Federal Reserve: No Change on Target Fed Funds Rate

The Federal Open Market Committee (FOMC) of the Federal Reserve did not move to increase the Fed's target federal funds rate, which is currently 0.00 to 0.250 percent. Although the committee acknowledged further progress toward achieving the Federal Reserve's dual goal of maximum employment and an inflation rate of two percent, committee members indicated that they want to see further improvements in both areas before raising the federal funds rate.

In its customary post meeting statement, the FOMC said that it may not raise rates when both goals have been achieved. This statement may have been meant to calm ongoing speculation that the Fed will soon raise rates. The statement also said that FOMC members may "elect to keep the target federal funds rate below levels the committee considers normal in the longer term." This stance suggests that the Fed wants to be very sure that economic improvement is on a solid track before it raises rates.

The statement further indicated that the FOMC is not completely influenced by the Fed's goals of maximum employment and two percent inflation; instead, the committee said that it will consider ongoing domestic and global news and economic reports along with readings on financial and economic developments as part of its decision to raise or not raise the target federal funds rate.

Analyst reactions to the decision not to raise rates suggests that the Fed is likely to raise rates at its September meeting and possibly again in December.

Fed Chair Janet Yellen's Press Conference

Fed Chair Janet Yellen gave a scheduled press conference after the FOMC statement was issued and answered questions on a variety of topics. Ms. Yellen noted that retiring baby boomers are expected to take up slack in employment lags; as boomers retire, they drop out of the work force and reduce the number of people actively seeking employment.

Ms. Yellen also noted that when the Fed does raise rates, seniors and retirees could benefit from higher yields on savings.

In response to questions about when the Fed will raise its target federal funds rate, the Fed Chair said that the Fed has not decided when to raise rates and said that unfolding economic developments would play a role when the Fed does decide to raise rates.

Ms. Yellen encouraged emphasis on when the Fed will make its first rate hike. She recommended focusing on "the entire trajectory" of rate increases, which some analysts took to mean don't panic about the first rate increase.

Save Some Additional Cash with Our Guide to Lowering Your Monthly Mortgage Payment

If you are like many other homeowners, your home mortgage payment is the single largest expense in your monthly budget. This is a fixed expense that you will typically be responsible for until your loan is paid in full or until you sell your home, and you may have a 15, 20 or even 30 year term on your mortgage.

If your home mortgage payment has become unaffordable or burdensome for you to manage with your current financial situation, rest assured that you may be able to save some additional cash each month without selling your home. Refinancing your existing mortgage can provide you with important financial benefits to help you better manage your budget.

How Refinancing Lowers Your Mortgage Payment

Refinancing your existing mortgage essentially will replace your existing loan with a new loan, but you may not understand how this will result in a lower mortgage payment. When you initially applied for your current mortgage, your payment was fixed based on the interest rates at the time as well as the original loan balance. Since that time, you likely have reduced your loan balance considerably, and interest rates may be improved as well. In fact, some homeowners are able to refinance to a lower rate as well as pull equity out of their home in the process.

How Home Equity Could Further Reduce Monthly Expenses

While your main goal for refinancing a home mortgage may be to reduce the large monthly mortgage payment that you are responsible for, the fact is that you may be able to use your home equity to further reduce your monthly expenses. For example, you can use extra funds provided to you through a refinance to pay off an outstanding student loan, a car payment or a credit card balance. Some homeowners may even be able to pay off most or all of their debts by tapping into their home equity.

It is common for homeowners who have a high and unmanageable mortgage payment to feel overwhelmed and even trapped by their financial situation. However, as you can see, lowering your mortgage payment and even reducing some of your other expenses may be easier to do than you might think. If you are interested in learning more about how refinancing your mortgage may help you to improve your financial situation, you can speak with an experienced mortgage professional today.

