Credit scores have always been important, no matter what a person was buying. They are more important now than ever; especially to someone considering a home purchase.
A recent study has shown that most people do not understand how credit scores are determined or how they affect them.
Credit Scores can save you money or cost you money. High credit scores can earn lower interest rates on some purchases while low credit scores may raise your interest rate dramatically or have the purchased denied.
It is no secret that the mortgage industry has tighten their lending guidelines considerably and credit scores will affect your ability to purchase more now than ever. However, your credit score is not the only factor a lender looks at when you apply for a mortgage loan.
Factors:
Documentation: It is very important that you keep good financial records. Credit reports are not always correct. Be sure to keep receipts and documentation. You will need copies of at least two year's income tax records when applying for a mortgage loan.
Credit Scores: A credit score is more than just a payment history that affects about 35% of your total score. Your debt ratio also contributes highly to your total score by about 30%. Recent purchases also affect your total score (10%). The length of time of you have had credit is another factor (15%). Miscellaneous factors make up the final 10%. Credit scores range from 300 - 850. Most people fall in the 620 - 700 category. Those with credit scores of 700 and higher are considered to be strong borrowers, while anyone below 600 is considered to be a high risk borrower.
Debt-to-Income ratios: Mortgage lenders also take into consideration how much debt you owe in relation to how much you earn (gross earnings). This is called font-end ratios (house payment/gross income) and back-end ratios (other debt/gross income).
Risk-Based Financing: Although risk-based (paying certain fees or higher interest rates depending on your credit score) financing is nothing new, risk-based financing is not a new thing to the mortgage industry either. However, it is a new thing for FHA, Fannie Mae and Freddie Mac. FHA has recently implemented a new policy in which the mortgage insurance premium, paid by a borrower, is determined by their credit score. Beginning November 2009, Fannie Mae and Freddie Mac will be basing their loan fees on credit scores and loan-to-value ratios.
If you are considering a home purchase, it would be wise for you to consult with a lender as soon as possible. A skilled mortgage professional will be able to determine how current guidelines and the new risk-based pricing will affect your purchasing power as well as which loan product would be most advantageous to you.
Every borrower's situation is different. Do not make the mistake of assuming you can or cannot purchase a home.
Those words describe the trails of Anchorage. The City of Anchorage has 10,946 acres of dedicated green space which includes over 290 miles of trails and greenbelts.
Anchorage citizens count their award-winning trail system as the city's best asset in regard to recreation.
I think the love of the outdoors and the beauty that only Alaska can provide are the foremost reasons why many have chosen to make Alaska their home state.
The trails of Anchorage allow visitors and residents alike to enjoy wildlife and nature amid scenic splendor. Our trails wind through the city's urban core, along the coastline and even extend up through the foothills of Chugach State Park.
Many of Anchorage's trails offer stunning views of the coast, ocean and mountains. Several are multi-use trails which range from walking and roller blading to dog mushing and skiing. Whether you enjoy running, hiking, biking or horseback riding, there is a trail for you.
The trails provide one of the best ways to experience the beauty of the wildflowers as well as the wildlife. You can take a leisurely stroll or go on an all day hike to the wilderness' edge at the Chugach State Park.
If you have not yet taken advantage of our trail system, you have missed one of the best parts of our city. I would like to highlight just a few of our many trails
Chugach State Park offers several hiking trails. The wildlife offers many "Kodak moments" and the views are breath-taking.
Tony Knowles Coastal Trail is the most popular trail in the city, especially for bikers. The trail follows 11 miles of coastline. You can see Beluga whales, moose and beautiful wildflowers. Some of the scenic views to be enjoyed include the Port of Anchorage, Cook Inlet and magnificent mountain ranges. This trail becomes more remote as you travel south and joins several parks. If that is not enough to draw you, then maybe close encounters with jets will. The trail also skirts the Anchorage International Airport.
Campbell Creek Trail is a wonder for viewing our wildlife and experiencing salmon fishing. You may meet a brown bear or a moose or you may see a coyote or a lynx. So, be sure to be "wildlife wise" when experiencing this trail and others in and around Anchorage. You can also visit the Campbell Creek Science center and enjoy many varieties of waterfowl at Taku Lake. If you like quaint wooden bridges, this is the trail for you.
I hope I have made you green with envy and planted a seed of desire to see and experience Anchorage and all of its magnificent trails. Just don't be surprised if you find you don't want to go home. You just may want to make Alaska real estate your dream home.
To learn more about Anchorage Trails
Anchorage Parks & Trails
Anchorage Trail System
Anchorage Area Hiking
Alaska Hike
Anchorage Running Club
Iditarod Official Site
Iditarod National Historic Trail
Current loan limits for an FHA insured mortgage are 115% of an area's median home price, not to exceed $625,500. When the new Housing Bill takes effect, this loan limit will become permanent.
