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Spring Comes Early!
Tuesday, 13 March 2012 17:14

On a day like today, it's hard not to feel that winter is now behind us, and spring is in full throttle.  The high of ~80 degrees is around twenty degrees above average for this time of year.  What also seems to be above average is the level of market activity lately - listings are coming onto the market and going under contract quick, and prices are getting a bump up in neighborhoods across the region.  Hard to say whether it is interest rates or pent-up demand; likely a bit of both.  It is very real though, and could represent the first clear indicators of a sustained upward move in real estate activity for the region.  Not that Washington was ever near the levels of some other parts of the country to begin with.

For the moment, it seems that the strong demand/supply dynamic is not being pushed heavily through onto pricing, which is a positive for buyers in the area active at this time (and there are a lot of them).  Finding a home though can be difficult for these same buyers who might find themselves in weaker financial positions and competing against multiple offers.

Snapshot on VA Loans for 2012
Tuesday, 28 February 2012 10:19

Given the large population of active, reservist, and retired military personnel in the greater DC area, VA loans are a very important mortgage product in our region.  The end of 2011 saw some confusion on potential changes to the VA funding fees, which in fact now remain at their previous higher levels following passage of HR 674 by Congress in November of last year.  New for 2012, loan limits in the DC area have been reduced as well.  Where previously a veteran could take out a loan towards a home purchase in our area of up to $818,500 in size with zero percent down, that limit has come down this year to a national cap of $625,500 inside of the contiguous 48 states.

Of course, $625,500 is nothing to sneeze at, and in fact for borrowers who wish to purchase a more expensive home under the VA program, there is ino actual limit to the price of home they can afford.  Assuming that the borrower otherwise qualifies for the loan under the usual criteria, any amount over $625,500 may be funded by the VA lender so long as the borrower puts at least 25% of any amount over $625K towards a down payment.   For a $1M dollar property, this would translate to a minimum down payment of $93,625 - well below what most conventional borrowers should expect to be putting down towards a similarly priced property.

It's not all claw-backs and reductions though: looking at interest rates, the take away is that VA loans have been offering up some incredible rates so far this year, coming in lower than a standard conforming conventional loan almost every time.  In fact, on several recent deals, I have seen clients get in the 3.75%-3.875% range with negative points paid, meaning that the lender is actually putting money towards closing costs for the borrower at that rate, rather than charging for it.  They are quite simply some of the best rate packages the industry has ever seen.

For Washington area residents eligible for VA benefits, they should find a very competitive rate environment out there.

Happy New Year!!
Wednesday, 18 January 2012 22:27

Happy 2012!  It speaks to how hectic my schedule has been the last several months that this is my first post in a long time... definitely *too* long for someone looking to have an active web presence.  I do blame the football season somewhat though, as certain free hours were devoted to watching games that should have been devoted to writing about the market.  Writing about real estate must of course come second to practicing real estate, and in that regard I can say that 2011 was a great year - and 2012 looks to be even better than the last.  (In case you were wondering, watching football comes after practicing real estate as well.)

Over the next several days, I will be looking to address topics such as the revised loan limits in the DC area and how they effect the home purchase process, as well as local trends I've been noticing these last several weeks.  To spoil that later point somewhat, it seems to me that buyer activity has taken a sharp turn upwards from December to January.

Also new for this year I have added the "Off Topic" section, under which thoughts and posts not directly related to real estate will be placed. I hope that these will help to flesh out my view of our area and the world in ways that go beyond real estate, and which might prove insightful and/or help to provide context to the other more on-topic posts.  Or of course, it might center on discussion of HGTV shows or other such points of novelty.  But if you're reading about real estate in the first place, you must love HGTV, right?

We'll see what we see!  Happy belated New Year...

Veteran Administration Funding Fee Set to Drop
Wednesday, 14 September 2011 18:54

For the VA (veteran administration, not Virginia) buyers in the region planning to shop for a property either now or in the near future, good news may be coming this October in the form of lower funding fees.  VA funding fees - those add on costs traditionally associated with this unique loan product - represent the dollar amounts charged at settlement by the Veterans Administration for running and administering the home loans program.

For the last several years, the funding fee members of the military buying their first home has stood at 2.15% of the total loan amount (on a zero-down loan).  For repeat buyers, the amount has been 3.30% of the total loan amount on zero-down loans.  Starting this October 1st, these amounts will move down to 1.40% and 2.80% for first-time and repeat buyers, respectively.

At the end of the day, changes in the funding fee will probably not be what inspires a given VA-eligible buyer to enter the market.  After all, on a $400K loan, the difference for a first-time homebuyer would be on the order of $3000 in additional financing over 30 years.  However, in conjunction with the extremely favorable interest rate environment, it is yet another positive for the regions many military veterans and reservists shopping for their home in our nations capital.

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Coldwell Banker Residential Brokerage
4500 Old Dominion Dr, Arlington VA 22207
Phone: (703) 524-2100 Fax: (703) 524-9014