Key Economic Indicators that Affect Mortgage Interest Rates: The Employment Situation

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Business people having a discussion.

We continue our look at how economic indicators affect mortgage interest rates, with a dive into The Employment Situation Report—commonly referred to as the jobs report. It is released on the first Friday of every month and, of the indicators we’re discussing in our series, has the most impact on mortgage interest rates. This is because the data has broad implications for the overall health of companies and consumers, and identifies the direction of wage and employment trends. The economy reacts strongly to this report, with interest rates rising on stronger jobs reports and falling on weaker ones.

The Employment Situation Report is comprised of:

 Unemployment Rate

The Unemployment Rate is the total labor force that is unemployed, but actively seeking employment. The Bureau of Labor Statistics identifies the Unemployment Rate by analyzing U.S. labor sample surveys, Social Security Insurance statistics and employment office statistics. It then takes this data and compares it to the Current Population Survey, a monthly survey of 50,000 households, to express the unemployment rate.

This statistic is considered a lagging indicator, meaning that it confirms, does not predict, long-term market trends. After peaking in October 2009 at 10%, the Unemployment Rate was back down to 4.7% in December 2016 – a rate we haven’t seen since 2006 and 2007, pre-housing crisis.

 Nonfarm Payroll

The Nonfarm payroll represents the total number of paid U.S. workers and tells us how many jobs were created or lost in the previous month, and in which employment sectors. So this is a key indicator in how well the economy is doing. The total nonfarm payroll accounts for 80% of the workers who produce the GDP and directly affects the stock market and the U.S. dollar.

The Take Away

The Employment Situation Report remains one of the most widely watched indicators of the U.S. economy, despite its ability to fluctuate and its continuous revisions. Statistics regarding U.S. employment directly influence financial markets and provide valuable insight on interest rates. For the next Employment Situation Report release date, click here.

In the next edition of our economic indicator series, we’ll be focusing on U.S. housing reports. If you missed our last installment on consumer behaviors, click here.

Want to know the latest on how these reports are impacting rates? Feel free to contact a trusted RPM loan advisor who will explain it in simple terms so you can better understand your financing options and make the choices that are right for you.

By Kendall Taylor

Key Economic Indicators that Affect Mortgage Interest Rates: Consumer Behaviors

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Throughout the year, reports are released that provide us not only with a look at the current state of the economy, but insight into potential economic trends that could be headed our way. And because these economic indicators can cause mortgage rates to move on a monthly, weekly and even daily basis, it’s especially helpful for home buyers, owners and refinancers to fully understand and follow these reports so they can make informed decisions when needed.

Over the next few days, we’ll be taking a look at various indicators in the categories of consumer behavior, jobs and housing, and why they are ones to keep an eye on if you’re considering a new home purchase or refinance. We’ll start by diving into four widely followed reports based on consumer behaviors and how they can impact interest rates:

Gross Domestic Product

Gross Domestic Product (GDP) measures the market value of all goods and services produced in the U.S. and shows us how much the economy is growing or contracting each quarter. Stronger GDP causes interest rates to rise, while weaker GDP causes rates to fall. GDP is updated three times throughout the quarter as data comes in and these revisions can add to rate volatility as they trade daily.

For previous GDP reports and upcoming release dates, click here.

Consumer Price Index

The Consumer Price Index (CPI) measures the changes in prices paid for consumer goods and other services purchased by households, and is one of the two most common indicators of consumer inflation – the other being the Personal Consumption Expenditures index. Rates are sensitive to CPI because if market investors think their future rate of return on their investments won’t keep up with rising inflation cost, they will sell their investments, causing rates to rise. In other words, higher CPI means higher rates, and lower CPI means lower rates. Since the financial crisis of 2008, CPI has been relatively low, but an improving economy typically results in inflation and increased interest rates.

To see when the next CPI report will be released, click here.

To see when the next PCE report will be released, click here.

