This week we have been hearing the buzz in the news about the government plan to bring interest rates down to 4.5% in order to prompt home buying and ease the housing crisis.  Does this mean that you should take advantage of the new rates and buy that new home?  The Wall Street Journal discusses the pros and cons of buying a new home with the lower rates.

While the drop in interest rates will translate to a major reduction in your monthly mortgage payment, it may not make sense for you at this time to use this reduction to buy up into a larger home.  Homeowners need to be careful that they do not use the rate reduction as an excuse to buy more home than they can actually afford.  Instead it may be smarter to downsize into a more affordable home with lower payments, particularly if you are unsure about your job security.

The Central Virginia real estate market offers many opportunities to downsize and take advantage of the lowering interest rates.  In addition to lower payments a smaller home will also offer reduced energy and maintenence costs.  If you would like to explore how this option might work for you,  give me a call and we can look together at what Charlottesville area homes are available that could suit your needs and lower your expenses at the same time. 

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Fannie Mae and Freddie Mac have given overextended borrowers a Thanksgiving present.  The mortgage giants have temporarily suspended foreclosures through January of 2009.  They have directed their loan servicing organizations and attorneys to suspend foreclosure sales and evictions on occupied single family homes.  This has been implemented as support of the modification program which was announced on November 11 and is due to begin on December 15.

Inman News has published an article going into more detail on these new developments.  According to the article "Fannie’s streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure."

This new development should offer a chance for many borrowers to keep their homes and avoid foreclosure.  According to Inman Freddie Mac expects to approve workouts on 84,000 or an estimated 140,000 who are delinquent on Freddie Mac owned mortgages.

To read the article click here.

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When you are starting your home home buying experience, your REALTOR will be speaking about prequalification, preapproval and loan approval.  You will be encouraged to speak with a mortgage professional to make sure that you will be able to obtain a loan and also to find out an estimate of the amount of the loan that you will qualify for.  This is a crucial step in determining how much home you will be able to afford.  It is heartbreaking to find your dream home only to learn that it is outside of your budget. 

I always recommend to my clients that they speak with several different lenders; since different companies will offer different programs.  It is important to find not only the best loan for your needs and budget, but also the mortgage officer that you are comfortable with.  But when you have obtained your good faith estimates from several lenders, how do you compare them?  Jeff Belonger – Infinity Home Mortgage Company has written an excellent post clearly explaining the basics of the good faith estimate.

If you have any questions about buying or selling a Charlottesville home, or the Charlottesville, Virginia real estate market give me a call; I am always happy to speak with you.

Contact

, e-PRO, SRES, NHD, REALTOR®, Real Estate III, Charlottesville, Virginia at 434 960-0161, pam@JumpintoGreenerPastures.com, to list your property for sale or to buy a property in the following areas in Central Virginia: Charlottesville, Albemarle County, Keswick, Glenmore, Ivy, Crozet, Earlysville, Free Union, Cismont, Scottsville, Fluvanna County, Troy, Palmyra, Lake Monticello, Louisa County, Louisa, Mineral, Spring Creek, Orange County, Gordonsville, Orange, Barboursville, Greene County, Ruckersville.

To view all of the Charlottesville, Virginia and Central Virginia Homes for Sale click here and click on the mls search button.

Visit my website Jump into Greener Pastures or read my blogs Charlottesville Real Estate Talk and Charlottesville Horse Farms and Country Homes.

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