Thinking About a Major Renovation? Three Reasons to Consider Adding a Second Story

When your home is no longer fully functional for your needs, you may be thinking about moving into a larger home with a more functional floor plan. While this is one option to consider, another option is to renovate your existing home. You could build a wing onto your home, or you could add a second story to the property. There are several reasons why adding a second story to your floor plan may be the best solution for you.

Use the Existing Footprint

When you build a wing outward from your home, you will need to pour more foundation and take up a section of the yard with the new addition. By building upward, you can keep your yard intact and use the existing footprint. You may even be able to build into an attic space without making any structural changes to the home itself.

Improve Property Value

When you add a second story onto your home, you essentially will be adding more usable square footage with finished out space. This can have a direct and significant impact on your property value. You will not need to pay moving expenses or worry about if your existing furniture will fit into a new home. You will be able to enjoy the benefits of a larger and more functional home coupled with the ability to recoup most or all of the cost of the renovation through an increase in property value.

Keep Costs to a Minimum

By using the existing footprint of your home and by avoiding pouring more concrete for the foundation, you will be able to keep costs to a minimum. In some cases, such as if you build into the existing attic, you will not need to adjust the frame or roof to find the additional space you need. You may still need to add drywall, HVAC ducts and other features inside the frame of the home to take advantage of this space, but it generally is more cost-effective to build upward rather than outward when renovating a home.

A major renovation is one that can improve the style of your home, but it often will improve the function and increase value as well. If you are thinking about renovating your home, you may research how beneficial it can be to add more space upward on your home rather than to build outward. Talk with your mortgage professional today to see what financial options you may have available to you for renovating your home.

The Pros and Cons of Putting in More Than 20 Percent as a Down Payment on Your New Home

One of the most common questions home buyers ask today relates to how much money they need to put down on a home. There are mortgage requirements in place that establish minimum down payment requirements, and some home buyers will barely have enough to pay the minimum down payment as well as closing costs. However, if you have access to more money, you may be wondering if you should make a larger down payment. There are several points to consider to determine if making a larger down payment is right for your financial situation.

Having Liquid Assets Available After Closing

It is important to consider how much available cash you will have access to after closing if you do make a larger down payment. There are many costs associated with home ownership to think about, such as unexpected repair costs, paying a homeowners' insurance deductible if a mishap occurs and even furnishing your new home. Once your funds are invested in your home, you will only be able to tap into those funds by refinancing. You may consider placing extra cash into a more liquid asset if you do not have a lot of extra cash available to you.

Qualifying for a Lower Interest Rate

Depending on your loan program, you may be able to qualify for a lower interest rate if you place more money down with your new mortgage. This is not always the case, so you will want to review this option with your mortgage representative. Keep in mind that interest will impact your mortgage payment as well as the amount of your mortgage interest tax deduction at the end of the year.

Having a Lower Mortgage Payment

When you obtain a lower loan amount with your mortgage, your mortgage payment will be lower. This can make your budget more affordable going forward. Because a mortgage payment is generally one of the higher expenses in a budget, the importance of this cannot be understated. An alternative to this is to establish the loan on a shorter term. Using a shorter term option generally makes your payments higher, but with a larger down payment, it may be easier for you to manage a shorter term length and to pay your mortgage off more quickly.

Using Funds for Other Purposes

You should also consider other ways that you could use your additional funds. For example, you may have high interest rates debts that you could pay off, or you may be able to invest the additional funds in the stock market. For some, tying funds up in a home is practical, but it is not always the best option available.

There is no catch-all answer regarding how much money you should use as a down payment. Each situation is unique, and you should speak with your mortgage representative to discuss the pros and cons of a larger down payment with your specific loan application.

Four Ways You Can Enhance Your Home's Value Before You List It for Sale

Whether you've decided it's time for an upgrade or you're moving on to a new city, if you're selling your home you may be wondering how you can boost its value before listing it up for sale.

In today's blog post we'll share four ways that you can spend a bit of time and money upgrading your home before it hits the local real estate market.

Spruce Up Your Landscaping

You'll want your home to make a great first impression, and as such a great place to start is by sprucing up your lawn, gardens and other landscape features. Your grass should be a healthy green, free of weeds and freshly trimmed.

