Federal Reserve Surprises Financial Markets

The Fed's met today and made a huge announcement which made interest rates improve and will help extend the amount of time that rates will stay at these historically low levels. Below is a quick summary on what happened today and how it can benefit you.If you are thinking about purchasing a home, now is the time to get pre-approved and find a home. Interest rates are very low which will keep your payments low. The government is also giving first time home buyers a huge $8,000 tax credit if you purchase a home before November 30th. Additionally, home prices have fallen to levels not seen in six to twelve years, while home buyers from coast-to-coast have been buying distressed properties at the rate of 45% of total sales. Now is the time to buy homes.If you have been considering refinancing your home please give me a call. With the current low interest rates your payment can be reduced to potentially save you hunderd's of dollars per month while getting you locked into the security of a 30 year fixed mortgage.

Spring is the best time to sell your home!

New jobs, retirement, and maybe just a taste for change, these are some of the life circumstances that make you want to sell your home.
Here's the good news: There are buyers out there, and if you want to snag one, you have start with the beginner steps and move on to the advanced ones.
Traditional selling tips still apply:
Start now. Spring is usually the best time to sell, but there will be no other timing advantages. Fix up and clean up. Don't do expensive renovations, but paint it and make it completely clean.
De-clutter. All of it. Keep only enough furniture to make the house livable and put the rest in storage. That includes knickknacks, family photos, and more.
Clean out your drawers and closets. You want your closets and cabinets to be spacious. More advanced steps include:
* Set a realistic price. The housing market changes naturally over time. A good price involves many factors including knowing recent sales prices in the neighborhood and understanding what features of your home increase its value. A good real estate agent can set the price and make it eye-catching enough to attract serious buyers to your property.
A Realtor® will promote your home at office meetings as well as at Realtor® pitch sessions. In addition, Realtors® do a wide range of web-based marketing to help with maximum exposure.

Fannie Raises Limit on Investor and Second Home Borrowers from 4 to 10 Financed Properties

At the urging of NAR, Fannie Mae announced a new policy on February 6, 2009, to allow investors and second home buyers to own up to 10 financed properties. The new policy takes effect on March 1, 2009, and replaces the current 4-property limit. The restriction applies to the total number of financed properties, not just to the number sold to Fannie Mae.
Investor and second home borrowers that seek to own between 5 and 10 financed properties must meet additional eligibility requirements. Borrowers must have a credit score of at least 720. The maximum loan-to-value ratio is 70% or 75%, depending on specified criteria. Borrowers may not have any history of bankruptcy or foreclosure in the past 7 years, or any mortgage delinquencies of 30 days or greater within the past 12 months. Reserve and other requirements also apply.
Fannie Mae Announcement 09-02 (2/6/09)

FHA raise’s loan limits in some areas

The Federal Housing Administration temporarily will raise the limits of loans it will insure to nearly $730,000 in certain areas, the chief of the U.S. Department of Housing and Urban Development said at a meeting Wednesday at the Treasury.

"FHA is over 20 percent of the mortgage market," HUD Secretary Shaun Donovan said. "Ensuring that FHA is a constructive part of the solution is a critical part of this."

FHA loan limits in high-cost areas had been capped at $625,000. The increased limits are scheduled to stay in effect through 2009.
This makes housing more affordable for many would be homeowners; FHA has lower down payment guidelines and is more flexible on fico scores.

Understanding buying a foreclosure

Buying a bank owned /FORCLOSURE HOME
If you have been thinking about buying a foreclosure property as a smart investment, to live in or as a second home for your family, now is a great time to buy. Buying a foreclosed home is a task that should not be taken lightly. You need to know the ins and outs of foreclosures and that is why it pays to work with a professional that understands and can guide you through the process.
You will need to expect to do some research with the help of a Realtor® before finding a good property. In very rare instances, you may be able to purchase the first property you look at, but in general, it may take you several offers due to other buyers making multiple bids on bank owned homes.
Get Pre-Qualified: Securing financing early in the process is essential; it will ensure that you are qualified to purchase the property and is crucial when you submit an offer to buy a bank owned home, the asset manger will require a reputable lenders letter of prequalification. Getting pre-qualified will give you greater understanding of what you can afford. Working with a lender that has worked with a number of foreclosure homes, plus understands the foreclosure process in detail will make the process much easier. Taking the time to find the right lender will save you from a lot of frustration and may save you from missing a good deal.
Understanding the Process: Knowing about the foreclosure buying process is a significant part of purchasing an REO home. Working with an experienced Realtor® to bid on the property is essential if you want to have a successful transaction.

Plan to stem home foreclosures

Several major banks are expanding their efforts to halt home foreclosures while the Obama administration develops its plan to help struggling homeowners.
The White House said President Barack Obama will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures.
Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Monday. It contained outlines of a foreclosure-relief effort, however few details.
More than 2.3 million homeowners faced foreclosure proceedings last year, a 81 percent increase from 2007, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.
Obama's announcement is expected to include details about how the administration plans to spend at least $50 billion on foreclosure prevention and establish national standards for modifying home loans.

30-year-fixed drops to 5.25

The average rate on a 30-year fixed mortgage dropped to 5.25 percent this week. A year ago, the 30-year, fixed-rate mortgage averaged 5.72 percent. It's a great time to buy interest rates for 30-year fixed-rate mortgages are almost 1.5 percentage points below last year's peak set in late July, "offering many an incentive to buy or refinance.

Freddie Mac and sibling company Fannie Mae own or guarantee about half of the $11.5 trillion in U.S. outstanding home loan debt. The government seized control of the companies in September.

In late January, Freddie Mac reported that U.S. homeowners took out $17.5 billion in home equity in the fourth quarter by refinancing their mortgages, the lowest amount since the first quarter of 2001. If rates continue to go down we will start to see a shift...optimism is in the air.

House and Senate may meet in the middle. The House is proposing a $7,500 tax credit for first-time homebuyers under a certain income threshold. The Senate upped the ante last week, opting for a $15,000 tax credit available to all house hunters.

Home buyers looking for lower mortgage rates and borrowers struggling to keep their homes may soon receive help as Congress and the Obama administration yesterday moved closer to delivering a boost to the troubled real estate sector.

In separate actions yesterday, US Treasury Secretary Timothy Geithner disclosed a new financial industry bailout package that includes $50 billion to help refinance mortgages of homeowners at risk of foreclosure, and the US Senate passed an $838 billion economic stimulus bill that includes a $15,000 tax credit for home buyers.
Both measures drew praise from the real estate industry as necessary to stimulate home buying, mitigate foreclosures, and create jobs.