"Where do we go from here?"

That question from Alicia Keys’ song is on the minds of many Americans, as they wonder where home loan rates are headed after the recent negative news for Bonds.


Last week, Congress was busy at work on negotiations to extend the Bush-era tax cuts. That news kept a lid on any improvement for Bonds and home loan rates, due to the prospect of an ever-increasing deficit.

And adding to the troubles for Bonds and home loan rates last week was news that inflation is growing in China... and growing fast. How does that impact us? Remember, it's a global economy, so Bond prices all over the world worsen on news of inflation, which is bad for home loan rates.

So the big question is: Will home loan rates go back down?

Step three in our Home Buyers series ~ Pre-Approval.

Get Pre-Approved For A Loan

Generally, it is recommended that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying. The pre-approval process involves meeting with a lender and authorizing
them to examine your current financial situation and credit history. On the basis of this examination the lender will provide you with a document that details how much you can borrow to buy a home.


The benefits of pre-qualification include:

The loan process – financing your home purchase

(Another part in our series from California Association of REALTORS for Home Buyers.)

Unless you’re one of the rare few able to pay cash for your home, central to buying
is finding the right lender and mortgage product. There are many different kinds of lending institution, offering a wide range of loans and special programs. In fact, you should diligently research your options and shop around for a mortgage with as much care as you take when looking for a home.
Here are the main steps to securing the mortgage that best suits your needs...

5 Inexpensive, Easy-to-Purchase Gifts

Black Friday's almost here. And, after that there's the busy holiday season. But just because it's the holidays, doesn't mean shopping has to be hectic or expensive. The following list offers 5 easy-to-get, inexpensive gift ideas.

"ACTIONS SPEAK LOUDER THAN WORDS."

And this week, we saw a whole lot of loud action in the volatile financial markets...and also heard a lot of words, as the debate over the Fed's latest round of Quantitative Easing continued. Here's what you need to know about what was said...and what happened to home loan rates. 

If you've been wondering what Quantitative Easing (QE) actually is, it's the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy. The Fed's goal for this latest round of Quantitative Easing (dubbed QE2) is threefold:

1. To create inflation and avoid a deflationary economy
2. To lower the unemployment rate
3. To boost Stock prices

Financial Benefits of Decluttering

It pays off to unload items you no longer need (or never really needed at all). Check out this great article by Cameron Huddleston of Kiplinger.com.

I have been in a decluttering mode lately. It was sparked by moving my mom from her three-bedroom home to a one-bedroom apartment in my house -- and having to pare down her belongings. Spending weeks going through all her stuff to figure out what she did and didn't need (then selling and donating the unnecessary items) made me want to remove all the clutter from my life, too. A few articles I recently read fueled this desire even more.

"INFLATION IS WHEN YOU PAY $15 FOR THE $10 HAIRCUT YOU USED TO GET FOR $5 WHEN YOU HAD HAIR." - Sam Ewing.

And regardless of how much hair you have these days... one thing we can watch to help a get sense of where rates are going is inflation.
Right now, the headline numbers in the US show little inflation overall... but we are already seeing significant inflation in particular items like commodities, food, and oil - which are being driven by a weak US Dollar, and increasing demand from emerging countries like China and India. In addition, the global market reacted late last week to higher-than-expected inflation in China. This is important to us because Bonds and home loan rates hate inflation, no matter where the whiff of it comes from.

Here’s why. Think of inflation as a hot air balloon and rates as the basket under that balloon. As the balloon (or inflation) rises, the basket (or rates) must rise as well.

So, if inflation moves higher in China, their government has to raise rates to fight inflation. And if rates move higher in China, global investors seeking the highest yield will move away from the relatively meager returns seen in US Bonds - and move their Bond buying money into juicier yields found abroad.

There are so many opinions by so many smart people on both sides of the inflation argument, but right now it is all about what the Bond market thinks. And the recent market action shows just how quickly sentiment in the market can change. Remember, it was just a few weeks ago that fears and whispers of deflation helped the Bond market - and home loan rates - improve.

But now with the Fed intent on avoiding deflation and in fact creating inflation through another round of Quantitative Easing (or QE2), the entire Bond market - including Mortgage Bonds - have began to react negatively. Remember, Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds, in a bid to stimulate the economy by:

Creating inflation

Lowering the unemployment rate

Raising Stock prices

While those goals may be good for the overall economy, we need to remember that all three are very unfriendly to Mortgage Bonds and home loan rates.

The good news is, despite ending the week worse than where they started, home loan rates are still near historic lows for the time being. If you or someone you know is looking to take advantage of low rates, now is the time. Please call or email me today to get started.

Step two in our Home Buyers guide

2. Contact A REALTOR®
Buying real estate is a complex matter at the best of times, given that there are so many factors to consider and no two homes or transactions are alike. However, with all the unique opportunities and potential pitfalls of the current market, it’s even more important for you to contact a REALTOR® once you’ve definitely decided to buy.

In choosing a REALTOR® to guide you through the property search, financing, negotiation and transaction processes, you should consider their local market knowledge, experience and track record.

The Top 10 Ways to Save

Janet Bodnar shares her most practical and effective strategies for spending less and keeping more cash in your pocket.

By Janet Bodnar, Kiplinger.com

I recently reached a milestone in my life on Twitter: The number of people following my tweets passed the 1,000 mark. I’m still a piker compared with champion Twitterers like Ashton Kutcher, but four figures sounds impressive to me. To thank everyone, I promised that I would tweet my top ten savings tips.