If you can, look to add seasonal flowers in your front gardens as this can add a bit of color to your home. Keep any shrubs or trees trimmed away from the home so that buyers can get a good look.

Apply A Fresh Coat Of Paint

Another excellent way to increase your home's "curb appeal" is by applying a fresh coat of paint to the house, the trim around the windows and the front door.

Of course, painting a house is a big job so this might be one that is best left to a team of professionals. For added effect, replace the fixtures on the front door and pick up new house numbers.

Upgrade Your Kitchen Appliances

Many buyers will focus intently on your kitchen and the condition of everything from your flooring to your cupboards. If you have an older refrigerator or stove you'll want to replace those with newer stainless-steel models.

You'll also want to ensure that you have quality countertops – if you're replacing them, consider going with granite as it's popular with younger buyers.

Install A New Set Of Bathroom Fixtures

Finally, if you haven't renovated your bathroom recently you'll want to invest in modernizing your faucets, mirrors and other fixtures. The decor of your bathroom should match that in the rest of your home, but also stand out in its own unique way.

If you have an old bathtub with stained porcelain, consider replacing it with a glass-enclosed waterfall shower. Don't forget about your light fixtures; if you find the bathroom is a bit dark, replace these with something that adds brightness.

Six Key Questions to Ask when Hiring a Real Estate Agent to Market and Sell Your Home

The work of a real estate agent can make or break how a prospective buyer feels about the property. Now that it's time to sell your home, you want to find the right agent to market it.

How do you find someone you can trust who will make you feel confident they can sell your home quickly for the best price possible? Here are the questions you should be asking.

Are They Licensed?

This one is the easy one. You should be working with a member of the National Association of Realtors®. It is also important that you check whether they have any complaints on record about their practices.

You can check with your state's real estate department as well.

Are They Successful?

A successful real estate agent is more than the number of sales they have completed. You should also find out the average difference between listing and selling prices on their most recent sales.

If an agent is closing deals at far below the original asking price consistently, that might be a red flag.

How Busy Are They?

Make sure you ask in advance how often the agent will contact you and how they will keep you informed of potential buyers. If you're going to be working with one of their associates at times, you should know.

How Familiar Are They With Your Neighborhood?

A real estate agent is not just marketing your home – they're marketing your entire community. If they have closed nearby sales before, they are familiar with the selling points of the neighborhood as well as the right price range for properties similar to yours.

How Much Commission Do They Expect?

Normally you will pay the agent about 6 percent of the sale price. If you find one that offers their services for a low percentage, you should know why. Are they just trying to stay competitive? Or do they expect you to do a large share of the marketing yourself?

Do They Have A Plan?

The real estate agent should be able to tell you exactly which marketing techniques they would use for your home and how they plan to promote the listing. They should come to the table with ideas from the very beginning.

Now that you have a clearer idea of the basics, use the internet to find trusted real estate agents in your area. Then pick up the phone and begin your journey toward becoming a successful home seller today.

Why a Detached Garage Can Drastically Improve Your Resale Price

Before you make a major structural change to your property, it is important to consider how this will affect your resale value. While there are many steps that you can take to improve your property, the addition of a detached garage may be beneficial to you and may drastically improve your resale price when you are ready to sell.

You should always first obtain customized information about how the addition of a detached garage may affect your property's value.

Adding Square Footage to Your Home

As a property owner, you may be well aware that one of the most common ways the value of your property is determined is by the market rate for price per square foot of homes in the area. While factors such as age of the property, condition of the property and amenities in the neighborhood may affect whether your property's price per square foot is above or below market average, the size of the improvements has a direct impact on property value. Adding a detached garage adds square footage to the property, and a real estate agent can help you to determine the true financial gain you may experience through this addition.

