As part of the Stimulus Bill that has passed the House, and will most likely get signed into law in the next few days, conforming loan limits for the next 12 months (most likely starting in February) will be raised up to $729,750! The new limits will be based on the area’s median home price, plus 25% or 50%. Since this language is yet to pass we can only speculate, but ‘people in the know’ seem to think that it will give us a max conforming limit of $625,000 for the DC Metro area, including real estate in Northern Virginia, Washington DC and Southern Maryland. The measure would also permit the Federal Housing Administration (FHA) to indefinitely insure loans up to that same level. Currently, FHA loans may not exceed $362,250.

The Bill helps us immensely with spurring buyers back in the market, and letting home owners in trouble refinance. As you’re probably aware, the current conforming Fannie Mae and Freddie Mac limit is capped at $417,000. Anything above that amount is considered a Jumbo loan and comes with a significantly higher interest rate. Northern Virginia and DC real estate has priced many first time home buyers out of the market in recent years. Once this new limit takes hold, buyers will be able to finance more expensive homes with a lower interest rate.

“In high-cost states, many home buyers with good credit could save $3,000 - $5,000 each year by not being forced into the current jumbo mortgage market”, said NAR president Richard Gaylord. “Currently, only families in lower cost areas are able to qualify for these types of affordable loans. Such a move would stimulate home sales and help stem the rise in foreclosures, reducing the number of foreclosure by as much as 210,000, and increase economic activity by $44 billion. What’s more, this will come at NO cost to taxpayers– it’s a policy change that could really boost the economy,” Gaylord says.

Other NAR projections show that raising the loan limit will reduce the supply of homes on the market by 1 - 1.5 months, and increase home prices by 2 to 3 percent. As many as 500,000 jumbo loans will refinance into lower interest rates according to the analysis.

If mortgage interest rates stay at the level they are now (or lower), the DC Metro area will have a VERY active Spring/Summer market!

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Refinance applications rose 16.9% during the week ended January 18, 2008 compared to the previous week, and are up 92% since November 2007. Purchase applications are up 7% during the same period. Also, the 4-week moving average for all loan applications increased 13.7% compared with the same period a year ago.

The average interest rate for the 15-year fixed-rate mortgage was 4.96%, down from 5.07%. The 30-year fixed-rate mortgage was 5.49%, down from 5.62%. The rate for a one-year ARM was 5.51%, down from 5.77%.

The cause for this is because interest rates are at an all time low right now. With so many houses available on the market right now, buying a home becomes a lot more comforting with these kinds of rates!

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30-year fixed rate at 5.42%; 10-year Treasury yield at 3.63%

Long-term mortgage interest rates were flat to slightly lower Friday, and the benchmark 10-year Treasury bond yield inched up to 3.63%.

The 30-year fixed-rate average dipped to 5.42%, and the 15-year fixed rate stayed at 4.93%. The 1-year adjustable rate held at 5.3%.

The 30-year Treasury bond yield rose to 4.28%.

Rates and bonds are current as of 7:15 pm EST.

Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5.

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A brand new community called Chatsworth Village in Manassas, VA is absolutely beautiful. These are garage townhome-style condos with easy access to Rt. 66 and the VRE. Units feature: Gourmet Kitchen, corian countertops, upgraded cabinetry, stainless steel GE appliances, hardwood flooring in foyer and kitchen area, ceramic tile in all bathrooms, dual owner’s suites(one on main level), upper owner’s suite features a walk-in closet, porch, and gas fireplace. 2 & 3 bedrooms, 2 bathrooms, with 1 car garage with 1,600+ sq. ft. are starting in the high $200k’s.

If you would like to visit Chatsworth Village in Manassas, VA, be sure to give us a call at 1-888-998-9455 or at info@homezill.com to receive an additional 2% cash back on the purchase of your home!

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RE/MAX International is the nation’s number one real estate franchise, and the number ten franchise overall, according to Entrepreneur Magazine’s 29th Annual “Franchise 500 Survey.” RE/MAX has held the honor of the top real estate franchiser for eight of the past ten years. The survey, which appears in this month’s edition of Entrepreneur Magazine ranks RE/MAX among the top ten in four different franchise categories. The Denver-based real estate franchiser was ranked #1 in the low-cost franchise category, #7 among global franchises, #10 in the fastest-growing franchise category, and 10th among ALL franchises. Its closest competitor in the real estate industry was ranked in the 43rd position.

