Rates Fall
After rising ever so slowly for the last six weeks or so, mortgage rates fell ever so slightly as the month drew to a close.
According to HSH Associates, a New Jersey-based mortgage information company which contacts more than 2,000 lenders each week, "muted economic data" put a damper of on loan rates, with the 30-year fixed-rate loan closing at an average of 6.37 percent.
Freddie Mac, one of the nation's largest providers of funds for home loans, put the 30-year rate at 6.17 percent, down from 6.22 percent the week before. Last year at this time, though, Freddie Mac had the 30-year fixed-rate at 6.22 percent.
"Mortgage rates slipped following the latest reports of moderation in inflation rates from the core producer price and consumer price indexes," said Frank Nothaft, Freddie Mac vice president and chief economist. "Excluding food and energy, the core inflation rate for consumer prices rose 2.5 percent year-over-year, the smallest annual growth since May 2006. This helped calm markets and brought mortgage rates down."
As the month ended, Freddie Mac's survey reported the following rates:
- For 15-year fixed-rate loans, the charge averaged 5.89 percent, down just a hair from 5.9 percent the week before. A year ago, the rate was 6.17 percent.
- For one-year Treasury-indexed adjustable rate mortgages, the rate averaged 5.45 percent, also down slightly from 5.47 percent. At this time last year, the fee was 5.63 percent.
- For five-year hybrid ARMs in which the rate remains fixed for the first 60 payments and adjusts every 12 payments thereafter, the rate average 5.92 percent, down from 5.93 percent the previous week. A year ago, the rate on five-year hybrids was 6.17 percent.
As always, points and other loan charges should be considered to reflect the true cost of the mortgage. A point is equal to 1 percent of the loan amount. At the end of the month, lenders were charging roughly 0.5 to 0.7 points
Honoring Older Citizens
Next month is Older Citizens Month. It has been since 1963, when May was designated by President Kennedy as Senior Citizens Month. In 1980, President Carter changed the name to Older Citizens.
Whatever you call them, folks age 65 or older have the highest home ownership rate among all households. Some 81 percent of 36.8 million people in this age cohort own the roofs over their heads. This compared to just 43 percent of the households at the other end of the age spectrum -- younger than 35.
Incidentally, seniors account for 12 percent of the total U.S. population. By 2050, this age group will comprise 21 percent of all Americans.
Killer Stoves
Some 15 to 20 million American kitchens are equipped with a range that can tip over and crush, scald or burn whoever is standing in front of it, according to consumer groups Public Citizen, U.S. Public Interest Research Group and the Consumer Federation of America.
Since the early 1980s, manufacturers of ranges began using lighter-gauge steel to reduce costs, even though they quickly learned that this resulted in a tendency for the lighter-weight appliances to tip over when weight was applied to the oven door. And according to the groups, the manufacturers and the government have known about the problem for nearly 20 years.
Indeed, after receiving numerous reports of severe accidents caused by tipping stoves, industry-standard organizations Underwriters Laboratories and the American National Standards Institute both developed national, voluntary safety standards that require electric and gas ranges manufactured after 1991 to remain stable when 250 pounds of pressure is applied on the oven door for five minutes. The standards also require sellers to install the anti-tip brackets that manufacturers agreed to supply, but the retailers rarely install the brackets.
However, while retailers are all aware of the safety hazard, the delivery people they contract with often are not equipped or trained to perform the installation service, and the sales people rarely mention the issue to the buyer. As a result, most homeowners who purchase the ranges do not know that the units are not secure and are unaware that the brackets are necessary for stability.
"There have been more than 100 reported cases of death and injury from scalding and burns due to hot foods and liquids spilling from the stove top, and from the weight crushing anyone in the path of the tipping ranges," said Public Citizen President Joan Claybrook. "Considering the lack of consistent reporting and the millions of homes with these ovens, we believe the numbers of those maimed or killed by ranges tipping over are much greater."
To learn more about this safety issue, visit killerstoves.com .
Hurricane Season Is Coming
Hurricane forecasters are predicting above-normal storm activity this season.
The upcoming hurricane season is poised to spin out 17 named storms this year, five of them majors, according to the Tropical Meteorology Project at Colorado State University. The government's official forecast from the Climate Prediction Center isn't due until May, but National Hurricane Center director Bill Proenza is on record as saying this coming hurricane season is likely to be above normal. Consequently, residents in hurricane prone regions have ample time to prepare for the worst and a survey reveals what areas are most at risk. The six-month hurricane season begins June 1.
After 2005 hurricane's battered the Gulf Coast, forecasts of the 2006 season from both the university project and federal weather center over-estimated the ferocity and number of storms. They both say that was because the now nearly dissipated El Nino system interrupted ocean currents that contribute to storms. But with El Nino out of the picture, the climate will return to an above-normal pattern of hurricanes.
While no one can predict exactly where a storm makes landfall until perhaps just hours before, Bert Sperling's BestPlaces.com offers a list of "Hurricane Hotspots," locales most likely to be hit next by a major hurricane.
Junk Mail
You can put a stop to those mail-box filling mortgage offers that begin arriving soon after you apply for a mortgage. Of course, you also can let them keep coming until you find a better offer. But assuming you already did your homework, you should take a look at the new Federal Trade Commission alert, "Shopping For a Mortgage? Your Application May Trigger Competing Offers."
When you apply for a mortgage and the lender pulls your credit report, your file becomes a target for other companies with money to lend. It's not that the original lender is selling information about your every move. Rather, creditors are taking advantage of federal law that allows credit bureaus to identify you and other mortgage applicants to companies that want to pitch their product to you in the form of "prescreened" or "preapproved" credit.
It's the credit bureaus and other consumer credit reporting agencies that legally sell to lenders and others lists of consumers who meet certain criteria. Those criteria could include the fact that you just applied for a mortgage, live in a certain ZIP code, have a certain credit score, a certain number of loans and, to the creditor, appear ripe for an offer.
The prescreened offers don't affect your credit score or credit standing -- nor do several or so credit applications for the same type of credit within a short period of time. The offers also don't guarantee you credit. You'll still be subject to a credit check and other application procedures, depending upon the lender's requirements.
But they can be a nuisance. So if you'd rather do your own comparison shopping, or have already done so and don't want to be bothered by other offers, you can make them go away by calling 888-567-8688 or visit OptOutPrescreen.com . These are the only two federally-sanctioned ways to stop the flood of unsolicited offers.
