Mortgage Rates Continue Decline

Steve Kent's September 2006 Newsletter

Page 1	<Previous 1 2 3 4 5 6 7 Next>

Mortgage Rates
Continue Decline

      In Freddie Mac's Primary Mortgage Market Survey the 30-year fixed-rate mortgage (FRM) averaged 6.44 percent, with an average 0.4 point, for the week ending August 31, 2006.
      The 30-year FRM is nearly 40 basis points lower than its peak of 6.8 percent in July of this year.
      "By some indicators, personal incomes are growing faster than the cost of housing. Combined with the still historically low mortgage rates,

Mortgage Rates

Source: Realty Times

U.S. averages as of August 31, 2006:

30 yr. fixed:   6.44%
15 yr. fixed:   6.14%
1 yr. adj:        5.59%

this will help to support the housing industry as it levels off from the record highs of the last few years," said Frank Nothaft, Freddie Mac vice president and chief economist.

Reading The Numbers

    The real estate industry is one of the most statistically tracked industries in the country.
     Realtor Economist Dr. David Lerearh warns, however, its easy to misread the numbers.
     Lerearh points out that comparing median home price reports from month-to-month might suggest prices are dropping.
     "Every year since record keeping began in 1968, the median home price has dropped in the fall because fewer families with children are in the market," he explains.
     "As a result, a higher percentage of buyers are singles and childless couples, generally purchasing more moderately priced homes, so we see a seasonal dip in prices. This has nothing to do with appreciation."

Check Your Homeowner's Coverage

Whether your policy is paid through the escrow (trust) account maintained by your lender or paid directly by you, it's a good idea to review your coverage. Some central questions include:

As the value of your home has risen, have you increased coverage?

Are antiques, jewelry, collectibles, and personal items protected?

What is included under your policy -- and what is excluded.

How much personal liability protection is included with your policy? Do you need more?

Does your policy provide for the actual replacement cost in the event of a claim?
For details and information speak with your insurance agent.

Gifts, Giving And
Real Estate

    Did you know that you can give someone as much as $11,000 annually as a gift -- without a gift tax?
     According to the IRS, if you give any one person gifts valued at more than $11,000, it's necessary to report the total gift and possibly be subject to a tax. And while big donors may owe a tax, recipients generally don't.
     "The person who receives your gift," says the IRS, "does not have to report the gift to the IRS or pay gift or income tax on its value."
     "You make a gift," explains the IRS, "when you give property, including money, or the use or income from property, without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift." There are some exceptions to the tax rules for gifts.

Tuition or medical expenses you pay directly to an educational or medical institution for someone's benefit.

Gifts to your spouse.

Gifts to a political organization.

Gifts to charities.
Gifts given over a period of several years and from several donors can accumulate into substantial sums -- often enough for the down payment on a first home. For details see IRS Form 709-A.

Page 1