"TEN PEOPLE WHO SPEAK MAKE MORE NOISE THAN TEN THOUSAND WHO ARE SILENT." - Napoleon Bonaparte.

And there have certainly been more than ten who are speaking out - and using some pretty strong words - as experts and analysts are looking forward to some major events this week, including the midterm elections this Tuesday, the Fed Statement on Wednesday, and the Jobs Report on Friday. To say the least, that’s a very influential trifecta of events - so let’s take a look at some of the strong and colorful lingo being used - and why.

The home buying process – a brief, step-by-step overview

This is the first in a series of segments highlighting Realtor.com's new Home Buyers Guide. Be sure to check back as much as you'd like for future additions to the home buying process!

We'll start here with The home buying process – a brief, step-by-step overview

5 Facebook Posts That Put You at Risk

Be sure you're not sharing too much information with friends, family and others online.

By Cameron Huddleston, Kiplinger.com

There was a big outcry recently when it was revealed that personal data of Facebook users had been posted to a database open to everyone. (See Congress to Crack Down on Facebook.) Facebook users, naturally, were concerned about their privacy.

Yet, every day Facebook and other social network users publish personal information that could put them at risk without thinking twice. "An awful lot of people think when they get online and communicate with their friends that they are invincible," says Adam Levin, chairman of Identity Theft 911. A seemingly benign post or piece of information could make you a target of identity thieves and traditional crooks. To protect yourself, here are five things you should avoid posting online.

"EVERYTHING’S COMING OUR WAY..."

Those words from Carlos Santana’s song come to mind following last week’s release of the Fed’s September Meeting Minutes, as well as a speech from Fed Chairman Ben Bernanke. The message was pretty clear - another round of Quantitative Easing (QE2) is coming our way! Remember that QE is the concept of the Fed becoming a buyer of Treasuries and Bonds, in a bid to keep interest rates low and therefore stimulate the economy. And while all the talk had Bonds behaving in a volatile fashion - ultimately causing home loan rates to worsen for the week overall - what was said specifically... and what does it mean?

5 Factors to Watch in a Housing Recovery

Although the housing market has come a long way over the past year, the recovery is still very fragile. As one of our Coldwell Banker Residential Brokerage managers put it, the market takes one or two steps forward, and then one back. This is often what happens in an economic recovery after the initial burst of improvement. Rarely do recoveries go in a straight line, as much as we’d like them to. Federal tax credits certainly helped bring the market off the bottom, but with their expiration, the question many economists are pondering is what – if anything – is needed to make sure the market doesn’t fall back into a double-dip.

I recently came across an interesting article on Investopedia.com entitled...

Safer Driving... There’s an App for That!

A recent study by the National Highway Traffic Safety Administration found that distracted driving was the leading cause in 448,000 accidents and 5,474 highway deaths in 2009. That represents a 16% increase from 2008.

"EVERYBODY’S WORKING FOR THE WEEKEND...." (Loverboy, 1981) Or... are they?

Unfortunately, many folks out there these days sure wish they were working at all... and the Labor Department reported last Friday that the US lost 95,000 jobs in September. What else did the Jobs Report say and what could the news mean for home loan rates? Read on for details.

Save Money by Shipping Your Luggage

You may spend less by using a shipping company - rather than the airlines - to get your bags to your destination.
By Cameron Huddleston, Kiplinger.com

You may be able to save money by shipping your luggage rather than checking it in the next time you fly. The idea might sound absurd. But if you do the math...

"I CAN NO LONGER STAND HERE WAITING FOR YOU TO DECIDE..."

Those lyrics from the band Chicago’s 1980’s hit sum up the sentiments of many market analysts and traders after last week’s back and forth statements from Fed officials about the possibility of another round of Quantitative Easing... otherwise known as "QE2".
 
As we stated last week, many analysts have been feeling that QE2 was very likely, if we continue to see weak economic reports. But comments made by a number of Fed officials throughout the week indicated that QE2 may still be up in the air. For example, Atlanta Federal Reserve President Dennis Lockhart stated, "there is growing sentiment that further accommodation through large asset purchases is coming...

5 Factors to Watch in a Housing Recovery

Although the housing market has come a long way over the
past year, the recovery is still very fragile. As one of our
Coldwell Banker Residential Brokerage managers put it, the
market takes one or two steps forward, and then one back.

This is often what happens in an economic recovery after
the initial burst of improvement. Rarely do recoveries go in a
straight line, as much as we’d like them to. Federal tax credits
certainly helped bring the market off the bottom, but with
their expiration, the question many economists are pondering
is what – if anything – is needed to make sure the market
doesn’t fall back into a double-dip.

I recently came across an interesting article on
Investopedia.com entitled, “5 Factors to Watch in a Housing
Recovery” which was posted by freelance writer Stephen
Simpson. The article reviews the key factors that Mr. Simpson
recommends should be watched in anticipation of an eventual
housing recovery which is important for the health of the
American economy.

Winter’s Just Around the Corner. Are You Ready?

We’ve past the point of no return. The Autumnal Equinox occurred last week, and we’re now headed into the shorter, colder days of fall and eventually winter. Whether you live in a cold northern climate or a moderate southern climate, there are a number of steps you need to take to make sure your house and yard are ready for the impending winter season. By following the advice below, you can make sure your home is ready... inside and out! 

It’s been said there’s a pot of gold at the end of every rainbow.

