Federal Reserve Stops Mortgage Purchases

A recent article from the NPR indicated that The Federal Reserve will stop buying mortgage-backed securities on Wednesday March 31. This marks the end to a massive program that’s been helping the housing market recover.

When the economy showed signs of decline over a  year and a half ago, the government wanted to drive down interest rates for homeowners to stimulate the economy by making it cheaper to buy or refinance a house. The problem was that lenders were not issuing loans, even to homeowners with good credit. As a result, interest rates rose. 

The Federal Reserve aimed to solve this problem by buying up a lot of mortgages. Because of this, they became the largest mortgage-backed security investor in the world. In fact the total amount of mortgage-backed securities now totals more than $1.2 trillion worth in all.

The Fed was buying 90 percent of new mortgage-backed securities and now is only buying about 30 percent or less. As of April 1, 2010 they will stop buying altogether. So the question is what happens then? Barry Habib, chairman of the board of Mortgage Success Source, which tracks rates and trends for mortgage brokers, says that when the Fed stops purchasing these securities, it will leave a vacuum in the market that will push up interest rates.

What many people don’t know or understand is that the government actually has been making quite a bit of money on this program. The U.S. Treasury earns about $50 billion a year from interest that homeowners pay on loans the government owns. However, there is the risk that some of the more than $1 trillion worth of home loans that might go bad.

Relocating Your Automobile

If you have purchased a new home and are relocating to a new city that is a good distance away you may need to make a decision about how you will move your car.  If you are relocating across country, you may not want to get behind the steering wheel for thousands of miles as well as put the mileage and wear on your vehicle.  Fortunately, there are some differrent options available for you and your vehicle.

Some people who have older cars find that it is easier to sell their cars or donate them to charity for a tax deduction before they move.  However, if you are like most people,you will want to keep your car rather than going to the expense and trouble of purchasing a new vehicle once you reach your new home.

Many businesses specialize in transporting your vehicle for you.   There are three basic methods of getting your car to your new home if you are not going to drive it yourself:

  • Moving your car in the same van that will haul your household goods
  • Using a professional auto mover
  • Hiring someone to drive your car for you

Moving your car in the same van as your household goods is as easy as driving it up a ramp and into the van, where it is secured in a separate compartment from your furniture and other goods.  A reputable moving company that provides this service will give an accurate estimate and references long before you drive your car on board.  Cars are heavy, though, so this can be an expensive method.  However, it is the method most guaranteed to put you back behind the wheel as soon as the moving van unloads.

Professional auto movers specialize in transporting vehicles on an open or in a closed truck.  Some provide hub-to-hub service (you will have to go to a central location near your new home to pick up your vehicle) while others provide door-to-door service (they pick up your car at your old home and deliver it to your new address).   Professional auto movers are highly expert at getting cars and other vehicles safely from one place to another.   However, unless your car mover coordinates perfectly with your household goods mover, you may find that you reach your destination before your vehicle does.

If you decide to have someone drive your car for you, consider a company that matches drivers with vehicles needing transport.  In this case, the company should screen drivers carefully and assumes all insurance liability for the trip.  Drivers usually pay their own expenses after the first tank of gas, so the cost of transporting this way tends to be reasonable.  However, if you don’t like other people driving your car in general, this is definitely not the method for you.   Coordinating arrival time with your move-in date may also be a little more difficult.

Before letting any company or person take your car, be sure  that your car will be inspected carefully.  Any pre-existing damage, marks, and wear should be noted.  The company you hire will provide insurance coverage for your car, so this pre-trip inspection is an important step.  It is a good idea to take pictures or shoot a video of your car before the move for your own records.

Here are a few tips for the move:

  • Disclose any mechanical problems your car is having, especially if you are going to work with a company that provides a driver to get behind the wheel for you.
  • Deactivate your car alarm if you are shipping your car in a van or on a truck.  This prevents the draining of your battery if the alarm is triggered while the car is being moved.
  • Make sure there is fuel in your car so you can drive it at your destination.  A quarter of a tank should be plenty.  If you are using a driver, you will probable be expected to deliver your vehicle with a full tank of gas.
  • Roof racks, bicycle racks and other non-permanent accessories should be removed if transporting in a van or on a truck.
  • Remove valuables from the car.  If you have an automatic pass for commuting on toll roads, take it out of the car too so you do not receive any unintentional charges during the trip.