Increasing Appeal to Potential Buyers

Properties that are more appealing to potential buyers may sell for a higher price. When you add a detached garage to your property, you may be adding style and function to the property by adding a place to park vehicles and to store items like seasonal items and lawn equipment. You can also create a detached garage with a workshop or another functional area for added appeal.

Transforming Existing Space

Some home additions will add a detached garage to a property because a garage was never constructed on the property, but others will be added because the homeowner wants to transform the existing garage attached to the home into a more functional area. For example, a new home addition, may turn the existing garage into a living room, a bedroom or another functional area. With the addition of a detached garage, the property owner can retain the benefits of having a garage while also improving the functional use of the main area of the home.

The addition of a detached garage can benefit you and your family in a number of ways, and it can also improve the resale value of your home.

Sellers, Beware: Five Reasons You Might Not Get Top Dollar when You Sell Your Home (And How to Avoid Them)

For most people, their home is their largest asset, so they want to maximize that asset by getting top dollar when they sell. Here are a few reasons you might not get top dollar when you sell - and how to avoid them!

Selling At The Wrong Time

From early spring to late summer is home-buying season for most people, especially those with children. Putting your house on the market during this period is when you are likely to get top dollar for it. Early fall is also a good time to list your home. Winter - especially December - is the worst time to list. If you list your home outside of prime selling season, you are likely to get less for it than you could have otherwise.

Not Staging Your Home Properly

Many people think of staging as simply rearranging the furniture or changing curtains, but there is so much more to it, and not doing it properly can mean less money for your home. To stage your home properly, you must declutter, putting knick-knacks and family pictures away. You also want to make sure your home is as clean as possible and that you correct any defects such as holes in the wall or cracked window panes. Another thing you should do as part of your staging routine is to paint your walls in neutral colors and update cabinet hardware and light fixtures that are out of date. These little changes can make a big difference. 

Not Paying Attention To Curb Appeal

You can spend all the time and money necessary to spruce up the inside of your home, but if your lawn is a patch of dirt and your gutters are falling down, all that work and money can go for naught. To get top dollar for your home, you need to improve your curb appeal. This includes seeding or sodding bare spots in your lawn, trimming trees and shrubbery and fixing up home-related items such as broken concrete and sagging gutters.

Not Getting The Price Right

You might think that to get the highest price out of your house, you have to price it high. However, that's not necessarily always the case. If you price your house too high, it can make other similar houses that are priced lower look like better deals. You should make sure to pay close attention to what comparable homes are selling for in the area and price your home accordingly.

Not Working With A Real Estate Agent

Many people think they can save a bundle selling their home by not working with a real estate agent. While you do save on the real estate commission, you can lose more than that amount by making mistakes in pricing and marketing. A real estate agent will have access to resources you don't, such as information on buyers looking in your neighborhood. An agent will market your home, make sure it is priced accordingly and set up showings. It is worth your time and money to call an agent experienced in selling homes in your neighborhood who can give you a market evaluation.

How Much is Your Home Worth in Today's Market? Three Key Tips for Assessing Value

If you're thinking about putting the house on the market, or are simply curious about its value in the current economic atmosphere, it's essential to get an honest assessment of its value. An overly inflated figure won't hold up and will only turn potential buyers away.

It's best to get a fair assessment in order to ask a reasonable price or avoid over-extending oneself when it comes to taking out a home equity loan. Consider these three key tips to get a true assessment of a home's value.

Identify Positive Features About The Home And Property

When seeking an appraisal for a home, it's important to look at the big picture. While the neighborhood and specific location are important, as well as the size and condition of the home, it's also essential to tally up any improvements or upgrades. Any recent renovations are a plus that are sure to give a boost to a home's value. Outbuildings and swimming pools add more positives that will increase the initial value of a home. The most important thing any homeowner can do is to stay on top of repairs and give the property a facelift periodically to keep things fresh. This will be taken into consideration during an appraisal.