Yet, after last week’s regularly scheduled meeting of the Federal Open Market Committee, the Fed helped gold seem more "charmed" than ever. What happened, and what does this mean for home loan rates? Read on for details. As expected, last week the Fed decided to keep the Fed Funds Rate (which is the lending rate banks charge each other for the use of overnight funds, and it is used as a base rate that many other lending rates are based on) at 0.25%. The Fed also reiterated that economic conditions warrant keeping the Fed Funds Rate low for an "extended period". 

When Your Child's School Asks You to Give, Give, Give...

Here's how to handle all those requests for classroom supplies, fundraiser contributions and more.

By Cameron Huddleston, Kiplinger.com

Parents, I know you're feeling the pull on your purse strings from you children's schools. You're being asked to contribute supplies to your children's classrooms (not just pencils and paper, but even cleaning supplies). You're expected to donate money to help with the schools' fundraisers. You're getting notes from teachers each week about this field trip or that art project you have to pay for if your children want to participate. 

I know because I'm a parent with one child in a public school and one child in a private preschool. As president of the parent committee at one of my children's schools and vice-president of the parent-teacher organization at the other, I also know how much the schools need financial support from parents. So how do you balance your desire to help with the reality of your own limited funds -- and avoid looking like a cheapskate if you can't open your wallet every time the school asks? 

Even though this is your child and his school we're talking about, you have to approach this like you would any other financial situation. You have to...

"NOT ONLY CAN WATER FLOAT A BOAT - IT CAN SINK IT ALSO."

"NOT ONLY CAN WATER FLOAT A BOAT - IT CAN SINK IT ALSO." Wise words, but you don’t need to know that Chinese proverb to know that a knife can cut both ways. The same is true with the strong ties between the Chinese and US economies. For example, news came out last week that Chinese factories stepped up production in August, which helped ease concerns of a double-dip recession in US and, as a result, helped move Stocks higher earlier in the week. But additional news regarding China is also impacting the Bond market - and could impact home loan rates in the future, depending on how the events unfold.

Simple Formulas for Affordability and Saving

Simple Formulas for Affordability and Saving

When people decide to buy a home, the monthly payment is a crucial factor. Conservative underwriting state that borrowers should allocate no more than approximately 30% of their gross monthly income for a house payment. Looked at from another perspective, this means if your monthly income is $4,000, you should keep your house payment under $1,200 a month.


How much home can you afford?

"ACTIONS SPEAK LOUDER THAN WORDS."

Despite the markets being closed last Monday for Labor Day, there was plenty of market action... and plenty of words from the Fed. So what happened, and what was said? Read on for details.
 
After the recent 4-month rally in the Bond markets, which has led to some of the best home loan rates in history, money has started shifting over to the Stock market. Why has this happened?

Last-Minute Vacation Tips

Labor Day Weekend is fast approaching and if you think it’s too late to head out of town for the weekend, think again. Here are some great tips for planning an adventure, last minute or otherwise.

"It all depends on how we look at things."

Those words by Carl Jung describe the importance of perspective... which is exactly what last week’s economic reports on home sales require! Existing Home Sales were reported well below expectations and a significant 27% decline from last month. As you can see in the chart below, New Home Sales were also ugly - coming in well below expectations and at the lowest reading on record. But as Carl Jung said, let's take a step back and gain a wider perspective about how we look at those reports... and what they mean!

"There is nothing wrong with change, if it is in the right direction." Winston Churchill.

And certainly, seeing our economy improve is change in the right direction. But what steps will get us there... and how will those steps impact home loan rates. Here’s what you need to know.

How to Succeed on Webcam Interviews

How to Succeed on Webcam Interviews

Webcams have steadily grown in popularity in households across the country. Now, companies are embracing the technology as a cost-effective, timesaving way to conduct interviews. And businesses aren’t the only ones turning to this technology. Colleges and universities - such as the University of Georgia, Pennsylvania State University, Arizona State University, and Wake Forest - are also using the technology to interview applicants before admitting them.
If you or someone you know is in the process of applying for a new job or to a university, the following information can help you put your best foot forward if you’re asked to participate in a webcam interview.

WORKIN' NINE TO FIVE... WHAT A WAY TO MAKE A LIVIN'..." Dolly Parton.

But unfortunately, last week's Jobs Report was worse than expected, showing more and more people aren't workin' nine to five or any other kind of full time job. So what does this mean for our economy and home loan rates? Read on to find out.

Last Friday's Jobs Report showed that 131,000 jobs were lost for the private and government sectors, versus the 87,000 job losses expected. To add insult to injury, the revisions for June showed nearly 100,000 more jobs lost than had been previously reported. While some of the losses were due to the government laying off temporary census workers, the private sector was also disappointing, showing 71,000 job creations for July, worse than expectations of 83,000... and well short of the market's hope of 100,000. Rounding out the report, the Unemployment Rate remained steady at 9.5%, just below the 9.6% anticipated.

In addition, something to keep in mind is that the State governments are now under major pressure because of growing budget deficits. 

With tax revenues declining and budget cuts needed, States are finally having to make cuts like the private sector already has. As they start to catch up in making cut-backs to headcount, this could cause the unemployment rate to worsen. Not very good news, as an improvement in the labor market is needed to fuel the economic recovery... and especially disappointing, considering the money that has been injected to try and remedy this situation.

Also in the news, the Commerce Department reported last week that Personal Spending and Incomes were unchanged in June, due to a slowing of the economic recovery in the spring. In addition, the Savings Rate increased as consumers cut back on spending.

