In Freddie Mac’s results of its Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 6.14 percent with an average 0.4 point for the week ending November 30, 2006, down from the previous week when it averaged 6.18 percent. Last year at this time, the 30-year FRM averaged 6.26 percent. This is the lowest the 30-year FRM has been since the week ending January 26, 2006, when it averaged 6.12 percent.
The 15-year FRM averaged 5.87 percent with an average 0.4 point, down from the previous week when it averaged 5.91 percent. A year ago, the 15-year FRM averaged 5.81 percent. This is the lowest the 15-year FRM has been since the week ending February 2, 2006 when it averaged 5.81 percent
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.95 percent, with an average 0.5 point, down from the previous week when it averaged 5.99 percent. A year ago, the five-year ARM averaged 5.76 percent. This is the lowest the 5-year ARM has been since the week ending March 16, 2006, when it averaged 5.93 percent.
One-year Treasury-indexed ARMs averaged 5.46 percent with an average 0.5 point. At this time last year, the one-year ARM averaged 5.16 percent.
“Mortgage rates drifted lower this week, bringing long-term rates to levels below those of this time last year,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Mortgage applications for home purchase in November have remained healthy, due largely because of the drop in mortgage rates and a softening in home prices in some areas.”
Year-End Tax Savings
As the end of the year draws near, many folks look for last minute deductions and shelters to avoid big tax bills. Why not take advantage of a tax break that pays you at tax time and keeps paying you every month?
In 2005, Congress passed the Energy Policy Act, which provides homeowners a tax credit of up to $500 for improving the energy efficiency of their homes in 2006 and 2007. Improving the energy efficiency of a home pays at tax time and continues putting money back in your pocket every month in the form of lower energy bills. The tax credit is in effect for improvements made between Jan. 1, 2006 through Dec. 31, 2007.
One of the easiest ways to save money on your utility bills and qualify for the tax credit is to improve the level of your home’s insulation. You’ll need to add between an R-19 and R-30 insulation to your attic to qualify for the tax credit. You also may want to consider adding insulation to your unfinished basement and crawlspace, which are often under-insulated or not insulated at all.
The tax credit for existing homes is for 10 percent of the final cost of qualified home improvement products for a maximum of $500. Make sure you keep your receipts when purchasing energy efficient products that qualify for the tax credit. You’ll also need a certification statement from the manufacturer stating that the product installed qualifies for the tax credit. It usually can be found on or inside the package.
No Change in Loan Limit
The conforming loan limit, perhaps the most intently watched number in the mortgage business, will remain unchanged next year at $417,000.
The limit is the legislatively set ceiling on the size of loans that can be purchased or guaranteed by Fannie Mae and Freddie Mac, the two government-sponsored financial institutions which keep local lenders awash with cash for home loans.
Because the enterprises bring a certain amount of standardization to the market, and because investors throughout the world believe the GSEs’ securities are backed by the full faith and credit of Uncle Sam, rates charged on loans at or below the limit are often 0.25-0.5 percent less expensive than so-called “jumbo” loans that are above the ceiling.
In addition, “subprime” borrowers who don’t measure up to Fannie Mae and Freddie Mac’s strict underwriting standards also pay higher rates, no matter how much they are borrowing.
Because limits on government-insured loans are based on the conforming loan limit, it is likely the ceiling on FHA mortgages in high-cost areas will remain at $362,790 next year and $200,160 in most other markets.
Tips For A Safe Holiday Season
As you pull out those holiday storage boxes filled with decorative goodies and embark on your seasonal embellishing, take extra care as you hang those outdoor lights, choose that tree, and spark those holiday candles.
In any given year, about 8,700 people go to the emergency room because of holiday-related injuries, according to the U.S. Consumer Product Safety Commission. Additionally, Christmas trees are the cause of about 400 fires a year, resulting in 20 deaths, 70 injuries, and an average of $15 million in property loss and damage.
Here are some safety tips to keep in mind as you begin your holiday decorating and lighting:
Trees:
- Keep your tree watered.
- It should be difficult to pull the needles from the branches.
- The needles shouldn’t break when bent between your fingers.
- The trunk butt should be sticky with resin.
- When the trunk is bounced on the ground, needles shouldn’t shower to the ground.
- Trees dry out. Be sure the tree is away from fireplaces and other heat sources.
- Place away from traffic. If you buy an artificial tree, make sure it is fire-resistant.
Lights:
- Only use lights that have been tested for safety (look for a designated label on packaging).
- Discard any damaged sets.
- Use no more than three standard-size sets of lights per extension cord.
- Never use electric lights on a metallic tree.
- If you are considering using lights outdoors, check the labeling to ensure they are certified for outdoor use.
- Fasten outdoor lights securely to trees, house walls, or other firm supports to protect from the wind.
- Turn off all lights when you go to bed or leave the house.