Producer Price Index

While the CPI measures changes in the prices paid for goods, the Producer Price Index (PPI) measures the changes in prices received for goods by producers in the U.S. It’s one of many producer inflation measures to determine the health of goods-producing sectors of the economy, like mining, manufacturing, agriculture, fishing, forestry, natural gas, electricity and construction. Rate markets react the same to PPI as they do to CPI and PCE—rates generally rise with rising PPI and fall with lower PPI.

To see when the next PPI will be released, click here.

Consumer Confidence Index

The Consumer Confidence Index (CCI) is designed to measure consumers’ optimism surrounding the state of the economy and is based on the results of the Consumer Confidence Survey. The survey is administered to 5,000 households every month. Participants are asked five questions, two about current economic conditions and three about future expectations. Participants can only respond with positive, negative or neutral. If the CCI measures consumer optimism high, the idea is that consumers are likely to purchase more goods and services, and an increase in consumer spending helps stimulate the economy.

The Conference Board releases the CCI on the last Tuesday of every month. For more information regarding the latest CCI, click here.

So you may have already started seeing a trend here – increases in these indicator reports can stimulate an increase mortgage interest rates, which may be a concern if you’re shopping for a mortgage. But, increases are also sign of an improving economy and as long as you’re finding yourself in a financially healthy position, there’s little to be worried about. We’ll continue our series by taking a look at U.S. employment.

Want to know the latest on how these reports are impacting rates? Feel free to contact a trusted RPM loan advisor who will explain it in simple terms so you can better understand your financing options and make the choices that are right for you.

By Kendall Taylor

Home Maintenance to Retain Value during the New Year!

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At the start to every New Year, we all promise to make changes for the better and set resolutions to help achieve these goals. One part of our lives is often overlooked– our homes. This year make an effort to maintain your home better and give it the upgrades it has so badly needed! Here are a few home maintenance updates that will help boost your home’s value in the upcoming year:

The Kitchen

Let’s face it– your kitchen is tired. After countless meals, baking experiments and afterschool snacks, your kitchen may be looking worse for wear. Consider refinishing or repainting your cabinetry. This upgrade can be budget-friendly, if you choose to Updated kitchenturn this upgrade into a DIY weekend project. To complement your new cabinetry, replace any outdated hardware. New hinges and drawer pulls can transform the entire look of your kitchen.

Looking for a more drastic change to your kitchen? Change out appliances in favor of more stylish and more energy efficient models. Or, give your countertops a fresh new look by exchanging tile or laminate for granite or quartz. These upgrades are more costly, but will leave you with a fully upgraded kitchen!

The Yard

Give your yard some TLC by adding greenery alongDrought-friendly plants in a garden box. the walkways and patching up any bare spots with fresh sod or seed. When adding new plants to your yard, look for native plants with a long lifecycle and consider the amount of water required, especially if you are in a drought-challenged area. Not only will these plants last longer, but they will require less maintenance and less frequent replacement, making them a cost-friendly option. When your backyard is livelier, and stops looking like an unfinished project, you will be more likely to spend time in it.

The Bathroom

Start the New Year off with a deep cleaning to get any dirt Updated bathroom with white tile.or grime off your bathroom surfaces. Small changes like replacing outdated wallpaper, getting shower glass to sparkle again, and updating light fixtures can boost your home’s value without emptying your wallet. If you are ready for a bigger remodel, think about adding new flooring and plumbing fixtures or upgrading your bath tub or shower. When it comes time to sell your home, you will be glad to see the return on investment from that new bathroom!

The Walls

A fresh coat of paint is the easiest way, and cheapest – especially if you paint it yourself, to rejuvenate your interiors! Consider painting the Neutral wallswalls of high-traffic areas, such as the front entryway or stairs. These walls can easily get scuffed and are often overlooked when it comes to home maintenance. If you are contemplating selling your home in the near future, consider painting your walls in neutral colors. This helps potential buyers be able to visualize their belongings in your home. Plus, neutral walls can work with a wide array of interior decorations, if you like to swap out interior decorations with the changing seasons.

