Jeff Underwood Personal Finance Expert and Mortgage Professional

CNNMoney recently released its Best Places To Live 2011 list.

The annual survey is based on data from Onboard Informatics. Using Quality of Life factors such as education, crime and “town spirit”, and focusing on towns with between 8,500 and 50,000 residents, the CNNMoney survey ranks the country’s best “small towns”.

To be eligible, towns must be have a median household income greater than 85 percent, and less than 200 percent of the state median income; must not be a categorized as a “retirement community”; and must be racially-diverse.

From a list of 3,570 eligible towns nationwide, Louisville, Colorado was ranked #1.

The complete Top 10 Best Places to Live as cited by CNNMoney, and their respective average home listing prices :

1. Louisville, Colorado ($383,569)
2. Milton, Massachusetts ($577,008)
3. Solon, Ohio ($291,162)
4. Leesburg, Virginia ($486,018)
5. Papillion, Nebraska ($218,520)
6. Hanover, New Hampshire ($643,500)
7. Liberty, Missouri ($177,678)
8. Middleton, Wisconsin ($347,770)
9. Mukilteo, Washington ($345,487)
10. Chanhassen, Minnesota ($418,607)

Rankings like these can be helpful to home buyers nationwide, but it’s important to remember that the Best Place To Live survey is subjective. You may find none of the above towns to be to your liking.

You may also find the lowest-ranked city to be your favorite.

In other words, before making a decision to buy, connect with a real estate agent who has local market knowledge. That’s the best, most reliable way to make sure you get the housing data that matters to you.

Also, join me at Facebook.com/TheUglyTruthAboutMoney.

Jeff Underwood, The Street Economist
The Ugly Truth About Money

The Ugly Truth About Money

Last week, at its 5th scheduled meeting of the year, the Federal Open Market Committee voted to leave the Fed Funds Rate in its target range near zero percent.

The Fed Funds Rate has been near zero percent since December 2008 and, in its official statement, the FOMC pledged to leave the Fed Funds Rate untouched for at least another 2 years.

This doesn’t mean mortgage rates will be untouched for 2 years, though.

Mortgage rates and the Fed Funds Rate are two different interest rates; completely disconnected. If mortgage rates and the Fed Funds Rate moved in tandem, the chart at right would be a straight line.

Instead, it’s jagged.

To make the point more strongly, let’s use real-life examples from the past decade.

• June 2004, 529 basis points separated the Fed Funds Rate and the 30-year fixed mortgage rate
• June 2006, 168 basis points separated the Fed Funds Rate and the 30-year fixed mortgage rate

Today, the separation between the two benchmark rates is 407 basis points.

1 basis point is equal to 0.01%.

Between now and mid-2013, when the Fed may begin changing the Fed Funds Rate, the spread between rates will change based on economic expectation — not Fed action (or non-action). If the economy is expected to improve, mortgage rates in Chandler will rise and the spread will widen.

Should mortgage rates cross 6 percent before the Fed starts raising rates, it will create the widest interest rate spread in history, surpassing the 615 basis point difference set in August 1982.

At the time, the Fed Funds Rate was 10.12% and mortgage rates averaged 16.27%.

On the other hand, if the economy shows signs of a slowdown for late-2011 and beyond, mortgage rates are expected to drop.

Shopping for a mortgage can be tough — especially in a volatile environment like the current one. Mortgage rates move independent of the Fed Funds Rate. Make sure you’re watching the proper market indicators. It’s your best chance to lock the lowest rate possible.

Also, join me at Facebook.com/TheUglyTruthAboutMoney.

Jeff Underwood, The Street Economist
The Ugly Truth About Money

The Ugly Truth About Money

The Federal Reserve released its June 2011 Federal Open Market Committee meeting minutes Tuesday. It contained no surprises and, as such, mortgage rates in Arizona have idled in the hours since.

The Fed Minutes is published 8 times annually, three weeks after each scheduled Federal Open Market Committee meeting. It’s the official log of the meeting’s conversations and debates.

The Fed Minutes is the lengthier companion piece to the FOMC’s more well-known, post-meeting press release. As compared to the brief-and-focused press release,by comparison, the Fed Minutes are long and detailed.

June’s press release was 458 words long. Its minutes totaled 6,889 words.

The June minutes reveal some interesting perspectives from within the Federal Reserve, too.

• On growth : Economic recovery had been slower than the committee expected
• On housing : The market remains depressed. Foreclosures are “holding back” construction.
• On rates : The Fed Funds Rate should remain low for an “extended” period

In addition, the Federal Reserve discussed whether a new round of economic stimulus was necessary. Committee members agreed that a poor outlook for employment in the medium-term would make this move more likely.

There was little that surprised Wall Street in the June Fed Minutes. This is why market reaction has been muted since its release.

The FOMC meets next August 9. If jobs data continues to weaken between now and then, expect the stimulus chatter to continue. It’s unclear, however, how this would impact mortgage rates.

For now, mortgage rates remain near their all-time lows, and they have much more room to rise than to fall. If you’re shopping for a loan, therefore, the timing is right for a lock.

