Contact real estate writer Alan J. Heavens at 215-854-2472 or aheavens@phillynews.com.

By Dina ElBoghdady
Washington Post Staff Writer
Thursday, October 29, 2009

The Senate has reached a broad bipartisan consensus on extending a lucrative tax credit for first-time home buyers beyond the Nov. 30 deadline and expanding it to include some current homeowners, according to the Senate’s Democratic leader.

Under the plan, people buying their first home would receive an $8,000 tax credit if they sign a contract by April 30 and close on it by June 30, according to people familiar with the proposal who spoke on the condition of anonymity because the timing had not been finalized. Homeowners shopping for a new primary residence would be eligible for a $6,500 tax credit if they owned their home for five consecutive years in the previous eight.

In both cases, individuals who earn more than $125,000 annually and couples who earn more than $250,000 would not be eligible, the office of Senate Majority Leader Harry M. Reid (D-Nev.) said on Wednesday.

Reid and other supporters of the tax credit hope to attach their proposal to an unemployment benefits bill that may reach the Senate floor this week if lingering issues are resolved about whether to also include two unrelated Republican amendments. “We do expect this tax credit plan to be considered as a part of the unemployment bill at some point,” said Regan Lachapelle, a spokeswoman for Reid.

The proposal is the latest of several regarding the tax credit that have been floated in recent days. Reid and others have been trying to cobble together a plan that would appeal to fiscal conservatives who have balked at the cost of the tax refund program and want it to lapse by the end of next month, as scheduled.

On Wednesday, Senate Minority Leader Mitch McConnell (R-Ky.) said there is wide backing for the latest plan among Republicans, saying that “most members” support it and the underlying unemployment measure. But Don Stewart, his spokesman, warned that nothing is a done deal. “Everything is fluid” until there is unanimous agreement on what will reach the Senate floor, Stewart said.

The tax credit was enacted early last year to help jump-start the housing market. Real estate industry officials say it has helped boost sales and clear out a glut of lower-priced homes, including foreclosures, which have helped drag down home prices.

But the program’s staunchest critics, including some economists, argue that most of the people who received the tax credit would have bought homes anyway.

For the past several years the standard jumbo rates (417K and up) in the greater Roanoke VA area has been very high in comparison to loans under the jumbo limit.  What I have seen for the past few years has been about 1.5%-2% higher than a standard rate, so if the rates are at 5% on most programs you would see a jumbo at 6.5%-7%.  Lately I have seen the rates stagnate between 5%-5.5% for most programs.  We are starting to see jumbo pricing improve i have seen the spread narrow to .5%-.75% higher than standard rate.  Last week I was able to price one out at 5.875% this is a great opportunity for those who are buying above the jumbo limit.  High end real esate is priced well below where it was and with very attractive rates with better jumbo pricing.

Interest Rates
When is the Best Time to Lock?

When it comes to mortgage loans and interest rates, it’s never a good idea to gamble. That’s why I typically advise my clients to lock in an interest rate at the earliest opportunity. This is just one step of the standardized system we have put in place to ensure the best possible loan experience for each borrower that we work with.

A mortgage loan cannot be closed without a locked-in rate, and there are three main elements to take into consideration:

• Interest Rate
• Points or fees
• Length of the lock

Locking in a rate does not obligate the borrower to commit to the loan until the loan is actually closed. The lock is merely a security measure designed to eliminate the risk of market volatility throughout the duration of the purchase or refinance transaction. Our standard procedure is to lock in a rate as quickly as possible. My team and I want our clients to know that while interest rates fluctuate daily, most lenders do not want to lose any business because of it. If a significant rally causes interest rates to drop 0.25% or more, we know that we can most likely renegotiate the rate.

By knowing our clients’ needs and working intimately with them to make the right decisions early on, my team and I are proud to say that we have helped them to achieve their home ownership dreams.

Please feel free to contact me by phone at 540.986.0270, ext. 325, or via email at jasonbialek@atlanticbay.com.

Sincerely,

Jason Bialek

Sr. Mortgage Banker

ENHANCEMENT OF REGULAR REFINANCING LOANS: Section 504 of PublicLaw 110-389 made changes to VA’s regular (“cash-out”) refinancing loans. Effectiveimmediately, the maximum guaranty amount for regular refinancing loans is the same as themaximum guaranty amount for purchase loans. Regular refinancing loans are now available forup to 100 percent of the appraised value of a home, which is an increase from VA’s previous threshold of 90 percent. All other VA program requirements for regular refinancing loans
remain the same.