Pay Attention To The Competition

Whether homeowners try to estimate their home's value on their own or bring in the professionals, it's important to pay attention to the surrounding real estate. Take a close look at other properties in the area and their price tags when they come up for sale. It's especially helpful to look at properties that compare in size and condition. From that point, the most expensive and least expensive homes should be tallied as well, providing a price range for the concerned individual's home.

Think About Present Circumstances

Be sure to consider if the area is in a recession or showing a period of strong economic growth. If a home is located in an area that is booming, this will inflate the value of the home. It is all part of the law of supply and demand. When buyers are coming in droves, home sales will be ripe for the picking and homeowners can ask a higher price. However, if the population is dwindling and people are migrating elsewhere because job opportunities have fallen, there is a much greater chance that the home's value will decrease. For those who want to sell, the best bet is to strike when the iron is hot and put the house on the market during a period of economic strength. If the economy is failing, it may be necessary to wait or cut ones' losses.

Act Now To Learn More

There is no better time than the present to contact a name you can trust in real estate. Discover all the ins and outs of assessing your home's value, discuss your options, and find out ways to boost your property's potential as you seek a reliable assessment.

Feng Shui 101: How This Ancient Art Can Help Improve Your Home Staging

It is a buyer's market, making home selling a challenge that can range from relatively simple to downright frustrating. Boosting ones' chances of selling their home can be done in a number of ways. One simple way is to utilize the art of Feng Shui - an ancient Chinese art, used to manipulate the flow of energy in your home.

Feng Shui can be as inexpensive or as costly as you would like. Using what is already on hand is one way to keep it free, but sometimes a simple coating of paint on the front door or a few decorative pieces can make a big difference in the room.

The Entry Way

First impressions are everything, so one of the most important rooms in the home is the one that is entered into first by potential buyers. If the entry way is followed by a hallway, making the hallway look as wide as possible is important, as open, spacious rooms have better energy flows. Using a long, runner rug is one way to achieve this look, as well as brighter paint colors on the walls.

The Main Living Area

The living area will be one of the main draws to potential buyers. They should be able to envision themselves spending time there, reading a good book or entertaining guests. Upon entering the room, buyers should not be looking at the backside of furniture. The furniture should be outward facing, in an inviting way. A simple table in the middle of the furniture arrangement keeps the flow going, while also allowing for utility and style. A few simple art pieces on the walls or on shelves are a nice addition, as long as the space does not look cluttered or ill-kept.

The Bedrooms

Electronics have a negative effect on energy flows, so keeping electronics out of the bedroom during the staging process is important. The bed should be in full view of the door, but the headboard should not be against the wall that is directly in front of the door. Allow as much natural light into the room as possible.

The Bathroom

In Feng Shui, drains are seen as energetically negative, so toilet seats and shower curtains or doors should remain closed. Again, natural light is important, as well as uncluttered counters. Mirrors should be easily accessible and have a good source of light, preferably natural.

The Kitchen

Many counters and tables are magnets for junk - keeping these spaces clear and free of clutter is essential to a nice energy flow, as well as successful staging. Fresh flowers add a nice touch to the room, and make it seem more open. Yellow is considered good for digestion, so painting the room a nice shade of yellow, or adding touches of yellow here and there can be beneficial.

Home staging is a vital, but sometimes overlooked aspect of house selling. Feng Shui can be a great way to interest more buyers, and sell a home quicker. Energy flow is the basis of Feng Shui, and both natural lighting and arrangement of furniture make a difference in the energy levels of a home.

Buying or Selling, Here Are Three Traits You'll Want in Your Real Estate Agent

For both buyers and sellers, choosing the right real estate agent is an important and difficult decision, but making the right selection is critical. Consider the following essential characteristics for a real estate agent before signing a contract:

Experience

An agent must understand the real estate market as well as the practices and processes of buying and selling. While a new agent may have energy and desire, experienced agents will be able to offer insights and experiences which are likely to give their clients the edge in their deal. Experience also indicates negotiating skill.

Of course an agent must be licensed, but they must also be knowledgeable about the specific neighborhoods and types of property their clients are interested in buying or selling. Commercial properties are much different than residential properties, for example, so find an agent with the experience you need.

