January 7, 2009 Newsletter

The market for mortgages is starting to heat up. Many of you have called and asked where can I get the 4.5% fixed rate loan. Good question. The market is very fluid and rates are moving up and down every day, so there is no easy answer to that question. What is true, is that because of the market conditions, rates have dropped significantly, so the range for rates today is between 5.25% and 5.0 %. There were some lenders quoting 4.75%, 4.875%, etc. These rates are a function of broker fees and admin fees as well as points. While I have generally advised against paying points, the market right now may make sense to pay 1/4 or ½ point to reduce your rate significantly. If you are unsure, please call us and we can walk you through the scenario. Jumbo money has not yet dropped to these levels, but as the market finds its comfort level, jumbos may follow the trend. The best advice is to start your application now if you are planning on refinancing or buying, so you are in the queue.

If you have an adjustable rate loan, look at your current rate and look at what index the adjustment is tied to. The index is the rate that fluctuates with the market (i.e. the one year treasury bill, LIBOR, etc.) and the margin is the fixed amount added to the index to determine your new rate. It may be that with the index low enough and the margin low, that if your rate adjusts this year it may go down. You may still want to refi to get into a fixed 30 year product, but look at all the factors first.

While you are facing financial planning, pull out your will and power of attorney and health care directive. If your will is more than ten years old it may be time to review and revise. Our attorneys handle will preparation and we can help you look to the future. Federal Estate Tax guidelines are high right now, but have not been determined for 2011 and beyond. If you don’t have these documents, now is a good time to prepare for the future. We can send you a will questionnaire which will help you organize your thoughts and needs.

As always, we want to be your title company and law firm. Call 410-884-1160 x3007 or email me at tee.tillman@colonytitle.com. For info on reverse mortgages, 1031 exchanges, FSBOs, foreclosures, short sales and other information go to our web site. Previous newsletters archived there have touched on these topics and more.