Last week the Senate and the House agreed to an Economic Stimulus package and are sending it to the President for signatures immediately. Part of the stimulus package includes an increase in the Fannie Mae and Freddie Mac loan limits which are currently at 417K.

What this means is it will now likely be cheaper to get a mortgage for homes up to about 700K. The exact workings of this program have not been finalized, but this should stimulate markets like DC where most of the homes are above $417,000.

What should you do? Watch the news, speak with your lender, and consider refinancing if your loan is above 417K. If you’re in the market to buy, this should significantly help affordability this spring.

If you’re one of the lucky ones to receive a rebate check, here are 10 tips for homebuyers during these tough economic times – and how to use your rebate check to maximize your home buying opportunities:

1. Spend the money on a quality home inspection – most inspections run $250-$550. You want to make sure you’re not buying someone else’s problems!
2. Buy down your interest rate and make the home even more affordable! In some cases you can use a few hundred dollars (depending on the loan amount) to discount your interest rate.
3. Valuation of property in today’s market is extremely important. Use your rebate check to buy an extra appraisal – to make sure your contract price is not overly inflated.
4. Is your rent rising faster than you can calculate? Use some of that rebate to break your lease and buy sooner. Many sellers will even help you pay the fee associated with breaking your lease to get you to move on their home!
5. The difference between a short term adjustable rate mortgage and a 30 year fixed mortgage can be only a few hundred dollars. Use your rebate money to give you an extra cushion for the first few months until you get used to your new monthly mortgage payment.
6. Carrying a small balance on your Macys card you just haven’t paid off? Even small balances on cards can impact your credit score – which increases your monthly payment. Pay off those small balances now!
7. Buy a home warranty when you settle on your new home. For about $500 you can buy a 1 year home warranty which will protect most of the systems in your home.
8. Buy a one year termite warranty. Termites are aggressive – and can damage your home’s structure quickly. If the home currently does not have termites, the one year termite warranty is only about $50.
9. Now that you’ve bought a home – use your rebate money to sit down with an estate planning attorney to make sure your will is updated and your assets are protected.
10. About $500 will buy you a complete financial analysis from a certified financial planner. Now that you’re a homeowner, it is time to make sure the rest of your financial house is in order. Speak with a professional – let them create a plan for you.