February 24, 2009 Newsletter

The government appears serious about trying to stimulate the purchase market by offering $8000.00 tax credit incentive for first time home buyers. A first time home buyer as defined in the bill is anyone who has not OWNED a home for the last three years, so if an individual previously owned, but has been renting without buying for more than three years, they qualify. The other improvement over last years’ incentive is, as long as you remain in the property for three years, the tax credit does not have to be paid back. Last year’s $7500.00 tax credit came back to the government in $500.00 chunks over 15 years.

The government has pledged 75-80 billion to help almost 9,000,000 households retain their home through refinancing their loans, even if they owe more than the property is worth. Part of the rhetoric dispensed seems to indicate interest rates for these at risk borrowers to go even lower than current market rates. Depending on how low the interest rate afforded these at risk homeowners goes, it will be interesting to see how that impacts loan interest rates to those who are not at risk of foreclosure.

Speaking of rates, current rates as of February 24, 2009 are floating right around 5.00% . As we have said here before, the rates are very fluid right now and are moving in a range between 5.0 and 5.375 for conforming thirty year fixed loans. Again we have advised that if you have any thought of refinancing, get in the queue NOW. As rates keep moving if you are at least in the process, you will be in a position to lock as a rate favorable to your situation presents itself. Timing the interest rate market is like trying to time the stock market, even the experts aren’t sure where rates will go. Move now to get an incredible rate. If the rate drops even more, the opportunity to refinance again exists. The old axiom of needing to see a 2.00 drop to justify a refinance just doesn’t make sense today.

Colony Title Associates welcomes Village Settlements as a partner in our network of title companies. Village, headed by four well respected real estate attorneys is based in Gaithersburg, with offices in Frederick and Greenbelt. They are licensed in D.C., West Virginia and Pennsylvania, allowing us to expand the areas we can cover for our clients. If you have need for a closing in these areas, please let us know.

As always, we want to be your title company and law firm. Call us at 410 884 1160 x3007 or email me at tee.tillman@colonytitle.com.