When you’re out for a run, wearing an outfit without pockets, or just feel like “traveling light”, the last thing you want to do is take your house keys with you.

Thanks to advances in home security technology, now you don’t have to.

It may sound like science fiction, but there are several security companies selling door locks that recognizes fingerprint as a “key”. Powered by simple batteries, biometric locks run can be programmed to remember up to 30 different fingerprint types.

And, for as little as $250 each, fingerprint entry door systems can be a worthwhile investment for the safety-conscious homeowner.

Fingerprint door locks are likely to score high among homeowners who like to impress guests with technology, but there are practical reasons for having a keyless lock, too, including children, forgetfulness, and the freedom to not carry keys everywhere you go.

If it's something you've long wanted, you don't have to wait any longer.

As mortgage guidelines loosened between 2002 and 2006, homeowners often used their home equity to retire credit card and other consumer debt. They did this by increasing the size of the mortgage and taking “cash out” from their home.

As you’d expect, this type of mortgage transaction is called a “cash out” refinance.

Well, now that mortgage guidelines are tightening, it’s growing more difficult for a homeowner to engage in this type of home loan.

Mortgage lenders are restricting the total amount of equity that can be withdrawn from a home, usually as a percentage of the home’s value.

This may be one reason why the amount of credit card debt is rapidly increasing among Americans.

Throughout May and June, for example, credit card balances increased 12% and 8% respectively even as consumer spending remained relatively flat.

Therefore, we can hypothesize that Americans — unable to “cash out” from their homes — are putting more money on their credit cards and slowly reaching their collective credit limits (upon which the borrowing stops).

When the borrowing stops, spending stops, too, and this has the impact of slowing down the economy.

A slower economy, of course, reduces inflationary pressures and that makes the U.S. dollar stronger to international investors. That strength, in turn, creates buying pressure on mortgage bonds which pushes mortgage rates down for everyone. Naturally, lower rates encourage more borrowing.

Yes, it’s a cycle. And it’s one worth watching.

When the National Association of Realtors® releases its monthly Existing Home Sales report, people tend to watch every word, fact and figure in the statement in hopes of decoding the real estate market.

It’s all wasted energy.

It’s impossible to use the NAR report in everyday living because the NAR report is a national story. Real estate, on the other hand, is not a national market.

All real estate is local.

Think of your own town. There’s at least one each of the following:

• An improving neighborhood
• A declining district
• An abandoned area
• An out-right scary street

In a national report, these regions are lumped together into one measurement.

So, when we see that the median home sale price fell over the last year, or that national inventory rose to a 9.6 month supply, it doesn’t really mean much to your street in your town.

The NAR report lumps every street in every town together into one big blob of data.

Your area may be seeing explosive growth tied to school districts, or affordability, or proximity to transportation, or just plain “good value” — regardless of what national real estate statistics report.

So, as always, be wary of “national” real estate stories — the true story is a local one.

This chart shows how home buyers with jumbo loans — loans over $417,000 — are being impacted by the recent mortgage market uncertainty.

Similar to sub-prime borrowers, rates have jumped higher for jumbo borrowers in the past four weeks.

For some jumbo clients, the expected payment on a $500,000 mortgage increased $508. Rates have climbed 1.500% higher since Agust 1 in some cases.

Note: The chart above does not reflect actual mortgage rates. It is provided by Bankrate.com and it meant to show how jumbo loans are moving in a different direction from conforming, 30-year fixed rate home loans.

For some homeowners, splitting a jumbo loan into two parts may make financial sense — one loan for a conforming-size $417,000 and another “piggyback” loan to make up the difference.

The kitchen table serves as a home’s “center” for many families. It’s often the place where the kids do their homework, the parents do their taxes, and a few weekend projects get finished.

It can sometimes seem like the kitchen table is used for everything but meals.

But studies show that busy families can strengthen their relationships if they site down together for a traditional dinner each day.

Getting everyone in the same room at the same can be a challenge by itself. But, if that room is traditionally used as a activity center in the home, it can be even harder to get everyone gathered and sitting still.

A quick trick can reclaim the kitchen table for half-hour: try having a nice table cloth and proper placemats that signal to your family that “it’s time to be together”. Nothing formal is required — just a table cloth bright, bold and different enough to change the kitchen table’s “mood”.

A small amount of formality can slow everyone down and create the perfect atmosphere for having quality family time.

With tomorrow morning’s New Home Sales report, markets will get a look at the number of newly-constructed homes sold in July.

The figure is expected to be in the 825,000 range. This is lower than June’s 834,000 figure.

But — as always — there is more to the story.

When the Census Bureau reports on New Homes Sales, it only counts the number of new sales contracts written. Specifically, New Home Sales doesn’t measure what happens to contracts after they are signed.

So, for each buyer that rescinds his contract or does not qualify for financing, the New Home Sales data is over-stated by 1.

A “new home sale” may cancel before closing for a multitude of reasons, including:

• Buyers can’t sell their old homes and can’t get financing
• Buyers are angry when developers reduce price on similar properties
• Mortgage products are no longer available for the buyer’s borrowing profile

According to RealEstateJournal.com, cancellation rates were as high as 40% for big builders in November 2006. We can only theorize that the number has since increased as home sales slow overall and the mortgage product menu shrinks.