Why is all this significant... and what does it have to do with interest rates? It has to do with something called the velocity of money. Even though the government keeps pumping money into the system, nothing happens until that money is spent or lent, and passes from one hand to another, or

one business to another. The speed at which this money passes between parties is called the velocity of money. With the job market still very sluggish, consumers aren't spending much money these days... and businesses are still reluctant to spend money making investments in their business. With present velocity at low levels, inflation remains subdued... however, once velocity increases, the excess money in the system will cause inflation.

And remember, inflation is the arch enemy of Bonds and home loan rates... which means that even the scent of inflation can cause home loan rates to worsen. 

While we certainly want to see better Jobs Report numbers in the future, Bonds and home loan rates were able to benefit from the poor report. Remember, weak economic news often causes money to flow from Stocks to Bonds as traders seek to protect their investments in the safer haven of Bonds. As a result, Bonds and home loan rates ended the week slightly better than where they began.

7 Ways to Teach Financial Responsibility to Children

If the current economic climate has taught us anything, it’s that financial education and responsibility are critical in today's fast-paced, wired world. All too often, however, children grow up immune to the financial world around them. As a result, they're often ill equipped to manage their own finances when they become adults and leave home.

With the economy in the news almost daily, now’s a perfect time to start educating your children about how to manage money more responsibly. The tips below can help you get started.

THEY SAY IT TAKES TWO TO TANGO...

... And the relationship we see in the markets between Stocks and Bonds is a dance of its own, as one often improves at the expense of the other... while one kicks higher, the other often dips lower. But why... and how does this impact home loan rates? Here’s what you need to know.

10 Things We Overpay For: You Can Save Big by Buying Cheap Alternatives Instead

10 Things We Overpay For:
You Can Save Big by Buying Cheap Alternatives Instead

By Joan Goldwasser, Kiplinger.com
Does the avalanche of news about layoffs, business losses and a declining stock market have you looking for ways to cut your spending so you can beef up your savings? We're here to help, with suggestions for less-expensive alternatives to ten everyday purchases (for more ideas, go to www.BillShrink.com, which tracks cell-phone plans and credit cards).

"UNCERTAINTY AND MYSTERY ARE THE ENERGIES OF LIFE."

And while the Bond market may agree with R.I. Fitzhenry's words about uncertainty, most investors in the Stock market don't... just ask Fed Chairman Ben Bernanke. Last week, Mr. Bernanke testified before the Senate and House Banking Committees, making several cautious comments on the state of the labor market and inflation, as well as stating that the Fed would be ready to take action should economic conditions worsen. 

They say the only constant is change... And more change is coming,

	...as the sweeping Financial Regulation Bill was passed by the Senate last week and will be signed by President Obama in short order to become law. So what does this change mean... and how will it impact home loan rates? Here's what you need to know.

"Over there... over there..." The old patriotic song hit it on the head...

...in terms of what has been driving market action lately... news from overseas. In the absence of US economic reports last week, Stocks received some help from headlines "over there." Late last week, the European Central Bank (ECB) left interest rates at a record low - which wasn’t really a surprise, given the sharp economic slowdown and uncertainty in Europe. 

What happens in Washington doesn't stay in Washington!

And there was a lot happening in Washington this past week, between the Fed’s two-day meeting and actions in Congress. So how will all of these happenings impact you…and home loan rates, which are near all-time lows? Read on for details.

Kids and Credit Cards: A video

	Kids and Credit Cards Using credit cards wisely is important for people of all ages, especially for young people just starting out.

"NOBODY CAN GO BACK AND START A NEW BEGINNING...BUT ANYONE CAN START TODAY AND MAKE A NEW ENDING."

Those words by the poet Maria Robinson should hold a special meaning - and warning - for anyone thinking about buying a home or refinancing, especially in light of the article by Former Fed Chairman Alan Greenspan which hit the wires last week.

In his Wall Street Journal op-ed piece, Mr. Greenspan stated: "Don't be fooled by today's low rates. The government could very quickly discover the limits of its borrowing capacity." He also added that the present low inflation and low long-term rate environment has fostered a "sense of complacency (within the government) that can have dire consequences."

Six Money Mistakes of Newlyweds

Six Money Mistakes of Newlyweds
By Erin Burt
Kiplinger.com

Whether you're planning a walk down the aisle soon or you've already gotten hitched, watch out for these financial pitfalls that can strain even the strongest marriage.

Four words no one wants to hear soon after his or her wedding day: "We made a mistake."
I'm talking about financial choices - not your choice of spouse. Unfortunately, many newlyweds set themselves up for failure soon after they say "I do." If you bring bad money habits to the marriage or fail to come up with a plan to merge your financial lives, you could potentially doom your relationship to money trouble - and endless arguments. Not exactly "happily ever after."

However, nothing says "I love you" like the desire to start your marriage on the right financial foot (roses, schmoses). Here are six common pitfalls that trip up new couples. Steer clear of these, and you'll decrease the money tension and increase the harmony in your new life together.

1. Keeping money secrets
Money is one of the most common sources of arguments in a marriage, so it's best to simply avoid the subject altogether, right?

Wrong! Some of the most heated arguments stem from failing to discuss financial backgrounds, expectations and attitudes from the start. Communication is key to the survival of any relationship, and bearing your financial soul to your partner is no exception.

Ideally, you want to have this conversation before walking down the aisle. After all, there are good marital surprises ("Didn't I tell you I'm a gourmet chef?") and bad surprises ("Didn't I tell you I have $20,000 in credit card debt?"). Full disclosure is in order here - and that includes your shoe fetish or gambling habit. For tips on what to discuss, see Ten Questions to Ask Before Saying 'I Do.'

