My Blog

Fed Cut is Good News for Those Who Act Fast

Yesterday the Fed announced its second consecutive decrease in rates, cutting another 0.25% from the Fed Funds Rate. This change could directly impact millions of American borrowers.

Are you one of them?

Adjustable Rate Mortgages
If you currently have an ARM that is scheduled to reset in the next 14 months, then today's news is good for you. Now is the time to investigate your options. Even if you have a pre-payment penalty or you're behind in your payments, don't delay. There may still be options available to get you out of your ARM and into a mortgage you can afford, including FHA or the new FHASecure program introduced by the President.

Important: The FOMC does not meet in November, so ask yourself this: Can you really afford to roll the dice until its next meeting in mid-December?

Buying at the Bottom of the Market
If you're looking to invest in real estate in the next six to twelve months, and recent rate cuts have inspired you to start taking action, now is the time to prepare yourself for intense credit scrutiny. There are a lot of great real estate deals to be had today. But if your credit doesn't stand up in today's tight-fisted credit environment, then you could easily miss out on an exceptional opportunity.

What's the point of taking advantage of discounted home prices if you can't qualify for the right mortgage or interest rate that makes it all worthwhile? Get pre-approved now and know exactly what you can afford. And with the right REALTOR® on your side, you can have incredible negotiating power in a buyers' market!

Refinancing – Know Your Options
While rate cuts often spark ideas of refinancing, this may not be the best choice for everyone. In some cases – especially in a market where home values are declining – refinancing may be impossible or disadvantageous. Call me today for a free mortgage review. Based on your individual goals and financial needs, we can explore every available option for you and your family.

2008 Conforming Loan Limit Remains at $417,000

Fannie Mae and Freddie Mac have just announced that conforming loan limits for 2008 will remain at the 2007 level. The good news, however, is that mortgage interest rates have remained favorable as well. Combine this with lower home prices and an increase in inventory in many neighborhoods, and today’s real estate market presents a variety of great long-term opportunities. Entire neighborhoods that you may not have been able to afford in 2005 could now be open to you!

I have included a copy of Fannie Mae’s press release below, in case you would like to review it.

Fannie Mae's 2008 Conforming Loan Limit Remains at $417,000 Following OFHEO Announcement

WASHINGTON, DC -- Fannie Mae (FNM/NYSE) today announced that its 2008 conforming loan limits would remain at the limits set in 2006 and 2007, as determined by the Office of Federal Housing Enterprise Oversight (OFHEO). OFHEO's full announcement can be found at www.OFHEO.gov.

Limits for single-family mortgages purchased by Fannie Mae will remain at the 2006 and 2007 level of $417,000 for one-unit properties for most of the U.S. Limits for multi-unit loans for 2008 will be as follows: two-family loans $533,850, three-family loans $645,300, and four-family loans $801,950. The 2008 loan limit for second mortgages will be $208,500.

The maximum amounts for one-to-four-family mortgages and second mortgages in Alaska, Hawaii, Guam and the U.S. Virgin Islands are 50 percent higher than the limits for the rest of the country.

Fannie Mae is a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to ensure that mortgage bankers and other lenders have enough funds to lend to home buyers at low rates. Our job is to help those who house America.

Ten Ways to Lower Your Tax Bill

It's only November, and preparing your taxes is the last thing on your mind, right? Well, what if we told you there are several steps you can take right now that will help you avoid the April tax scramble and save thousands of dollars in the process. For the best of these tax-saving strategies, YOU turned to our good friends at Kiplinger's Personal Finance magazine to make it even easier.

1. Don't Buy a Tax Bill. If you're thinking of purchasing mutual funds between now and the end of the year, think twice – you might end up owing Uncle Sam.

2. Beware of the AMT. Should you accelerate deductions to cut taxes? It depends – you could end up with a bigger tax bill.

3. Donate Appreciated Assets. Giving stocks or mutual fund shares instead of cash to charity will let you score a deduction and avoid a capital gains tax bill.

4. Winning With Losers. Look on the bright side: Selling a losing asset at this time of year can be a great way to rebalance your portfolio and save on taxes.

5. Understanding the Gift Tax. If you don't use your $12,000 annual exclusion by December 31, you lose it.

6. Why Your Kids Need a Roth IRA. Looking for the perfect gift for your children? Open a Roth for them, and start them on the road to retirement security.

7. Lower Your Taxes by Thinking Green. Outfitting your home with new storm doors and windows or buying a gas-efficient hybrid car can help you score tax credits.

8. Max Out Your Retirement Savings. For most people, the best way to cut your tax bill today is to maximize your retirement savings for tomorrow.

9. Time for an IRA Distribution? The law requires you to begin taking money out of traditional IRAs or face a penalty. But a new temporary provision allows you to direct your IRA distributions to a charity tax-free.

10. Trim Taxes with Flex Accounts. If you typically under-fund your flexible spending account – or skip participating altogether because of concerns about the use-it-or-lose-it rule – fear no more.

By Mary Beth Franklin
Reprinted with permission. All Contents © 2007 The Kiplinger Washington Editors