The Floors

New hardwood flooringLike paint, new flooring can drastically change the look of your home! Stained or ripped carpet is not helping your home look any younger. Replace your old carpet with easy-to-clean and visually pleasing flooring. Hardwood flooring is appealing to a wide-array of buyers. Other more affordable and eco-friendly options include bamboo and cork. If you are lucky, you may have hardwood floors hiding underneath your carpet. With a little sanding and refinishing, your hardwood flooring will look good as new!

What upgrades do you plan to make to your home this coming year? Share in the comments below!

By Kendall Taylor

Setting Goals to Achieve Homeownership

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As a first step in preparing for a home purchase, it’s important to determine if you are actually ready to become a homeowner. Are you able to stay put for a while? Is your income fairly stable? If you answered yes to both questions, the next step is to carefully consider your finances. Resolve to do the following in the New Year and you could be ready to purchase a home sooner than you think – maybe even ahead of any anticipated rate increases.

New Year Resolutions

Evaluate Debt
Do you have credit card debt, auto or student loans? The amount of debt you are carrying is important because it factors into your debt to income (DTI) ratio which lenders use to qualify you for a home loan. It is calculated by dividing all of your monthly financial obligations (debt) by your gross monthly income. You generally want to aim for DTI less than 36%.

Set Up a Budget
Take a close look at what you spend every month. Start with a budget worksheet to organize your monthly expenses. To create some padding in your budget to allow for the unexpected, calculate 10% of your total expenses and add that to a miscellaneous expense category. Remember to include your savings as an expense.

A rent vs buy calculator will also allow you to do a simple payment comparison. But, be sure you consider all housing expenses, not just the mortgage. The amount you pay in rent may be similar to what you would pay in principal and interest on a mortgage loan, but you also need to take into account additional homeownership expenses like property taxes, insurance, HOA fees, trash pick-up and utilities.

Create a Savings Plan
Once you’ve established a budget, determine where you can cut expenses. Set a goal for paying down debt and saving for a down payment. Consider automating your savings plan to commit a certain percentage to be routed to a savings account each month.

While it is generally a good practice to have a 20% down payment to avoid private mortgage insurance (PMI), there are options to put down as little as 3.5%.

Do a Credit Check-Up
Everyone is entitled to one free credit report per year. Visit annualcreditreport.com to request your report and review it for errors and unusual activity. If there is something that needs to be corrected you can dispute the accuracy of the information with a consumer reporting agency under the guidelines of The Fair Credit Reporting Act (FCRA). Under this law, the agency must conduct an investigation at no charge and make any adjustments within 30 days.

Prepare for the Mortgage Process
After your budget is set and your savings plan is in place, it’s time to gather documentation and apply for a mortgage pre-approval. Be prepared to provide verification of your income with the last two years of W-2s, last two years of federal tax returns and your most recent 30 days paystubs. To verify personal assets you will need to provide the last two months of bank statements and quarterly investment/401k and retirement statements. Depending on your specific situation, additional items may be required so organize any documents that relate to your financial status.

To learn more about the pre-approval process and begin your journey to homeownership, contact a loan advisor today!

By Amy Malloy

Making Sense Of Your Credit Report

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Woman looking over Credit Report.

A credit report offers a summary of your financial life, including your loan payment history and the status of your credit accounts. Lenders use these reports, along with other information, to evaluate what lending options you qualify for.

What is in a credit report?

Credit reporting companies collect information from public records and companies you do business with in order to compile your credit report. Each credit reporting company formats and reports information differently. However, all credit reports contain essentially the same categories of information. Each category is broken down below:

Identifying Information

Your name, address, Social Security number, date of birth and employment information are all used to identify you on your credit report. This comes from the information that you have provided to lenders, and is used solely for identification purposes.

Trade Lines

Trade lines represent a list of your total number and history of credit accounts. Lenders report on the type of accounts you established with them, such as bankcard, auto loan or mortgage. The date you opened the accounts, your credit limit or loan amount, account balance and payment history are all documented here.

