Financial Page The current interest rate in the metor area for a 30 year fixed conventional loan is 6.25 If you can pay cash for your home, skip this page... If you need a mortgage check out our endorsed mortgage lenders below. You can get a mortgage designed for your needs. The good news is that today almost anyone can find program that will allow them to become a homeowner. Today's mortgages have many features that require you to get an experts opinion of your needs.We recommend as realtors that you find a mortgage broker that you can feel comfortable with. Remember, it is not just the rate that counts, but service is equally important. The Real Estate market is hot! Low interest rates, a healthy economy, high investment profits, and realistic pricing have spawned a strong Real Estate market in the Bethesda/Rockville/ Potomac/ Wheaton areas. One high tech pesonnel recruiter indicated that there are over 16,000 new high-tech high paying jobs available in the metro area. In addition, young couples that bought affordable homes in the suburbs during the past ten years are looking inward now, trading living space for better commute times.

The spring market actually arrived in January..... The inventori of homes in this area has shrunk to an incredibly low level and homes that have been on the market for a long time have sold. We are seeing multiple offers on homes and the time on the market is less than half of what it was at this time last year.

Since 1989 we have been in a buyer's market with last year being somewhat neutral. As a result during that time, prices of midrange level ($250,000 to $450,000) homes have eroded between 8% and 13%.

Although buyers should expect to see slightly higher prices this year, it should not deter them from purchasing. Low interest rates still make home buying very affordable. Buyers should also be ready to make reasonable offers on a home they want, realizing that if it is a good house at a good price, it will not last long.

Sellers looking at the competitive market analysis (CMA) of similar homes sold in their neighborhood will be pricing at the higher end of the analysis.

For more information on Buying or Selling a Home, click on Ted's real estate library.

Private Mortgage Insurance

PMI (private mortgage insurance) is an instrument to protect the lender from default or foreclosure. It is a premium paid by the borrower when his principal loan is more than 80% of the value or price of a property. In the past the consumer had paid this insurance needlessly or has had difficulty canceling the insurance resulting in million's of dollars of unneeded expense.

Last year congress passed the Homeowner's Protection Act to address this problem

The following are a few examples of the abuse.

If a new appraisal was favorable to the homeowner and showed that the equity in the home was greater than 20%, the lender refused to accept it, requiring the homeowner to wage a legal case for justice.

In some cases, loan documents simply prohibited canceling PMI ever! As a result, payments for PMI have been draining many homeowners long after they were no longer necessary to protect lenders.

Lender's made it difficult for the borrower to obtain the procedures to cancel or inform the borrower of its status

That's why Congress came to the rescue.

The new law will allow you to make a written request for cancellation of your mortgage insurance once you pay your mortgage balance down below 80% of the original value (the lesser of the contract sales price or the appraised value) of the property.

If vour home mortgage is subject to PMI, you will get an annual disclosure that advises you that your PMI may be canceled under certain circumstances and where to write for more information. This is the borrower cancellation procedure.

If you do nothing, mortgage lenders and servicers the people to whom you send payments, even if the loan is owned by someone else) will have to automatically cancel your mortgage insurance once you have paid the loan down below 78% of the original value.
This is the automatic cancellation feature.

There are still conditions

(1) The automatic cancellation provisions do not apply to existing mortgages.

(2) For a borrower cancellation, you cannot have a subordinate lien, an equity line of credit other second mortgage),

(3) There must be evidence that the value of the property has not declined below its original value, and must have a "good payment history" (no payments more than 30 days late within 12 months or more than 60 days late within 24 months).

(4) FHA mortgage insurance is not covered by the cancellation rules.

(5) Certain "high risk" loans don't qualify for either borrower or automatic termination, while others are subject to a 77% threshold for automatic cancellation.

On the positive side, the law permits you to satisfy the 80% and 78% thresholds by including extra principal payments you may have made (rather than just relying on the scheduled amortization schedule).

If you are a homeowner with an old mortgage not covered by the new law, or in a situation where your home appreciates enough to give you 20% or greater equity, you may still be able to convince your lender to drop the PMI if you get an appraisal to back up your claim. Lenders are somewhat more sensitive now on this issue.

Rather than hassling with your lender, a better solution, especially for homeowners with old, higher-rate loans, may simply be to seek a new loan with lower rates and no PMI.

As for new borrowers who would be eligible for the PMI cancellation provisions of the new law, they should stop a moment and consider the following question before signing on to a loan with PMI:

Why pay PMI at all?

There are numerous alternatives to PMI, such as 80-1 0-1 0 or 75-15-1 0 loans that replace PMI payments (which are not tax deductible) with deductible interest, generally at a lower total cost than with a PMI loan, even before the tax benefits are factored in. Choose one of these and you will have no reason to concern yourself with how to cancel PMI!