Consumer confidence and consumer spending both help start a stalled economy. It will be interesting to see how retail sales report after the holiday season, given the current economic conditions. Initial unemployment claims have been down a tad the past 4 weeks, offering some economists hope, but a chunk of those may simply be accepting seasonal retail work in order to make ends meet, get employee discounts, or simply hoping to land full time work.
When it comes to Black Friday, there are a number of things to take into account. First, is safety. The allure of a perceived bargain can make otherwise rational people acct irrationally. Make a list of what you actually want or need rather than buying what you perceive as a bargain.
Perform due diligence. The 50-inch television you have your eye on may be advertised in one circular for an amazingly low price, but check the details. Some manufactures make products that have the similar features specifically for stores and sales but without a number of the features.
For example, a TV at the Black Friday price may only have one HDMI input rather than multiple ones. It may only have a 60mh processor rather than 240 . Check the actual model number of the product that you want and shop based on that to avoid disappointment.
Check the retailer’s return policy. If you buy on Black Friday and after Christmas, the gift was not what was expected, you would be stuck with store credit if they have a 30 day return policy. Look into restocking fees as well. A 10-20% charge to return an item would negate any benefits.
If you plan to buy a home, refinancing, or making another purchase soon, be aware of your credit card limits and balances. Staying below 50% of the limit is good. Below 30% is even better. If $1500 will take you over one of these thresholds, think about the ramifications. Finally, do not forget about Cyber Monday and Shop Small. Great savings online for the former(just shop at trusted sources), and helping small businesses with the latter.
Well, the rules for the new programs for homeowners that owe more than the house is worth-HARP2, were announced. For those having loans with Freddie, applications must be made after November 30, 2011. To see the official bulletins: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1122.pdf and https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/sel1112.pdf.
It will take a few days or weeks for lenders to publish their guidelines, but there is more optimism about the new HARP than pessimism. Remember, even though Fannie and Freddie announced the rules, neither lends money to borrowers. The actual lenders then add their overlays to the basic rules. Ironically, this means that going to the lender that holds your loan now, may not be the best choice as their overlays may be more onerous than another’s.
If you are unsure of what type of loan you currently have, contact our office. We have links directly to all government agencies and can look up free of charge. We are also finding that our guidelines are more favorable than most others. In cases where we may not, we will advise you to stay put or to proceed with another lender.
Finally, when listing your home, be mindful of the market. According to one study, 75% of homeowners value their home higher than the actual market and a majority prices their home too high. Sitting on the market because of price, perception or another reason will usually end up costing you more in missed opportunities and a drastic reduction later.
Final thoughts: guard your information this season; stick with a budget; increase your financial literacy, and build your savings. With oil breaking $100 again that could increase the costs of many goods you purchase, adding more strain to the budget. Bargains abound, but cash is still king!
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