There are many choices available if you need to move your car that can help to take some of the stress out of relocating. Do your homework and compare costs and always get references and proof of insurance.

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Summer and The Games Starting in Madison

In less than 24 hours, Summer will officially begin.  The Wisconsin Sports Development Center didn’t bother waiting for the “official” start of the season though.  The Summer Badge State Games will begin today.  These wonderful games have become a favorite Wisconsin tradition for many.  I love telling new buyers moving to the area about them!

The games began in 1985 right here in Madison.  They started as, and continue to be, a great community event for the whole state providing athletes of all ages and the abilities to participate in an Olympics style competition.  In order to participate you must be a resident of Wisconsin.  Currently 35 counties participate and host events.

Some highlights that will be held in Madison

  1. Rowing on Lake Wingra at Vilas Park in Madison.
  2. Tennis at the Cherokee Country Club in Madison.
  3. Bowling at Bowl-A-Vard Lanes, Madison.
  4. Dodgeball at Pooley’s in Madison.
  5. Closing Ceremony is going to be held at the Rhythm & Booms – Madison (Fireworks Display).

Our Wisconsin Weather, How does a Roof Take It?

Madison area winters generally never fail to bring plenty of snow and cold, and this winter was no different. Looking at the 10 day forecast for Madison on weather.com, you will see that 34 degrees is the warmest projected temperature, with 2 degrees being the lowest. I am sure if we take a look ahead into the very near future, we will see that the daily temperature range will get even larger. We will experience days in the 50’s with nights in the teens.Here in Madison, this time of year and type of weather poses some maintenance issues for homeowners. This is especially true with respect to the roof after a long winter of ice damning. The effects of ice damning, if left ignored, can create some serious roof damage, gutter damage, water problems, and potential mold issues. I therefore wanted to post a few tips that my help in keeping down the potential damage and consequent expense.

1. Be proactive about checking your roof. You should make a habit of inspecting your roof at every season change. Look for buckling, loose or curled shingling, and interruptions in flashing. An easy way to perform this inspection is with a quality pair of binoculars.
2) Check your gutters. If there are a lot of granules from the roof in your gutters, then chances are the asphalt on your roof is becoming brittle and in need of attention.
3) If you have a metal roof, look for signs of deterioration and ensure there are no open seams.
4) Inspect your attic several times as the temperature warms up. You may find evidence of leaking as the snow and ice begins to thaw.

If you find that your roof is in need of attention or further inspection by a professional, you should contact someone immediately. Leaving your roof in a compromised state will undoubtedly lead to many areas of damage. If you need some assistance locating a qualified professional, just give me a call. I’ll gladly provide you with some resources that will help you find a contractor in your area.

Wisconsin Real Estate Update

The Wisconsin Realtors Association submitted a press release today detailing some positive news about the 3rd quarter real estate market in Wisconsin.  In comparison to many parts of the country, Wisconsin’s real estate market is still going strong.  Although there is no question that the number of home sales per quarter has decreased when compared to the last few years, the actual median price of homes has still continued to rise.  It actually rose by 2.4% compared to that of the median price in the 3rd quarter of 2006.  When comparing home sales to the third quarter of last year, the numbers are not as attractive with the total number of house sales dropping by 9.8% in the state of Wisconsin.  This is far better however than the national decline which had a significant drop of 13.7% for the same time period.

With interest rates remaining very favorable at 6.38% for a 30-year fixed and Wisconsin real estate still proving to be a positive investment, there is no reason to hesitate when considering home ownership in the Madison and Middleton areas.  If you would like more information about this Wisconsin Realtors Association press release or to discuss the very stable Madison and Middleton real estate market, please give me a call.