Loan Industry Snapshot

As part of the federal economic stimulus package, lawmakers agreed to boost Fannie Mae and Freddie Mac's conforming loan limit to $729,750 from $417,000 in such high-cost housing markets as New York City, New England and Florida until the end of the year. The bill imposed the same limit on a permanent basis for the Federal Housing Administration mortgage program, a rise from $367,000. It will also allow the agency to refinance a larger pool of borrowers into fixed-rate mortgages and earmarked $500 million for counseling of struggling borrowers.

The housing industry applauded the increase in the conforming loan limit, insisting that it will bolster demand and decrease inventory in some markets as well as permit sellers to unload their current homes and move up to more expensive dwellings. However, there are concerns about the added credit risks for Fannie Mae and Freddie Mac--especially since the bill was not accompanied by tighter regulation--and some lawmakers worry that it will be difficult to end the temporary increase without pushing down home prices.

The New Boom In Refinancing

With 30-year mortgage rates falling under 6 percent for the first time in about three years, homeowners are seeking to refinance in droves. There are reports that refinancing at the current rate would offer savings to 37 percent of homeowners, and the percentage likely will rise if the weakening economy drives down mortgage rates even further in the coming weeks.

Mortgage demand hit a four-year high during the week ended Jan. 11, with approximately 67 percent of applications classified as refinances, according to the Mortgage Bankers Association. However, it remains to be seen how many of these applications are turned away, as experts say the only beneficiaries of this refinancing boom will be borrowers with conforming loans (417,000 or less), good credit and plenty of equity.

Borrowers with jumbo loans are not seeing any rate drops, and those with poor credit or properties that have depreciated in value simply do not qualify under today's stricter underwriting standards. The best rates are being offered to borrowers with more than 30-percent equity and credit scores topping 679.

Changing a Brick Fireplace

What does one do to upgrade his/her brick fireplace? Recently, my husband and I decided we have looked at our brick fireplace long enough. When we pondered this fireplace remodel our thoughts went from going green and save the brick to yuck who wants a painted fireplace?

Please do not get me wrong, being sensitive to the environment and “going green” is a good idea. If we saved the brick, all we would need is a gallon of paint, new mantel, a few hours and we could ultimately call it a day. However, would this simple process bring both added value and enjoyment? Our goal was to improve our family room with a stunning fireplace and painting just didn’t seem the right choice.

Instead of looking at red brick, we would then be looking at white brick or whatever color we chose to paint it. When we tire of the paint, does this mean we would need to remove the paint to restore it back to the brick fireplace it once was? I have done enough home repair to know that taking paint off of brick would be a tedious, miserable and difficult job. Huge amounts of time, patience and elbow grease would be needed. So, what are some other choices?

We could cover the brick with tile, slate, marble or travertine. Great, let’s do that. Before we begin we discover that the mantel we purchased doesn’t fit our space when keeping the brick. The mantel sticks out about two inches. Not a problem, just fill in the back with a piece of wood that maybe matches the mantel. Hmmm easier said than done. No, that will never do. The brick must go.

Our final conclusion is to remove the brick ever so carefully and then see where we can reuse it somewhere else at our home or give it away to someone who needs red brick. I will keep all of you posted on this one.

Putting Your Best Façade Forward

We’ve all heard the saying “don’t judge a book by its cover”. Well, this does not always hold true in home buying, where many buyers purchase a house based on its curb appeal.

If you were thinking about upgrading the exterior of your home, you would do well to focus on exterior remodels according to the 2007 Cost vs Value Report. This report comes from Realtors who provide their insight into resale data for Remodeling Magazine report.

In 2007, upscale siding replacement was the most profitable project on a national level, recouping an average 88 percent of costs upon resale. Here on the Pacific coast it was 64 percent recoup. Wood deck additions and wood window replacements returned 85 and 81 percent of costs, nationally and 108 and 103 percent respectively in northern California.

The Cost vs. Value Report compares construction costs with resale values for 29 midrange-upscale remodeling projects in 60 markets across the country. This is a valuable resource to check out—particularly if you plan to be a Seller in 2008.