Credit Inquiries

Each time you apply for a loan, you authorize a lender to ask for a copy of your credit report. The Credit Inquiries section identifies everyone who accessed your credit report within the past two years. The report lists both ‘voluntary’ inquires and ‘involuntary’ inquiries. ‘Voluntary’ inquiries appear when you make a request for new credit. ‘Involuntary’ inquiries appear when lenders order your report. This can happen when a lender wants to make you a pre-approved credit offer in the mail. ‘Involuntary’ inquiries do not affect your credit score.

Public Record and Collections

Here you will find public record information from state and county courts, as well as information on debt from collection agencies. Public record information can include bankruptcies, foreclosures, suits, wage attachments, liens and judgments.

What should I look for in my credit report?

It is important to review your credit report once a year to check for accuracy. Keep an eye out for any information that is inaccurate, incomplete or information that should no longer be on your credit report. Remember, your credit report should only show credit inquiries within the past two years. Other errors to look out for are addresses where you never lived or employers you never worked for.

If you find any errors, report them to the creditor and the credit reporting company that you received the report from to have them corrected. If you think that any fraud or identity theft has occurred, contact the credit reporting company immediately. The credit report will include information on how to dispute incorrect or incomplete information.

Where can I get my credit report?

The Fair Credit Reporting Act (FCRA) requires that each nationwide credit reporting company give you a free credit report once every 12 months.

You can request your credit report at www.annualcreditreport.com or call 877-322-8228.

By Kendall Taylor

Is it Time to Adjust Your Second Mortgage?

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Hourglass with home inside.

With the recent announcement of a fed rate hike, if you have a home equity line of credit (HELOC) you’ll soon see a rise in your monthly mortgage payment. HELOCs had rock bottom rates for the past eight years and provided an alternative and affordable method to access equity. But as rates trend upward in the months and years ahead, a payment spike of 2% or more may be enough to consider additional options. Here’s why:

Rates Are Going Up

While rates are still low by historical standards, they are set to rise over the course of 2017 and beyond. HELOC rates are tied to the Prime Rate, a constantly moving index, plus a base rate called a margin. Over the past 20 years, this rate peaked at 9.5% and averaged 5.39%. This is almost 2% higher than today’s Prime Rate of 3.75%.

Prime Rate 20 Year Graph

If you have a 2% margin on your HELOC, add this to today’s Prime Rate of 3.75% and your rate would go up to 5.75%. Add it to a 20-year average Prime Rate and your HELOC rate is 7.39%.

For now, it is likely that your HELOC only requires you to pay interest each month. But at the 10-year mark, you must pay a principal plus interest payment amortized over 20 years and your rate will still adjust with Prime monthly.

If the uncertainty of a rising Prime Rate leaves you anxious about your monthly payment, there are two solutions to all this anxiety and extra cost.

Refinance & Pay Off Your HELOC:

Even with first mortgage rates spiking .5% since November, there are still about 4 million homeowners who will benefit mathematically from a refinance of their first mortgage. Depending on how much equity you have, you can combine your first and second mortgage into one loan and pay off your HELOC. This would offer you the benefit of one single mortgage payment at the option of a fixed-rate that would not adjust.

Switch to A Fixed-Rate Second Mortgage:

If you want or need to keep your second mortgage, but don’t want to risk rising interest rates, RPM’s fixed-rate second mortgages provide a stable payment over the course of the entire loan term. This second mortgage can be obtained on its own while your first mortgage’s rate and payment remains untouched. Today, the rate on a 20-year fixed-second is about 1% lower than where your HELOC is headed. This means interest cost on a fixed rate second mortgage is $83 per month less than a HELOC, and your payment is fixed.

Rates on new first mortgages and fixed second mortgages won’t remain this low for long, so let’s replace your rising-cost HELOC before it’s too late. Contact a trusted loan advisor today to discuss your options.

