with the heirs of the estate.
Cost advantage. Another benefit of the reverse mortgage is that interest rates on the money paid to the homeowner are generally lower than interest rates on traditional home equity lines of credit. Even the fees incurred in the process can be offset by loan proceeds because they are added to the balance for repayment at the end of the loan. Repayment is due when the last remaining borrower passes away or no longer occupies the property as primary residence.
Addressing recent real estate fluctuations Matthews adds, “Debt limit is a big advantage. In today's volatile housing market, you won't find yourself upside down at the end of the loan. Reverse mortgage holders will never have to repay more than their home is worth.”
Is it for you? Before deciding on a reverse mortgage, compare it to selling your home and moving into another home or rental. Ask yourself these questions: What’s your home worth on the market? What’s the cost of moving to a new home? What can you earn safely on any remaining money? What would alternatives like assisted living cost? Fisher Mortgage offers pre-mortgage counseling at no cost to help seniors sort through their options. For more information on reverse mortgages and how to weigh the benefits against other options, contact Julia Matthews at 847.837.5302 or email: julz1962@att.net.
Reversal of Fortune -Fisher Mortgage offers loans that pay seniors to stay in their homes.
By Julia MatthewsDated: Jan 22, 2009
Mundelein, IL, -Fisher Mortgage Company, one of Illinois’ fastest growing mortgage companies, announces the availability of reverse mortgages for seniors considering giving up their homes to increase their income. “At a time when retirees expect to be enjoying the fruits of a lifetime of work, many feel the rug has been pulled out from underneath them because of the financial crisis and rising health care costs,’ states Julia Matthews, loan officer and ten year veteran of the industry. ‘But seniors don’t necessarily have to sell their homes to cover monthly bills, medical expenses, home repair, estate planning, or even travel. If you are 62 or older and own your home, regardless of income, you can qualify for a reverse mortgage.”
How it works. A reverse mortgage works the opposite of a traditional mortgage. Instead of making monthly payments to the bank toward home ownership, the bank pays the homeowner in exchange for equity in the home. The most common, the Home Equity Conversion Mortgage (HECM), is federally insured, backed by HUD, and tightly regulated to allow home owners to use their home equity to increase their personal cash flow without fear of losing their homes. Reverse mortgages offer flexibility to accommodate the needs of the borrower. Loan proceeds can be taken monthly as tax-free income, line of credit, lump sum, or any combination of the three. At the end of the loan, the remaining value belongs to the homeowner or with the heirs of the estate.
Cost advantage. Another benefit of the reverse mortgage is that interest rates on the money paid to the homeowner are generally lower than interest rates on traditional home equity lines of credit. Even the fees incurred in the process can be offset by loan proceeds because they are added to the balance for repayment at the end of the loan. Repayment is due when the last remaining borrower passes away or no longer occupies the property as primary residence.
Addressing recent real estate fluctuations Matthews adds, “Debt limit is a big advantage. In today's volatile housing market, you won't find yourself upside down at the end of the loan. Reverse mortgage holders will never have to repay more than their home is worth.”
Is it for you? Before deciding on a reverse mortgage, compare it to selling your home and moving into another home or rental. Ask yourself these questions: What’s your home worth on the market? What’s the cost of moving to a new home? What can you earn safely on any remaining money? What would alternatives like assisted living cost? Fisher Mortgage offers pre-mortgage counseling at no cost to help seniors sort through their options. For more information on reverse mortgages and how to weigh the benefits against other options, contact Julia Matthews at 847.837.5302 or email: julz1962@att.net.
Tuesday, March 3, 2009
First Time Home Buyers
Just to clarify who qualifies for the stimulus tax credit as First Time Home Buyers and how much you really get.....as time goes by more bits and pieces seem to be entering the equation
The tax credit is equivalent to 10 percent of the purchase price of the home --which must be a principal residence--but is capped at $8,000. It applies only to first-time home buyers, who are defined as buyers that haven't owned principal residences for three years before making the purchase. The tax credit, however, is subject to income limitations. A single buyer would need an adjusted gross income of $75,000 or less to be eligible for the full credit (For married couples it’s $150,000.) Those who make more may qualify for partial credits. Must close on or before November 30, 2009.
Along with the write-offs of real estate taxes and mortgage interest, this tax credit can add up. Especially if you have been filing as single and have alot of taxes taken out of your paycheck, the chance of a nice refund at the end of 2009 is high.
ATTENTION RECENT COLLEGE GRADS! - Time in school is considered time on the job and lenders will take an acceptance letter as future earned income.
The tax credit is equivalent to 10 percent of the purchase price of the home --which must be a principal residence--but is capped at $8,000. It applies only to first-time home buyers, who are defined as buyers that haven't owned principal residences for three years before making the purchase. The tax credit, however, is subject to income limitations. A single buyer would need an adjusted gross income of $75,000 or less to be eligible for the full credit (For married couples it’s $150,000.) Those who make more may qualify for partial credits. Must close on or before November 30, 2009.
Along with the write-offs of real estate taxes and mortgage interest, this tax credit can add up. Especially if you have been filing as single and have alot of taxes taken out of your paycheck, the chance of a nice refund at the end of 2009 is high.
ATTENTION RECENT COLLEGE GRADS! - Time in school is considered time on the job and lenders will take an acceptance letter as future earned income.
Friday, February 20, 2009
Income Qualifications
Self employed borrowers must produce two years tax returns to qualify for a loan.
Employees of the auto industry now must sign a form stating they have not been notified for layoff or have accepted early buyout/retirement. Job verification will be done the day of closing.
Employees of the auto industry now must sign a form stating they have not been notified for layoff or have accepted early buyout/retirement. Job verification will be done the day of closing.
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