Creativity

Since a variety of problems can happen at any point in a real estate deal, a real estate agent should be able to solve problems creatively. An agent who helps their clients think through problems, offers reasonable alternatives or finds a way to overcome obstacles is invaluable to both buyers and sellers.

Marketing is essential in the real estate world, so an agent who knows how to creatively use technology to entice buyers or to locate homes is a benefit. Buyers usually start their search online, so an appealing, user-friendly and updated website is essential. For sellers, videos are often the best way to display the best features of a home. These are today's real estate tools, so an agent who knows how to use them has a better chance of making an effective deal for their clients.

Honesty

Home sellers need someone who will be realistic with them about the value of their home, no matter what other homes in the neighborhood are selling for or what the sellers think their home is worth. Home buyers need an agent who will tell them, for example, that consistently under-bidding in order to get more home for their money is not a viable strategy. These conversations are difficult, but an honest agent will have them in order to achieve a successful result.

Another aspect of honesty is maintaining consistent communication in whatever form suits their clients. Even if there is nothing new to discuss, a quick update to say that nothing is happening is essential to maintaining trust. Silence is a sign of denial or worse, so an agent who communicates regularly is being honest with their clients.

Finally, an agent should be honest enough to put their client's interest ahead of their own, showing the client every house that fits the criteria and not just those that will get the agent the biggest commission. An effective seller's agent will give their clients the feedback they receive from potential buyers, even if the news is discouraging. Keeping problem areas from a seller may keep the relationship friendly, but it does not put the seller's interest above the agent's.

Giving and Getting: Why the Terms of a Home's Sale Are Far More Important Than the Price Paid

One of the most significant factors home buyers and sellers focus on when buying real estate is the negotiated sales price in the purchase contract. While the sales price is undeniably important, the reality is that other terms in the sales contract may have more far-reaching and significant effects on the transaction.

In fact, with a closer look at some of the most important terms, you will see why you and your agent should actively negotiate for improved terms rather than a lower sales price.

Closing Costs

Some buyers and sellers will haggle over a few thousand dollars in the sales price without paying attention to the closing costs, but the fact is that the closing costs for a typical transaction may cost the buyer between two to five percent of the sales price on average.

A sales contract may be negotiated so that the seller assumes some or most of the closing costs, and this can result in considerable savings the buyer. Likewise, when a contract is negotiated in the interest of the seller, the seller may save thousands of dollars at closing if the contract states that the buyer is responsible for these costs.

The Appraised Value

In an ideal world, a home would appraise for the contracted sales price, but this is not always the case. A sales contract may be written with terms that allow for the sales price to be renegotiated after the appraised value is confirmed, and this may benefit both parties. Some sales contracts, however, state that the negotiated sales price is final regardless of the appraised value.

The Property Inspection

Many home buyers opt to obtain a property inspection to determine if there are hidden issues with the property structure, foundation, roof, air quality and other components. Some inspections reveal that a home is in fairly good condition, but others may reveal that a property needs thousands or even tens of thousands of dollars' worth of repairs.

Some sales contracts may be written so that the buyer may back out of a contract within a certain period of time after receiving the property inspection report or so that the terms of the sales contract may be renegotiated once the property inspection report has been completed.

Special Contingencies

A real estate transaction may extend for several weeks or even months while the buyer contracts with a lender, an appraiser, a property inspector and other third parties. During this period of time, many events can occur that may adjust the interest level or even the ability of the buyer and seller to fulfill the contract.

Some sales contracts are written so that the buyer may opt out of the contract within a certain period of time with minimal expense and regardless of other factors related to the appraisal and inspection.

Generally, there are standard terms found in many real estate sales contracts, but these terms can be adjusted by either party to benefit buyers or sellers. Those who are preparing to buy or sell property should actively communicate their needs and desires with their real estate agent so that the contract may be negotiated with terms most favorable to their needs.