2. Not having a budget
Now that you're settling into your new life together, it's time to discuss the b word. No, not baby. Budgeting. You're merging two spending habits and two saving habits into one household. So even if you had a budget when you were single (pat on the back), you've got to make a new one with your husband or wife to include his or her income, debts and monthly expenses. That will help to ensure you have enough money left over for that other b word - Bahamas.

Use our budget worksheet to start. Your first step is to write down your fixed expenses - such as your rent, car payment, insurance premiums and student loan payments. You should also make a habit of contributing to your savings or investments as if you were paying a fixed bill each month. Then write down your flexible expenses, such as utility and phone bills, transportation costs, groceries, trips to the ATM, and miscellaneous purchases. Track your actual spending for a couple of months to see where your money really goes, then find the spending leaks and plug them. Building a budget is a great way to set common spending and saving goals, identify problems, and work together to fix them.

3. Giving one person the financial reins
The honeymoon's over, and it's time to get down to the nitty-gritty of the daily finances. Who will physically pay the bills, monitor the investments and crunch the taxes? One person may be more inclined toward these tasks, or you may decide to split the responsibility or trade off each month.

There's nothing wrong with letting one person take over the family finances, as long as both partners are okay with that decision. But that doesn't mean the other partner should be excluded. It's important for each person not only to feel involved in the big financial decisions but also to have an understanding of the day-to-day finances. You each need to know all your different account information, passwords and bill due dates in case anything were to happen to the other person. And no matter how you divide the responsibility, it's a good idea to have a regular "money date" each month or so to make sure each of you is in the loop. You should go over your budget, review your savings progress and discuss upcoming expenses together. How's that for keeping the romance alive?

Also, if you choose to combine your finances after you wed, make sure that major purchases and savings accounts are held in both of your names so that each of you has equal access and can maintain a credit rating. You don't want to find out in the event of a divorce that your name wasn't actually on the car title or savings accounts.

4. Dragging debt down the aisle
What's his is hers, and what's hers is his. Whether you decide to combine your finances or maintain a separate approach, if one of you brought debt into the marriage, it becomes a problem for both of you. You'll need to work together to come up with a plan to pay it off. However, you should never officially commingle your debt. Doing so could hurt the credit score of the other partner and make it difficult for one or both of you to get credit later. Keep existing credit-card and loan accounts in the original holder's name.

If you can help it, it's best to avoid beginning your marriage in the red. Many newlyweds make the mistake of going too far into debt to pull off the wedding of their dreams, go on an exotic honeymoon, or buy brand-new furniture and appliances for their home. Before you dig too deep, you should sit down together to determine which expenses are necessary and which are worth a splurge - and come up with a plan to pay for it all before you spend it.

5. Sweating the small stuff
Marriage is about compromises and simply letting some things slide. So she squeezes the toothpaste tube from the middle, and he doesn't pick up his socks. Big deal. You'll both soon learn to pick your battles and save your energy for issues that really matter.

That goes for picking your money battles, too. I remember my first financial argument with my husband. We had been married two weeks, and we were doing our grocery shopping together. He wanted to buy the brand-name chocolate chips, and I felt strongly that we should save 75 cents and go with the off-brand chips. After a lengthy and heated exchange, we divided up the rest of the shopping list so that we wouldn't have to look at each other for the rest of our outing. Then we drove home in a huff. Lesson learned: Never go grocery shopping when you're hungry, tired and irritable. Oh, wait. Financial lesson learned: Don't sweat the small stuff. Was the argument really worth 75 cents? No way.

Of course, if all the little stuff is adding up to a big drain on your finances and causing you to live beyond your means, bring it up at your next money date and work together to find ways you can both cut back. (Ah, there's that compromise idea again.) But take note: It's important that you build a little "mad money" into your budget for each person to spend at his or her own discretion. (Can you imagine asking your spouse for permission every time you wanted to buy a cappuccino and a muffin, or grab a drink with some friends after work?) But as far as the big stuff goes, make it a rule to consult the other on major purchases. You don't want to come home and unexpectedly find a brand-new Mercedes in the driveway, and the bill that goes with it.

By the way, I now go grocery shopping alone. We decided as a couple it's what's best for our marriage.

6. Failing to plan for an emergency
No one likes to think about bad things happening, but in all the excitement of your engagement, planning your wedding and moving in together, it's easy to overlook this important aspect of financial planning. One of the best gifts you and your spouse can give each other is financial security and protection from life's storms.

First, assess your emergency stash of cash. Every couple should have enough money available to cover from three to six months worth of living expenses. You never know when the car will break down, one of you will lose a job or you'll have an unexpected medical bill. Learn more about how to build your financial foundation and where to keep the money.

Then, you need to make sure you have adequate insurance coverage, including health, auto, renters or homeowners, and possibly life insurance. Learn more about the types of insurance everyone should have, and how to get the appropriate coverage.

Did you get married without a prenuptial agreement? It's not too late to protect the financial interests each partner brought to the marriage. Consider drafting a post-nup with your lawyers. Plus, make sure you each have written a will to divide your assets in the event of your death.

"YOU'RE RIDING HIGH IN APRIL AND SHOT DOWN IN MAY..."

Just like the old Sinatra tune "That's Life," the Dow Jones Industrial Average traded as high as 11,258 in mid-April - but May wasn't quite so good for Stocks, as the Dow lost 8% in May, suffering its worst one-month decline in 70 years. 