By Jessica Velazquez

 

What Rising Rates Mean For Home Buyers and Owners As 2017 Approaches

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As 2016 draws to a close, it’s a good time to reflect and look ahead to what 2017 may bring. The Trump Administration’s plans to cut taxes and prioritize spending on infrastructure have already started to impact the housing market and mortgage marketplace. Many of the trends we’re already seeing at the end of this year are expected to continue to affect home financing in 2017. Let’s take a look:

Mortgage Rates – Up, Up, and Still Low by Historical Standards

Freddie Mac RatesAmid post-election uncertainty investors pulled their money out of U.S. Treasury bonds (a benchmark for mortgage rates), causing rates to increase. Rates on 30-year fixed mortgages rose about .5% between the election and the December Fed meeting. This means monthly payments are about $85 more per month on a $300,000 loan and about $172 more per month on a $600,000 loan.

Most investors feel that the Trump administration’s policies will promote growth and encourage inflation. Threats of inflation often drive investors to sell bonds, bond prices drop in a sell-off, and rates increase as a result. Although rates could continue higher to start 2017, rates are unlikely rise as quickly as they did post-election, and the long-term rate chart above shows that rates are still extremely low by historical standards. Many homeowners may still benefit from a refinance.

Fed Rate Hike: What’s the Impact?
The federal funds rate also has an impact on longer-term home loan rates. On December 14, 2016, the Federal Reserve announced a rate increase of .25%, following their first meeting since the election.

Homeowners with a Home Equity Line of Credit (HELOC) will see their rate rise by .25% on their next payment as a result of this Fed decision, which impacts the Prime Rate. HELOCs are tied to a margin plus the Prime Rate, which is now at 3.75%. So, if a borrower’s HELOC margin is 2%, that means the HELOC rate will be 5.75% on their next payment.

If Trump delivers on his promise to accelerate economic growth and lower unemployment, analysts expect the Fed could step up the pace of rate hikes to counter expected increases in inflation. Fed officials are widely expected to raise rates two or three times in the coming year, depending on the health of the economy. Switching from a HELOC to a fixed-rate second mortgage now may be an option for some borrowers to protect themselves from later increases.

New Loan Limits
On a positive note for home buyers, the new year will kick off with an increase to maximum loan limits for Fannie Mae and Freddie Mac mortgages, also known as conforming loans. The limits are going up for the first time since 2006. An increase in conforming loan limits will also have a potential impact on FHA borrowers since FHA sets its minimum national loan limit at 65 percent of the conforming loan limit. This change has the potential to increase credit capacity and home buying power for those who have been unable to enter the real estate market in the recent past. According to NAR President, William Brown, “Today’s conforming loan limit increase is a much-needed recognition of rising home prices in high-cost markets, and a help to first time and lower-income borrowers looking to utilize an FHA mortgage.” Click here to see updated loan limits by county.

It’s Time For A Mortgage Review
The economy is improving, which will continue to help the housing market improve. For more insight into the market and the possible impacts to your home financing opportunities, contact a loan advisor to discuss your options.

By Amy Malloy

How to Read a Loan Estimate

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Couple comparing two documents.

Before deciding on a lender, it is important to research your options and find the loan that best fits your financial needs. When you start your research, you can request a Loan Estimate from as many lenders as you wish. Each lender will supply you with a Loan Estimate in the same, straightforward format, making it easy to compare your loan offers. To make your research as smooth as possible, below is an explanation of each section of a Loan Estimate:

Loan Estimate Summary

The first page of a Loan Estimate is a summary of the loan broken down into the following four parts:

General Information

Included here are the date issued, applicants, property address and the sale price. It will also state the proposed loan term, whether the loan was for a purchase or refinance, if a certain loan product was used, the loan type, loan ID number and the rate lock. It is important that all this information accurately reflects the information you and your loan advisor discussed. If anything looks different than what you expected, ask the loan advisor for clarification.

