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Mortgage Rates Near Record Lows
Tuesday, 16 August 2011 10:40

Last Monday, following Standard & Poors' decision to lower the debt rating of the United States (and consequently Fannie Mae and Freddie Mac), the immediate concern for the industry, and for home buyers/sellers in the present market, was that interest rates might suddenly skyrocket on the news.  The week that followed certainly was a roller-coaster ride for the markets, but as for interest rates, they have only continued to fall.  Whatever the noise coming out of S&P recently, it seems clear that during this period of global economic uncertainty, large investors still feel that their money is best kept safe in securities backed by the promise-to-pay of the United States government.  And with money pouring in from Europe, Asia, and elsewhere helping to keep rates extremely low, American home buyers and existing owners looking to re-finance can be one of the groups to benefit in a very real way from the current rate situation.

Right now for individuals looking to purchase or refinance, given good credit, it is not difficult to find area lenders offering interest rates on a 30-yr fixed of between 4.25% and 4.5%, with a minimum of points or origination fees.  It might be that rates continue lower in the days/weeks/months to come, but very unlikely that they go too much lower, as they are already hovering around all time lows.  For those sitting on the fence wondering whether rates will go higher or lower as time goes on, I think the risk is definitely towards higher rates.  Realistically though, rates may stay around this level for quite some time to come.

Be Careful on Craigslist!
Thursday, 04 August 2011 22:46

It goes without saying that Craigslist has been synonymous with scamming attempts and fraud for quite some time, but the past two weeks have put into stark relief for me the sophisticated level to which several of these scams have evolved.

The backdrop for this story is a wonderful 3-bedroom brick colonial in Ashton Heights I had placed on the rental market for a long-time client of mine in late July.  Given the property's location, condition, and approachable pricing (for a N Arlington 3-bedroom), I was fielding several calls/emails a day from parties interested in stopping by to check it out, on top of the independent traffic generated by other agents and their clients.  To my surprise though, shortly into the listing I began answering calls from prospective tenants wanting to know why the home was listed for $700-900/mo on Craigslist and other personals sites, and $2700/mo via sites such as Trulia, Zillow, etc.  The answer of course, was that it wasn't listed at that price... at least not legally.

Home Tips for the Heat Wave
Saturday, 23 July 2011 07:40

Weeks like this one can take an immediate toll on your body should you find yourself caught outside for any length of time at all.  Unfortunately for me, that has been the theme of my last several days, going from home to home meeting clients in my (stylish) black car, dressed in business attire.  It isn't very much different for your home though: consider your air conditioning as it struggles against enormous odds to lower your home's temperature by twenty, maybe thirty degrees vs the ambiet temperatures outside.

In order to reduce the strain on your AC system as much as possible, and reduce your own soaring electricity bill, here are a couple of pointers you will want to keep in mind:


  • Increase your thermostat to as high as you can bear.  72 degrees may feel nice most days, but it's a guarantee for an air conditioner to be running non-stop under extreme conditions in hot weather.  News anchors, the weather service, home inspectors, and other professionals often recommend making the shift to 78 degrees in extremely hot weather - personally, if you can handle it, I would advise going into the low 80's.  You *will* see the difference on the electricity bill, and your AC unit will thank you for the breathing room you give it.
  • If you have blinds/shades, use them.  This is one of those 'form over function' moments for your window treatments, and it goes beyond privacy.  The more sunlight you can prevent from getting into your home on days like these, the less work your air conditioning will need to do in order to cool down the home.  The light hitting your floors, counters, furniture, etc. is creating multiple heat-emitting objects inside of your residence - objects that work against your cool home goals when it is over 100 degrees outside.
  • If you have lights turned on that you are not using, turn them off.  The majority of incandescent lightbulbs in our homes are extraordinarily inefficient, and release most of the energy they consume as heat rather than light.  There's a reason that an Easy Bake Oven can bake food with just a single bulb!
  • Make sure that the air filter is changed regularly and unobstructed.  Yes, air filters do help your own air quality, but their primary purpose is to keep clean airflow getting to your air handler unit.  A dirty filter might cause your system to work harder to get the air it needs, and I have had clients before whose HVAC systems have failed in part due to overly dirty air filters.  Is that really what you want to risk in heat like this?  Not to mention, it will help to extend the life and efficiency of your HVAC system.

Going forward, when time and temperatures allow, remember also to check the condition of your roof/attic to ensure proper ventilation and insulation.  These can have an incredible effect on the overall efficiency of your home, relating to both cooling and heating.  I will not necessarily recommend that people take on the expense of a home energy audit, but things like checking yourself to see if windows are properly sealed, doors are likewise weather sealed, and vents are flush with ductwork and drywall can go a long way towards facilitating an efficient HVAC system.

Stay inside, and stay cool!

Future of Conforming Loan Limits
Tuesday, 19 July 2011 19:49

For the last several years, DC and other high-cost areas of the country have enjoyed the benefit of larger federal conforming loan limits, set in response to the freeze in private lending which took hold at the heights of the financial crises.  Come October 1, 2011, those higher loan limits are set to drop down a notch, from $729,750 to $625,500.  You might be wondering... "What does this mean for the market, and more importantly, for my home buying efforts in the DC & Northern VA areas?" Depending on the specific situation, it may not mean much at all.  But for some others, it could be the difference between a home being within reach and a home being well beyond it.

So what are conforming loan limits?

The first thing to understand, is that the majority of home loans originated by the lending institutions in this country are ultimately packaged and sold off to second, third, fourth parties...  Read: your lender likely won't be holding on to that loan of yours for very long.  By adhering to the loan limit standards enforced by Fannie Mae and Freddie Mac, these lenders are able to sell the loans almost immediately into the secondary market, freeing up capital for new transactions, and most importantly in their eyes, freeing themselves from risk.  The lower risk inherent in these loans has generally led interest rates for conforming loans to be lower - often considerably so - relative to their non-conforming cousins.  In addition to their rate benefits, the higher conforming limits in high-cost areas allow buyers using an FHA loan product to afford one of these more expensive properties, while still only requiring 3.5% as a down payment.  It is this last group of people in particular that would find themselves most greatly effected, essentially capping their maximum home purchase price in our area to $625,000 in cash constrained situations, regardless of credit or income.  To be sure, there are plenty of young professionals around here, recently married or looking to start a family, which fall under this umbrella.

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