In the end, May was quite a slippery month all the way around, dominated by headlines of Greece and Oil...and so far in the first week of June, it hasn't been much different. 

But one important economic report that managed to break through the news from across the globe was the official Jobs Report, which came in far worse than most estimates. The bad news pressured Stocks lower on Friday - and with the money flowing out of Stocks and into Bonds - helped home loan rates see a bit of unexpected improvement on Friday.
 
As you can see in the chart below, the headline number in the Jobs Report showed 431,000 jobs created in May. On the surface, this would seem like a very good thing, but that number was not only well below the 500,000 that were expected, but also was primarily made up of temporary census workers hired by the government. In fact, 411,000 of the 431,000 hires were exactly this - temporary census workers who are certainly glad to have a job, but who will join the ranks of the unemployed once again when the 2010 Census has been completed. 

-----------------------
Chart: U.S. Nonfarm Payrolls (By Month)

The headline job creations number that you hear about in the media comes from the business or Establishment Report, also known as Current Employment Statistics...and it can be misleading, as it includes something called the "birth-death ratio," which is a model or estimate of businesses created or closed within a given month, and based on historical data, supposedly foretells how many jobs were created or lost as a result. And this estimating method can be very highly inaccurate, particularly during times of changes in business cycles and the economy, such as we are going through presently. 

But even the Household Survey - which previously showed 1.1 Million jobs created over the past three months - showed 35,000 jobs lost during May. This is important because the Household Survey or Current Population Survey (CPS) may be a more accurate reading, since actual households are contacted. Additionally, this is the survey that gives us the Unemployment Rate. 

Overall, the Jobs Report was disappointing, but at least there still were some modest job creations. Additionally, average hours worked did improve, which is a good sign. And the Unemployment Rate did drop from 9.9% to 9.7%. So a bit of good news was found in the Report, and as Sinatra might say. "You Can't Take That Away From Me."

IS IT TIME TO REMODEL…OR BUY A NEW HOUSE?

Have you been pondering whether or not to remodel your kitchen or bathroom?
Does there just not seem to be enough space? Are your things constantly getting cluttered? Many homeowners are facing similar issues and are starting to pose the question to themselves, “Is it time to remodel or buy a new house?”

IT'S A SHOWDOWN...THE BULLS VS. THE BEARS.

But we're not talking about the Chicago Bulls who were recently knocked out of the NBA playoffs. We're talking about the Bull Market that Stocks have enjoyed over the past months...that is now slipping back lower. 

So why are these animal terms used to describe action in the Stock market anyways? The terms "Bull" and "Bear" are used because of the way those animals attack. Bulls attack using an upward thrusting motion with their horns, and Bears attack by moving their powerful claws in a downward motion. So an upward market is termed a Bull market, while a downward market is called a Bear market. 

Remodeling Your Bathroom: A Project Worth Investing In

The economy is showing signs of recovery. In fact, just last week, Retail Sales were reported up for the seventh straight month - thanks in large part to the 6.9% gain at hardware stores and garden centers. If you've been thinking about spending some money of your own at a hardware store for a project around the house but aren't sure you can justify spending the money, we've got two words for you - bathroom remodel.

"IT'S A SMALL WORLD AFTER ALL..."

That sentiment was definitely felt in the financial markets last week, as the problems in Europe continue to dominate the headlines and influence market direction around the globe. So what exactly is going on...and what does all of this mean for our economy and for home loan rates? Read on for details.

"You bring me up and down!"

While Janet Jackson was singing about love and relationships, investors around the world could surely relate during last week's push and pull of wildly erratic markets. And we could be set up for an encore performance in the week ahead as anxiety persists in the European financial system.

The drama began on Monday when news of a pending bailout package for Greece sent Bonds lower, as investors pulled out of this "safe haven" and started looking toward stocks.

The very next day Stocks were back down, and Bonds were pushed up and out of their trading range, as 40,000 Greeks took to the streets to protest details of the bailout plan. 

Capping off the week of volatility was Thursday afternoon's Stock Market freefall scare, during which the Dow plummeted 998 points then recouped more than 600 points - all in the span of 15 minutes. 

Thursday's mysterious event, characterized as a "near-panic", may have been caused in part by a wave of electronically submitted sell orders being executed at a mind-boggling pace. Remember, a majority of trading in the markets is done by computer. With Stock prices down significantly, many computer triggers for sell orders were hit. 

These triggers began executing sell orders at "market price." With the enormous flood of market sell orders coming in, bidders pulled back, so there were very few bids to satisfy the sell orders. In such situations, the computer will keep seeking out the next available bidder in an effort to fill the order...no matter how low that bid is. One extreme example was the trading of Accenture (NYSE: ACN) stock, which went from $40 down to $0.14 (yes, 14 cents), then came all the way back to close at $41.09. 

The Bond market, which generally has an inverse relationship to Stocks, responded to these tug-of-war pressures and events with exaggerated ups and downs, as seen in this week's bond chart below.

This kind of tug-of-war makes the market very volatile - and underscores why it is more important than ever to work with a true mortgage professional who understands the market.

Counteracting some of the international angst last week was some positive domestic data and increasing sentiment that the US economy is improving.
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The Stock market's erratic behavior frustrated traders and investors last week.

In the end, strong domestic economic data, like Friday's better than expected official Jobs Report, was overshadowed by the drama in Europe and received less fanfare than it deserved.