Also, join me at Facebook.com/TheUglyTruthAboutMoney.

Jeff Underwood, The Street Economist
The Ugly Truth About Money

The Ugly Truth About Money

It’s a fact: It’s more expensive to live in some cities than others. Beyond just the costs of buying a home, different cities also carry a different Cost of Living. For households relocating from Arizona and  across state lines, the change in “life costs” can be jarring.

Depending on where you live, everyday expenses — from groceries to gasoline — make a different-sized dent in a household budget. And now you can see in numbers by how much your expenses might change.

Visit Bankrate.com’s Cost of Living Comparison Calculator.

The Cost of Living Comparison calculator is as basic as it is thorough. The calculator asks just 3 questions —  (1) Where do you live now, (2) To what city are you moving, and (3) What is your salary — and uses your answers to produce a detailed, 60-item cost comparison between the two towns.

The city-to-city cost comparisons include:

• Dry Cleaning Costs
• Total Energy Costs
• Beauty Salon Costs
• Movie Costs
• Dentist Visit Costs

The list also features a mortgage rate comparison, and a comparison of local home prices.

The Cost of Living calculator is based on data from the ACCRA. On the ACCRA website, a similar report sells for $5. At Bankrate.com, the information is free.

Also, join me at Facebook.com/TheUglyTruthAboutMoney.

Jeff Underwood, The Street Economist
The Ugly Truth About Money

The Ugly Truth About Money

Tax Day In America – how about some interesting facts

Would you believe that there once was a tax rate that was set over 90% ?? And, it was even in the United States!!! I will share with you the years in America that had some of the highest marginal tax rates. Join me on this tax day in America as I talk about some interesting facts about our tax system. Did you know that one of our leaders saved over $50Million in taxes just by taking his position with the Administration?? In this episode you will find out who………….. CLICK HERE to check out the Radio Show http://www.blogtalkradio.com/jeffunderwood/2011/04/18/tax-day-in-america-with-jeff-underwood-the-street-economist

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Facebook.com/TheUglyTruthAboutMoney

Jeff Underwood, The Street Economist

The Ugly Truth About Money

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Move Your Money Month Facebook Event this May

You owe it to yourself to look at this movement!  You can do this!  Move Your Money Month is May 2011.  It is time to start moving your money to smaller community banks and credit unions.  Support local business and jobs.  Join me at the “Move Your Money Month” event on Facebook.  CLICK HERE.         And SHARE this with others.

Move Your Money

Move Your Money Month is May 2011. CLICK HERE for more information on this topic.

It is time to start moving your money to smaller community banks and credit unions. Support local business and jobs. Join me at the “Move Your Money Month” event on Facebook. It is to take place May 2011. How many people can we get to get involved?

Read and follow the The Ugly Truth About Money blog, listen to The Ugly Money Show, and take back control of your financial life!

Here is a Move Your Money checklist provided by MoveYourMoneyProject.org. Or, http://moveyourmoneyproject.org/checklist .

Thanks.

Jeff Underwood, The Street Economist

Also, join me on Facebook.com/TheUglyTruthAboutMoney.

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Move Your Money

Senate Majority Leader Harry Reid demonstrates just how serious he is about cutting some federal spending!! He is more concerned with Cowboy Poetry than he is about the future of America and the debt that will be left for our kids and their kids. This is ridiculous!!!

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Jeff Underwood, The Street Economist
The Ugly Truth About Money

Video from Townhall.com

Accounting practices by our States may be worse than how Enron handled their books.

The Huffington Post: During a second appearance onstage at the annual TED conference, Bill Gates spoke out against worsening state budget deficits caused by accounting “tricks” he said would make Enron’s former executives blush. The Microsoft co-founder and philanthropist said state budgets have received a puzzling lack of scrutiny and have been “riddled with gimmicks” aimed at deferring or disguising the true costs of public employees’ health care and pension obligations, citing California’s ongoing budget crisis as an example of creative deficit spending and the subsequent cuts to education spending as an unacceptable cost. Click Here to read the rest of the article Bill Gates goes on to say that even Enron would never had done this!

Here is also a quick video from the documentary “Enron, The Smartest Guys In The Room”.

Join me on The Ugly Money Show on BlogTalkRadio.com/JeffUnderwood or on iTunes – The Ugly Money Show

Thanks for listening and following.

Jeff Underwood, The Street Economist

The Ugly Truth About Money

http://www.facebook.com/TheUglyTruthAboutMoney

This is classic!!

Click Here to hear Charles Ferguson’s acceptance speech where he points the finger at Wall Street. It is classic!!

Also watch the trailor from “Inside Job”. If you have not seen this documentary, you are missing out.

http://theuglytruthaboutmoney.com/
http://www.facebook.com/TheUglyTruthAboutMoney

Stay Informed throughout 2011!
Join me for an exciting year of fun education on money, debt, real estate, credit, mortgage, the economy, and how they all work together!

Also find Jeff on internet radio and iTunes….. http://www.blogtalkradio.com/jeffunderwood – The Ugly Money Show
iTunes – The Ugly Money Show

Jeff Underwood, The Street Economist
The Ugly Truth About Money