The increase in the rate is a reflection of the year-to-year increase in the average (mean) selling price of a single family home (October to October). If you were to apply for a new mortgage loan now and wanted to lock into the maximum conforming loan limit, you would be locked at $417,000. If, in the next few weeks, the limit is raised, most lenders will allow you to raise the lock up to the new limit if you wish, as long as it falls within the guidelines of the loan program.
Now that we know your age, your ability to stick to a promise to yourself, your college football team, and your knowledge and/or interest in the way the majority of mortgage loans made in this country adjust their loan limits, it is time to look into the mirror and gaze into the future – that is January 2007. January is a cold hard month, even in the warm states, because it is when our monetary indiscretions come home to roost. Actually, they are brought to us by the mailman, or woman, who should know better, but appear to put job above the well being of their fellow man, or woman. Here it comes: they bring us the BILLS.
I bring this up because it doesn't have to be that way. You could do the holiday season with cash. The only problem with that statement is that it is currently too late to plan that unless you root for one of the aforementioned three teams and put a heavy bet on them to win the national championship. And that doesn't happen until early next year anyway. So back to the problem. You could sell something like your house, car, furniture or anything that might go quickly on EBay. I can't expand on this thought because I have never sold anything on Ebay, but I apparently know at least 1000 people who now specialize in this and have contacted me to use their services.
Most people just reach for their plastic and tell themselves it will be paid off in January and that's that. That is great, if it happens, but from my vantage point it rarely happens. Maybe one in 1/2 million people on a good year. Why do you think you see so many credit card ads: "What's in your wallet?"
If you have a house this shouldn't happen. Although I am not a big fan of home equity lines of credit (Helocs), they sure beat the heck out of credit cards. For one thing, they give you tax deductible interest, at least up to $100,000, and the rates are as much as three quarters less than credit cards. They cost little or nothing to set up and you can pay them back and the interest stops! I want to make one point very clear. I am not suggesting you borrow to pay for the holiday season. I am only suggesting that if you are going to borrow, you do it through your home and quit ruining every new year with the additional financial burden you place upon yourself with the use of credit cards.
Just remember they are the most expensive installment debt in the world.
I hope your holiday season turns out to be a great one. I hope all your wishes come true. I hope that your new year is really a "new" year and that all your problems will soon be behind you. And I hope that someone can read between the lines and apply to be our new head college football coach so I can actually use my season seats instead of giving them away all year long. Oh, and Santa, could we also beat the cross-town rival at least one time this century?