According to the Labor Department, 290,000 jobs were created in April, well ahead of estimates for 187,000 new job creations. The increase was the biggest rise since March 2006. Overall, non-farm payroll employment has expanded by 573,000 since December, with the vast majority of the growth occurring during the last two months. 
Despite the job growth, the Unemployment Rate ticked up from 9.7% to 9.9%. 

The main reason was an increase in the labor force of 805,000. That's because unemployed individuals who do not look for a job for four weeks are removed from the labor force. When those people move back into job search mode, they are counted again - which can cause the Unemployment Rate to rise even when more jobs are being created. 

OVERALL, THE ECONOMY IS SHOWING SIGNS OF A RECOVERY. BUT IT'S STILL IMPORTANT TO SAVE, SPEND, AND BUDGET WISELY.

Celebrating Cinco de Mayo...and Its Connection to the United States

Celebrating Cinco de Mayo...and Its Connection to the United States

This Wednesday marks the celebration known as Cinco de Mayo, or "May 5th", in Spanish. Although many people have heard of this holiday - and even join in the celebrations with gusto - plenty of folks are not aware of what this holiday is all about. And most people don't realize that the event being commemorated may have actually played an important role in shaping the United States that we know today.

They say "the only constant is change..."

...yet last week's meeting of the Federal Open Market Committee ended without any major changes...no change to the Fed Funds Rate, and no change to the now-famous verbiage in their Policy Statement, stating that rates will remain low for an "extended period" of time. While the Fed does not control home loan rates, what does all this mean for those seeking home financing in the months ahead? Read on for details.

"IT'S ALL GREEK TO ME." The markets continue to be focused on Greece...

The markets continue to be focused on - and influenced by - Greece's ongoing financial saga. Stocks took a hit last Thursday when Greece's budget deficit was reported to be worse than previously thought, causing uncertainty and anxiety in the markets. The next day, the saga continued

"NOTHING GOLD CAN STAY"...

...or so says Robert Frost's famous poem. But the whole market wonders if Goldman Sachs can "stay gold", following last week's shocker headline that the Securities and Exchange Commission is charging the financial giant with fraud. 

6 Money Skills Kids Should Master By Age 18

If the current economic climate has taught us anything, it's that financial education and responsibility are critical in today's fast-paced, wired world.

"THE FUTURE INFLUENCES THE PRESENT JUST AS MUCH AS THE PAST."

While getting your mind around that brain-bender from philosopher Friedrich Nietzsche might be a bit of labor...the point of influence is very well-taken. And while the present health of the housing market is certainly influenced by the present health of the labor market - last week brought a bit of welcome good news on the housing front. 

"YOU DON'T KNOW WHAT YOU GOT UNTIL IT'S GONE - AND I FOUND OUT A LITTLE TOO LATE..."

The words from Chicago's hit song from the 80's sums up the market's sentiment on the ending of the Federal Reserve's Mortgage Backed Security buying program. And the resulting volatility for home loan rates that has already begun.

THEY SAY THAT MARCH COMES IN LIKE A LION AND GOES OUT LIKE A LAMB...

... But this year, the exact reverse is true when it comes to home loan rates - for quite a few reasons, including the end of the Federal Reserve acting as a large buyer of Mortgage Backed Securities (MBS). The "demand" created by their fifteen-month program has helped Bond prices stay high and home loan rates stay low. 

"I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW. " Og Mandino.

And wondering what kind of action will happen on Healthcare reform was certainly on everyone's mind last week. But what does this mean for the markets and home loan rates?

5 Ways to Get Out of Debt Faster

Making smart choices with your money is always a good idea, but it's especially important if you are working to become debt free. Check out this video from www.Kiplinger.com for 5 ways to get out of debt faster.

"IF WE HAD NO WINTER...THE SPRING WOULD NOT BE SO PLEASANT."

17th-Century poet Anne Bradstreet's words ring true not only for the seasons, but also for last week's Retail Sales numbers. Just days before Sunday's "spring forward" into Daylight Savings Time, the retail sector looked to be unfreezing and showing at least a little spring in its step.

5 Careers You May Not Have Considered...But Perhaps Should!

In the wake of last week's employment news, now is an ideal time to take a look at careers that are expected to grow in the coming months and years. Recently, US News & World Report released the results of its study on the Best Careers in 2010. The good news is there are a lot of jobs that are on the rise - including a number of careers that many people may not have considered.

If you or someone you know is looking to make a career move in today's challenging work environment, here are 5 
careers to consider.

"WORKIN' NINE TO FIVE - WHAT A WAY TO MAKE A LIVIN'..." Dolly Parton.

...But full time employment is nothing to gripe about these days - last week's Jobs Report showed that there are millions of people who would love to be working full time...or even working at all. The labor market continues to struggle, though it has shown improvement from its worst levels.

"LIKE SLUGGISH WATERS THROUGH A MARSH..."

"LIKE SLUGGISH WATERS THROUGH A MARSH..." The poet Sir Walter Scott wasn't talking about the economic recovery, but his words paint a pretty vivid picture...and after last week's economic reports, perhaps a pretty accurate one on the state of the recovery.

Rates May Be Headed Up Soon...But Why?

You've heard a lot over the last several months about historically low home loan rates...but lately, you've probably been hearing the buzz that interest rates may be heading up in the near future, due in part to the Fed ending their purchases of Mortgage Backed Securities.
All of this begs the question: How and why do rates move...and what is happening right now?
The answer involves a number of factors and can seem complex. But it doesn't have to be!
To help you understand how interest rates move, take a look at this easy to understand video. You'll learn what the Fed has been doing to keep rates low, as well as the connection between interest rates and Mortgage Backed Securities.
Take a look at the following video now for an easy explanation:

"OPINION HAS CAUSED MORE TROUBLE ON THIS LITTLE EARTH THAN PLAGUES..." Voltaire.