In other words, tomorrow’s New Homes Sales data is somewhat irrelevant to the overall U.S. housing market. It only measures contracts being written, not contracts being closed.

The Census Bureau even acknowledges this on their Web site.

Suddenly, Private Mortgage Insurance is back in vogue. If only by default.

The story background is well-documented in this Bankrate.com article from 2002. The article is five years old, but it still raises some salient points.

What the article doesn’t highlight is that second mortgages such as home equity loans are typically sold to Wall Street, bundled in with sub-prime and “near-prime” loans.

Today, as the number of buyers for these higher-risk loan pools shrinks, some mortgage lenders have stopped offering second mortgages in order to reduce their overall lending risk.

PMI payments tend to be higher than their piggyback counterparts, but The Tax Relief and Health Care Act of 2006 narrows that gap using tax deductibility. The act grants itemized deductions for some private mortgage insurance (PMI) and government mortgage insurance (MIP) expense premiums paid in 2007.

For all loans originated in the 2007 calendar year, mortgage insurance is tax-deductible provided that two tests are met:

1. The homeowner’s household income is $100,000 or less in 2007
2. The home loan is for a primary or secondary residence

For households earning more than $100,000, the deduction is phased out to the tune of 10% per $1,000 of additional income until it reaches 0% at $110,000

So, if a single person earns $90,000 in 2007 and buys a home using MI, the MI expenses are tax-deductible in 2007. However, there’s a catch! Because the tax code is due to expire December 31, 2007, there is no guarantee that the MI will be tax-deductible in 2008.

As always, talk with your tax professional about how tax deductions work and whether you qualify for a PMI deduction.

As the number of mortgage products continues to shrink, PMI will continue to grow in popularity. The graphic/poll above will shift, too.

Friday, the Federal Reserve lowered its Discount Rate by 0.50% in an effort to preserve liquidity among our nation’s banks.

This has nothing to do with mortgage rates that people like you and I get for our homes. Well, not directly at least.

The Discount Rate is the rate at which banks borrow money from the Federal Reserve. It is different from the Fed Funds Rate which is the rate at which banks borrow from each other.

After the adjustment last week, the Discount Rate now stands at 5.750%; the Fed Funds Rate is 5.250%. Note that the Fed “charges” more than other banks because it wants to be the “lender of last resort”.

And last week, it was.

When the Fed lowered the Discount Rate Friday, it signaled that it was concerned for the nation’s banks and their liquidity. A reduced Discount Rate strengthens the system by lowering bank operating expenses and increasing capitalization.

The Fed also extended its normal payback period from one day to 30 days. The additional 29 days buys extra time for banks to rebalance their books through asset sales or debt issuance.

On Friday, mortgage rates fell in response to the Discount Rate announcement, but not because the two are related.

Inflation devalues mortgage bonds and the Fed’s move signals that inflation pressures may be subsiding. When the inflation is falling, mortgage bonds improve in price and these higher prices yield lower rates.

This is why mortgage rates dipped. Not because the Fed lowered the Discount Rate, but because what the lowering signaled about the economy.

As Hurricane Dean charts a path through the Gulf of Mexico, let’s not forget that Mexico and Venezuela are the #3 and #4 importers of crude oil to United States, respectively.

Because of the storm, many Mexican oil fields and facilities will be forced to operate at reduced capacity. In addition, rough waters will likely delay crude oil shipments by tanker; vessels will not be able to navigate the Caribbean Sea and the Gulf.

With 20 percent of our nation’s imported oil threatened by Hurricane Dean, expect gasoline prices to increase in anticipation of shorter supply. If the storm causes extensive damage, expect that prices will increase again, after the fact.

If you drive your car a lot, it may be best to fill it up early Monday morning to get the lowest prices of the week.

Original art brightens a home and bring a personal touch to your space.

One common method of buying art is to find an empty wall space — especially near a doorway or in a main room — and purchase artwork to fill that space.

If the wall space is large, look for a painting, print or piece of “pop art“; with floor space, a sculpture may be a better choice.

In smaller areas, a series of small pieces stacked or staggered can really accentuate a room, too.

Of course, you can always hunt for artwork with no particular location in mind and then find a place to place it later.

Shopping for art can be fun in its own right. Versus large galleries, local art fairs and small galleries usually feature pieces from a host of different artists with many different styles.

If you have a chance to meet the artist personally, ask about his/her works of art and any “stories” that may describe or define it. You’ll not only hear some interesting tales, you’ll also get a good story to retell to house guests.

Take your time when buying art for your home — purchase something that you really like. Art should not be about impressing guests; it should be about a very personal object that speaks to you without saying a word. Or, maybe, it will do both.

Control4 is a wireless system for homes that digitally connects all of your in-home electronics. With the press of a button, you can control climate, lighting, music, televisions, and security within your home’s walls.

Advances in wireless technology have simplified networking a home since 1995 when Bill Gates’ “digital” home was completed. Wikipedia cites that the Microsoft chairman’s home required 104 electricians and more than 39 miles of optical fiber.