Loan Terms

This section identifies the loan amount, interest rate, monthly principal and interest. Remember if the estimate is for an adjustable rate mortgage, these amounts can increase after closing. This section will also indicate whether or not your loan has a prepayment penalty or balloon payment.

Projected Payments

Here, you will see the payment calculation for your estimated total monthly payment. This calculation includes your monthly principal and interest, mortgage insurance and your estimated escrow. Your estimated escrow will include any charges related to homeownership, including any property taxes or homeowner’s insurance.

Costs at Closing

This shows a summary of the estimated closing costs and the estimated cash to close. The estimated cash to close includes your down payment and other costs or fees to be paid at closing.

Closing Cost Details

On the second page of the Loan Estimate you will find a breakdown of the closing costs associated with your loan. The Closing Cost Details are broken down into your ‘Loan Costs’ and ‘Other Costs.’

  • ‘Loan Costs’ is comprised of one-time costs broken into three sections: Section A (Origination Charges), Section B (Services You Cannot Shop For) and Section C (Services You Can Shop For).
  • ‘Other Costs’ is comprised of a combination of prepaid and one-time costs, including taxes and other government fees, prepaids, initial escrow payment at closing, and any other costs.

For a more detailed breakdown of Closing Costs, please click here.

Additional Information about Your Loan

Additional Information

At the top of page 3, you will find the lender or mortgage broker’s information. This will include their NMLS # and license ID, their name, email address and phone number. Make sure the information that is listed for your loan advisor is correct.

For more information about finding the right mortgage professional for you, click here.

Comparisons

This section offers several calculations to help you compare the cost of this loan with other offers from different lenders. Loan costs can vary across lenders and different types of loans. To ensure that you are getting the loan that fits your financial needs, request Loan Estimates for the same type of loan from different lenders.

Other Considerations

‘Other Considerations’ will share other important information regarding your loan. This section will say whether your loan requires an appraisal of the property and who is responsible for paying that fee. It will state whether or not your loan can be assumed by another person, if you were to sell or transfer the property to someone else. It will also define the requirements for homeowner’s insurance, late payment fees and potential for a future refinance. This section will also state your lenders intention to service your loan or transfer the servicing to another lender.

Confirm Receipt

By signing the receipt, you are acknowledging that you have received this Loan Estimate. It does not mean that you are required to accept this loan.

To look at a sample Loan Estimate, click here.

Contact an RPM loan advisor if you would like assistance understanding your Loan Estimate and financing options.

By Kendall Taylor

What You Need To Know About Locking A Rate

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The financial markets reacted to the initial uncertainty surrounding the Trump Administration with a post-election uptick in mortgage rates. Despite the recent increase, interest rates are still lingering near historic lows. But, how long will the low rates last? According to a recent Zillow article, “This dramatic rate spike might level off near-term, but don’t count on a reversal back to record lows.” If the economy continues to gather momentum and inflation picks up, chances are good that the Fed will increase rates at the final policy meeting of the year in mid-December. There’s still time to act on low rates before another increase and a rate lock can help ensure that you don’t miss an opportunity! Here’s what you need to know:

reviewing rates on computer

What Does it Mean to Lock in a Rate?
While recent mortgage rate increases may not be cause for panic, you may want to lock in a rate to protect yourself from additional rate increases while you complete the loan process. A rate lock is a guarantee from your lender that you can obtain a loan at a certain interest rate, at a certain price, within a specific time period.

Getting Started
The first step is to research rates, which you can do by contacting a mortgage professional or submitting an inquiry online. As you shop around keep in mind that both the interest rate and the Annual Percentage Rate (APR) will be quoted. It’s important to understand the differences in the rates in order to accurately compare quotes.

The interest rate is the cost of borrowing the principal loan amount and is used to calculate your monthly payment. The APR reflects not only the interest rate but also the points, fees, and other charges associated with the loan. For that reason the APR is usually higher than the interest rate.