And lately, there have been a lot of opinions about inflation being voiced from Fed officials, respected economists, and the media. But what does all this talk really mean for our economy and home loan rates? Here's what you need to know.
On Friday, the Consumer Price Index (CPI), which measures the prices US consumers pay, came in lower than expected for January. The chart below shows the year-over-year headline CPI at 2.6%, below expectations of 2.8%.  What's more, when volatile food and energy are removed from the equation, the "Core" Consumer Price Index was actually negative - and the last time that happened was 28 years ago.

A Seller’s Market?

A Seller’s Market?

 Hard to believe, but many homes drawing multiple offers again as listing shortages continue

My how things have changed in just one year! A year ago at this time, many homes were languishing on the market as buyers stayed on the sidelines, worrying about their jobs, the sharp decline in their 401k accounts, and whether housing prices would ever rise again. Today, many of those buyers have swallowed their fears and are out in force once again, spurred by an improving economy, a solid recovery in the financial markets, and federal home buyer tax credits that will expire this spring.

Keeping Your Home Safe from Water Damage

Preventing water damage in your home is important at any time of year, but particularly in the winter when the cold weather can wreak havoc on plumbing. Here are some tips to make sure your water bill is as low as it should be...and that your home is as safe and dry as it needs to be:

"IT AIN'T OVER TIL IT'S OVER." Yogi Berra.

And whether you find those words deeply wise or simply puzzling...The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over - and this translates to home loan rates rising in the near future. As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

HOMEBUYER TAX CREDIT DEADLINE QUICKLY APPROACHING

With only three months until the new $8,000 first-time homebuyer and the $6,500 existing home buyer federal tax credits are set to expire, time is running out on an opportunity that buyers and sellers may not see again. The tax credit, which was originally created in mid 2008, then expanded in January 2009 and extended again this past November, was only designed to be a short-term incentive to drive more buyers into the housing market.That’s why many people in Congress are saying that, come April 30, 2010 when the credit expires, “That is it!”

"BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST - THE PARACHUTE." G.B. Stern

And last week's Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad...depending on which survey you looked at, and what numbers you focused on.

First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month's read of 10.0%. But what do these numbers actually tell us?

"THE NINE MOST TERRIFYING WORDS IN THE ENGLISH LANGUAGE ARE: `I'M FROM THE GOVERNMENT, AND I'M HERE TO HELP.`" Ronald Reagan.

And regardless of if those words do indeed terrify you or perhaps give you confidence, the government held center stage last week, with a pivotal Federal Reserve Board Policy Statement, President Obama's first State of the Union address, and Ben Bernanke's confirmation for another term as Fed Chairman.

First, let's start with the Federal Reserve Board, who on the heels of their most recent meeting reiterated their important line, "rates will remain low for an extended period" in their Policy Statement. This tells us that the "carry trade" which has pushed Stocks, Commodities and even Bonds higher may continue, as the driving force of this trade - low interest rates - will likely provide a tailwind. This piece of the Statement was good news for Bonds and home loan rates. However, this was offset by further confirmation that the Fed's Mortgage Backed Security purchase program will indeed end March 31st, 2010. This was bad news for Bonds and home loan rates, and overrode the "extended period" statement in terms of Bond market and home loan rate action.

Then on Wednesday evening, President Obama delivered his first official State of the Union address, and just like in his initial post-election speech, a big theme was job creation.

"If you are losing a tug-of-war with a tiger, give him the rope before he gets to your arm. You can always buy a new rope." Max Gunther.

Such a sweet sentiment...but definitely not one that the markets adopted this week, as both Stocks and Bonds battled back and forth near key technical levels.

The markets were closed on Monday in honor of the Martin Luther King, Jr. holiday, but then the Bulls and the Bears in the Bond market spent the first part of the week pushing and pulling Bond prices above and below their 200-Day Moving Average. This level is important because it can often set the stage for price direction for an extended period of time. Bonds were finally able to break above this important level, which was good news for home loan rates.

"THERE ARE NO SECRETS IN LIFE, JUST HIDDEN TRUTHS THAT LIE BENEATH THE SURFACE." From the Showtime TV hit, "Dexter".

The highly anticipated Jobs Report arrived last Friday morning, showing 85,000 jobs lost during December...and while this was a bit worse than expected, the report also carried some good news, in that the prior month's revisions showed that November actually had a final tabulation of job gains for the month, for the first time since December 2007. Additionally, the Unemployment Rate remained stable at 10%. While this all seems to indicate some level of improvement in the labor market - you do have to look beneath the surface to clearly understand the present realities for the labor market.

"We will open the book. Its pages are blank. We are going to put words on them ourselves.

The book is called Opportunity and its first chapter is New Year's Day." Edith Lovejoy Pierce. And as we begin a New Year, fresh with opportunity - here's what you need to know about the last week of 2009.

The holiday shortened week had some fireworks, and not just those ringing in the New Year. The Treasury Department auctioned a whopping $118 Billion in T-Notes last week, and the added supply helped bring on some volatility in Bonds. And although the financial markets in general have been quite volatile of late anyways, the potential for increased volatility is typically greater during a holiday week. This is because trading volume levels decrease, and with fewer traders and investors pushing transactions, it opens the door for exacerbated market moves, as one large trade can cause prices to rise or fall more sharply.