Along with the drop in manpower, the price of a digitally-wired home has dropped dramatically, too. Basic systems start at about $2,000. The most comprehensive systems easily top $10,000 per installation.

Operated by remote-control, Web interface, or wireless touch-screen display, home automation systems give homeowners complete control over every electronic aspect of their home. And, because prices continue to fall, this standard feature of many new luxury homes is now affordable to middle-class homeowners, too.

Mortgage industry trade magazine Inside B&C Lending pegs the 2006 dollar volume of new sub-prime loans at $640 billion. According to the Real Estate Charts chart above, 78% of those dollars were in 2-year adjustable loans.

A loan of this variety is often called a 2/28 (“two twenty-eight”).

A 2/28 originated in 2006 will reach its first adjustment period sometime in 2008. Adjustments on sub-prime loans are typically 3% at the first adjustment, and 1.5% every six months thereafter until the “cap” of 7% above the original rate is reached.

Looking back to 2003-2006, a homeowner facing an upward adjustment in his mortgage rate could usually just replace the existing home loan with a new one, thereby avoiding the upward adjustment altogether. This is commonly called “refinancing” your home.

At present, though, this is a much more difficult proposition; there are considerably fewer mortgage products available for sub-prime borrowers to use.

With fewer available products into which to change, the homeowner with an adjusting mortgage may have no choice but to swallow the higher rate after the two-year fixed rate period ends.

If your home loan is among the 78% of 2/28s originated in 2006 — even if you have a pre-payment penalty — it may be time to call your loan officer just to check out your options.

Paying a little bit extra today on a new loan may be better than paying a lot on an adjusted mortgage tomorrow.

Windows are the most elegant part of a well-crafted home. Whether they are oak-trimmed craftsman-style lights from a century ago or more modern expanses of glass and light, windows can be the eyes and soul of a home.

As a view to the outside, windows also provide a view to the inside. For privacy and “burning afternoon sun” concerns, a simple solution is often best.

Head to a good craft store and purchase fabric (i.e. lace, shear) about 50 percent wider than the area to cover. Sew a loop in the top and hem the edges, if necessary.

Next, using a compression rod from a hardware store or home design center, hang the fabric as a curtain.

A curtain with just a little bit of gather at the top eliminates the worst of the sun, offers privacy, and doesn’t upstage an elegant window. If handywork is not your thing, ask a friend who knows his/her way around a sewing machine.

Great windows are meant to stand out and sometimes that requires giving them a proper dressing.

The past several weeks have been rough on the mortgage market. By extension, of course, the issues are hitting real estate markets, too.

As a quick recap from the first 13 days of August:

• The nation’s 10th largest mortgage lender declared bankruptcy
• High profile funds declared their assets worthless, or halted withdrawals of cash
• Many mortgage products were discontinued by their lenders

Then, for the first time since September 2001, the Federal Reserve made $64 billion in low-interest loans available to banks.

What is going on?

The short answer is that while most of America spent much of the last 18 months spooked by the real estate crunch, mortgage investors ignored it.

For example, after New Century bankrupted in April, many big investment banks and hedge funds thought that other mortgage investments looked “cheap” and so they added to their bets in the sector.

Home loan defaults proved to be an undoing, though. In exceeding its expected rate, foreclosure activity swamped the value of the mortgage market investments. Now, many investors are gun-shy about getting any deeper into investments related to real estate lending.

So, what does this mean to you?

If you are looking for a home loan, it will be tremendously more difficult than it was in 2006, and it may get even more difficult over the next few months.

If your plans for 2007 or 2008 include buying property, now would be a terrific time to start a relationship with a mortgage broker to begin your planning. Even if your credit is perfect, it not a bad idea to just get some sound advice about your financing options, and what may possibly change.

Lately, the mortgage environment has changed daily.

Any security — stock, bond, or otherwise — has a specific risk associated with it. Based on that risk, an investor decides whether or not the price is worth paying. If the security is a “good value”, an investor will buy it. If not, the investor will pass.

Until recently, mortgage bonds were considered a good value because the risk of the investment was relatively low compared to the reward (i.e. interest rate).

If you’re wondering why markets are in disarray right now, it’s because the risk tagged to the mortgage bonds was dramatically underestimated.

Hindsight, as they say, is 20/20.

When homeowners began defaulting on home loans at a quicker pace than was expected, the risk attached to each mortgage bond increased. Higher risk should mean higher return, but investor doesn’t have the right to change a homeowner’s mortgage rate.

As a result, the “reward” on mortgage bonds moved below the risk on which they were originally priced. The bonds, therefore, are a losing bet and the investors either (a) tries to sell the bond at a lower price, or (b) holds the less valuable bond and hopes for a rebound.

The bigger problem in the markets is that — at least so far — the financial models used to determine mortgage “risk” were proven wrong. Until new models are tested and “approved”, markets will continue to literally guess what a mortgage bond should be worth.

This is the major reason why markets have gyrated wildly in August. Investors have no idea what the true value of their mortgage bond investments is/will be.