Discount Points and Fees
The cost to obtain a lower rate for a mortgage loan is expressed in points. Each point charged is equal to 1% of the loan amount. For example, on a $400,000 loan amount, the cost of a discount point would be $4,000. Discount points are essentially prepaid interest on the loan, so the more points you pay, the lower your interest rate. Whether or not you should pay points depends on how much money you have to put down at closing and how long you plan to stay in your home. You want to consider if the cost for a slightly lower rate and monthly payment are worth the amount of upfront cost. Ask your lender to review the options with you.

When to Lock
On a purchase loan it usually makes sense to lock in a rate as soon as you go into contract for a property. In the case of a refinance, you should lock your rate at the time you start the application process, which will start the clock ticking. A rate lock is typically good for 30, 45, or 60 days. Ask your lender to explain the costs and rates for different duration periods and make sure the duration of your lock period gives the lender enough time to process the loan.

Peace of Mind
A rate lock can reduce some anxiety over rate fluctuation while you complete your transaction. Contact an experienced loan advisor who can help you consider the costs and benefits of each home financing option and then move quickly when the time is right to lock in a rate and a loan that works for you.

By Amy Malloy

Holiday Décor Safety Precautions

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Santa Hat and Christmas Tree in the background.

It’s the most wonderful time of the year! Part of the joy of the holiday season is gathering with friends and family to celebrate and honor traditions. For most, that includes decorating their home. To ensure that your holiday celebration is filled with laughter and not a disaster, take a look at these holiday décor safety tips!

The Tree

The tree is often the center of a home’s holiday decorations. To make sure it will last till December 25th, be sure to purchase a fresh tree. A fresh tree’s needles will be hard to pull from the branches and will not break when bent between your fingers. Once you select a fresh tree, it is important that you water the tree daily to prevent it from becoming dry and more susceptible to fire.

Little girl hanging candy can on a tree.If your family prefers an artificial tree, purchase one that has the “Fire Resistant” label. Although this doesn’t guarantee it won’t catch on fire, it shows that it was manufactured to resist burning and should extinguish quickly.

When it comes time to choose a location for your tree, refrain from placing the tree next to any fireplaces, heating ducts or radiators. Be thoughtful of placing your tree away from high traffic areas, such as doors and walkways. You don’t want someone to brush against the tree and accidentally break one of Aunt Edna’s antique ornaments!

Holiday CandlesHoliday Candle

Candles give a warm glow to a room and are often a part of a home’s décor, especially during the holidays. Although candles are beautiful decorations, they increase the risk of a fire. Never leave candles unattended and remember to blow them out before going to sleep. When placing your candles, keep them away from curtains and trees, and out of the reach of children and pets. Consider using battery-operated LED candles as a safe alternative, especially if you are expecting lots of children in your home for the holidays.

The Lights

When purchasing lights, buy lights that have been approved for safe use by a nationally recognized testing laboratory, such as the Underwriters Lab. If you already Holiday lights outside a house.have lights, check to see if they are damaged or worn out. Cracked light sockets, frayed wires and loose connections can be a fire hazard.

Before hanging up your lights, figure out how many outlets are available. Keep in mind that you shouldn’t use more than three standard-size sets of lights per single extension cord. If you overload the outlet, it can overheat and cause a fire.

Inflatable DecorationsInflatable snowman decoration

You don’t want to be the family that let the abominable snowman loose in the neighborhood. Follow the manufacturer’s instructions to accurately secure it to the ground. If the weather gets windy, turn off any blow-up decorations. These decorations should also be turned off overnight or when you are not at home.

 

Post-Holiday Cleanup

Crumpled wrapping paper underneath a tree.Once the celebration has wrapped up, the real fun begins: the cleanup. Although it may seem like a good idea to throw crumpled wrapping paper into the fire for easy disposal, don’t! This can cause a flash fire. When it comes time to remove the tree, make sure to give the surrounding area a thorough sweep. Clear away any broken glass, metal hooks or pine needles that may have been left during the tree removal.

By Kendall Taylor