“We are not surprised by our high ranking, given the quality of our affiliated broker/owners and sales associates,” said Margaret Kelly, CEO of RE/MAX International. “They lead the industry in experience and productivity and we’re proud to offer them a comprehensive array of support services.”

The Entrepreneur Franchise 500 Survey is the most comprehensive franchise ranking in the world. The initial survey was conducted in 1980, and it was the first ranking of franchises in the industry. Over the years, the ranking procedure has been refined to provide the most accurate formula for identifying today’s top franchises.

Through extensive online search capabilities, HomeZill.com servicing Northern Virginia, Washington DC and Maryland has provided home buyers with one of the best DC Metro MLS searches on the web. Not only does HomeZill provide a great home buyer search tool, but they give up to 2% cash back in home buyer rebates, saving consumers thousands of dollars on commissions!

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Whether you’re a veteran in the business or a rookie anxious to get your feet wet, there is a science to investing in real estate. You can turn out to be a genius or a fool, and it will all fall on your research and preparation. One way to move investment homes into other properties is by the 1031 tax exchange program. This program allows you to take advantage of tax savings to upgrade your investment portfolio.

Here are some guidelines to follow when venturing into the investment world:

1. Compare Property Values and Rents
The best way to measure a property’s market value is to compare similar homes within a close radius. This holds true for rentals as well. Reasonably priced rental properties can quickly attract renters. Pricing a home at a high rental rate can push people to buy a home instead. A good measuring tool is to look online or in the local paper to see if there are any specials on rentals. If you tend to see “first month free”, you might want to stay away from that market. If you’re new to investing, stick with areas that are close to you. This will save you from traveling expenses if there are any issues with the property.

2. Be Careful - Tax Laws May Change
The tax code is constantly changing. Don’t base your purchase on the current tax laws. When you find the right property, the tax code should not play a factor. That’s when you’ll know it’s a good investment.

3. Specialize In Something You Know
If you’re a rookie to the business, stick to a market segment that is familiar to you. Focus on one aspect- like fixer-uppers, foreclosures, low-down payment properties, condos, or starter homes. This will help you become an expert in your segment.

4. Know The Costs Going In!
Don’t let the costs come and bite you in the rear! Make a spreadsheet that lays out all the possible expenses. Some things to consider are operating expenses, loan payments, vacancy costs, property upkeep, and taxes. This will allow you to budget accordingly without any surprises down the road.

5. Know Where Your Tenants Are Coming From
If you have increased your rent, don’t be surprised if your tenants want to move. Make sure you collect a security deposit when the lease is signed.

6. Assess The Tax Situation
Taxes are an important part of successful real estate investing. They often make the difference between positive and negative cash flow. Good research will explain how you can manipulate the tax situation to your advantage. (I recommend getting in contact with a tax consultant)

7. Investigate Insurance Coverage
If the seller’s coverage is based on lower-than-current replacement value,
your insurance costs may increase if you pay a higher purchase price.

8. Confirm Utility Costs
Make the phone calls to verify the utility expenses, especially if you’re going to include it in your tenant’s rent.

9. Consult Your Accountant
Make sure your accountant has experience dealing with the evolving tax code. Taxation is a key part when investing in real estate.

10. Inspect!
Always get a home inspection when purchasing a home. Whether you’re hiring a professional or examining the property yourself. An older home will of course require a closer examination but it’s always a good idea to get a professional’s opinion.

These are some general principles to adhere to before deciding on whether to take the plunge. If you are one of those do-it-yourself-ers when it comes to researching properties, then you should also contact HomeZill before making your offer on a home. If the home is listed with an agent or the seller is offering a buyer agent commission, then we can rebate you an additional 2% cash back home buyer rebate in Northern Virginia, Washington DC or Maryland. So give us a call and we’ll check to see what the commission structure is for the homes you are interested in… Good luck out there!

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