Pending Home Sales Fall in December

The pending home sales index, based on contracts signed but not closed in December, was down 24.2% from the prior year's period, according to a report from the National Association of Realtors (NAR). The index, which is considered a leading indicator of existing home sales, had also declined in November, after gains in September and October.

Ian Shepherdson, chief U.S. economist with High Frequency Economics, said it's not likely that the index has hit bottom. He says "Consumer confidence has weakened further, the rate of fall of home prices has accelerated and the labor market has deteriorated, so we are of the view that the outlook for housing continues to darken."

The aggregate existing-home price is expected to drop 1.2% this year, according to NAR.  NAR sees new-home sales likely declining 17.7% this year, and then rising 7.6% in 2009.

By region, December's pending home sales index fell 1.7% in the Northeast, 3.0% in the South and 3.1% in the West. In the Midwest, the monthly index rose 3.4%. Compared with a year ago, the index is down across the country.

What's Your Credit Score and How Do You Raise It?

Before you even think about buying a home, you should ask yourself two questions: "What's my credit score?" and "How do I raise it?"

Knowing your credit score will help you negotiate a good interest rate on your mortgage, and if you can raise your score, you'll get a loan with a lower interest rate.

This video (runs 2:31) explains…
 

If you have any questions about your credit score, leave us a comment using the "comment" link below.  We'd love to hear from you.

Time to Think About Tax Help

We're smack in the middle of tax season again.  Many people fill out the short form, mail it in, and are done with it.  Good for you.  Lots of us have more complicated financial lives.  In many cases, those complications will be handled by a hired tax professional.  But some people really like to do their own taxes.  For you, there's plenty of help online.

When you're ready to file your federal taxes, you can do it online.  The IRS wants more taxpayers to file electronically, so it has teamed up with tax preparation software companies such as TaxCut, TaxAct, and TurboTax.

Together, they offer free e-filing services.  You must meet certain requirements to qualify for free filing.

First, your adjusted gross income must be $54,000 or less.  There are also age and residency requirements, and other criteria may apply.

Start at www.IRS.gov.  Type this address in your browser.  It is the only way to ensure you'll go to the IRS's official site.

Once there, you'll get help choosing software that suits your needs.  Then, you'll be directed to the software company's site.

The software walks you through doing your taxes.  Forget about finding the correct forms.  All you need are your financial papers.  The software performs the calculations for you.  So you're less likely to make math mistakes.

Don't qualify for free filing?  You can still find tax filing software at the IRS's site.  You just have to pay for it, along with e-filing fees.

Don't forget your state taxes!  You may be able to file those with your federal taxes.  Some companies offer free state filing.  But, in many cases, you'll be charged to file your state return.

Make sure your computer's security software is current before preparing your taxes and scan your computer for spyware and other threats.

Remember, criminals love tax season.  Watch for phony e-mail messages purporting to come from the IRS.  Just delete the messages.  Don't click links or call numbers in e-mail.  The IRS will never contact you via e-mail.

Finally, if your taxes are complicated, consult an expert.  Paying for professional help is better than facing an audit!

Paying Down Mortgage vs Investing Your Money

You've got a little extra cash coming in…do you invest it, or would it be smarter to pay extra on your mortgage? 

Let's find out: simple answers to complex questions are in this video (runs 1:28)

Tell us what you think.  Are you better off paying down the mortgage, or investing those same dollars?  Use the comment link below to give us your feedback.

A Quick Home Inspection Checklist

With home prices dropping in many areas, home inspectors are finding more and more homes which are less maintained today than they were in the past.  Home buyers are cautioned to keep this in mind when searching for a home, and use this quick home inspection list as a reference when looking at property:

EXTERIOR
Check the operation of the windows and screens?
Has water been stopped from accumulating near the building?
Check doors, decks, siding, windows & fences for damage / deterioration?
Are there any signs of water infiltration from the roof, siding or windows?
Are there any signs of gutter or downspout problems?
Are the downspouts discharging water away from the foundation?
Has the soil around the home been pitched away from the foundation?

INTERIOR
Have all the areas listed in the home inspection report as inaccessible or not traversed been accessed & professionally inspected to determine if defects exist?
Do the garage doors and their openers function?
Was the reversing devices for the garage door openers tested?
Did you find out why any stains or cracks on any of the walls or ceilings that have become larger or have appeared since the time of the home inspection?    
Have all cracked windows or mirrors been repaired?
Have all the clouded double pane windows been replaced?
Are all the permanently installed fixtures or appliances been in place and in good condition?
Are there any signs of birds, rodents or animals?
Has any damage to damage to the walls, floor or ceilings been repaired?

PLUMBING
Do the plumbing fixture faucets leak or drip?
Are the plumbing fixtures chipped or damaged?
Was water for a time through all plumbing fixtures and check for leakage?    
Was water for a time through all plumbing fixtures and check for stoppage?

ELECTRICAL
Are all the light fixtures are all in place?
Do the light fixtures, switches and receptacles all function?
Does the door bell work?

HEATING AND COOLING
Do the thermostat, heating and cooling systems function?
Is there adequate air flow through the heating and cooling registers?
Did all the radiators or convectors get warm in a reasonable amount of time?

KITCHEN
Do all the appliances function properly?
Are the counter tops or cabinets damaged?
Do the cabinets and drawers operate?

In the end, remember, never buy a home without having a professional home inspector review things under the microscope.