Fannie Mae and Freddie Mac loan limits will remain at $417,000 for this year. In 2009, the loan limits will reflect those of FHA with an increase in higher-cost areas to 115% of the area's median home price.
It is important that you note the loan limits are based on an area's median home price, which means that loan limits will be determined by locale. FHA will not insure any mortgage for more than $625,500 no matter what area the property is located in. Loan limits for Fannie Mae and Freddie Mac will range from $417,000 to $625,500 depending on area.
For Anchorage, Alaska, the loan limit is and will remain at $347,000 for a single family home. A single family home is defined as a home designed to house one family. This definition includes condos and town-homes.
FHA will allow a buyer to purchase a multi-unit home (up to four units) as long as the homeowner occupies one of the units. Loan limits for these properties are higher than those for single family defined homes.
Since Fannie Mae and Freddie Mac seem to be reflecting the FHA loan limits, it is safe to say that the loan limits for Anchorage will be the same as FHA ($347,000).
This does not mean that a buyer will not be able to finance a home that is selling for more than $347,000. The loan limit is not the sales price, but the amount the buyer is financing. The price of the home would be determined by the amount of the loan and the addition of a buyer's down payment. Buyers can also apply for a "jumbo" loan if the loan amount exceeds the loan limit for the area. Jumbo loans have different guidelines, so you would need to consult with a mortgage lender who deals in these types of loans.
Contact an FHA approved lender to learn about FHA guidelines and for pre-approval.
Related Articles: FHA Best Bet and FHA Raises Loan Limits
Make the decision early on that, when you find your Alaskan dream home, you will hire the services of a home inspector. Although it is natural for a buyer to want to keep expenses to a minimum, waiving the right to a home inspection is not a wise choice.
A home inspector will make a visual inspection of the home, examining structure and home systems to determine if they are sound and working properly. It is best that you are present at the time of the inspection so the inspector may address any questions or particular concerns you may have.
Every home has problems; even brand new ones. Every problem has a solution but home inspections are not "fix-it" lists. They are designed to reassure you (not scare you) regarding the condition and value of the home that you are purchasing.
Home inspectors cannot determine when systems are going to fail. They can only determine the condition of the various system components at the time of the inspection.
A buyer will be provided a written report within a day or two of the inspection (some inspectors include pictures with their reports). The report will let you know what was inspected and what the findings for each item were. If a problem has been identified, the inspector will make a recommendation for further evaluation or recommend what needs to be done to remedy the problem. If an item is identified as unsafe, unsound, or not performing correctly, you will have the opportunity to address the issue with the seller before closing escrow.
A home inspector is not an appraiser and cannot determine the value
of the home. Home inspectors are not code inspectors. Home inspectors do look for safety issues but, if you are concerned about a home's compliance with local building codes, that is another matter entirely. You need to let your Realtor know what your concerns are so that they may advise you on the options available to you for further investigation.
When determining which home inspection company you will use, ask to see a sample copy of an inspection report. Remember that quality is more important than quantity. Let the report determine who you want to use, not how much the cost of the report is.
Alaskan home inspectors are required to be licensed in the State of Alaska.
FHA allows buyers with scores below 700 to purchase homes. In the current mortgage credit crunch, FHA may be the best bet for first-time home buyers. First-time home buyers are defined as anyone who has not owned a personal residence in the last three years.
Another factor making FHA a viable choice in mortgage loans is that FHA has temporarily raised its loan limits. (FHA Raises Loan Limits).
IndyMac, one of the home lending giants for non-perfect credit borrowers, has gone out of the mortgage lending business, limiting mortgage borrowers' options.
Your credit score is more important than ever when applying for a mortgage loan. Lenders look at your credit score as an indicator of your creditworthiness. Based on your credit score, lenders determine the risk of you becoming a foreclosure statistic.
Your credit score is based on your history in repaying your bills in a consistent and timely manner. Your income level, age, martial status, etc. do not influence how your score is determined. The only factor is your repayment history.
Prime borrowers have credit scores of 700 or higher and normally will have no trouble securing a mortgage loan. Sub-Prime borrowers are those that have scores below 660.
FHA's goal is to help Americans achieve homeownership. They are not in the business of making risky loans but will not deny a loan strictly because the borrower does not have A-1 credit.
Never assume you cannot qualify for a mortgage loan. There are still many loan programs available but, in terms of interest rates, most come with a price tag. FHA loan interest rates are some of the lowest a borrower can obtain.
If you are considering purchasing a home in Anchorage, FHA may be your best bet. However, to really know what your purchasing power is and which loan program is best for you, contact a good mortgage broker.
The change in FHA's loan limits can help you to achieve the American Dream, homeownership.
As part of the Economic Stimulus Act, FHA has been allowed to temporarily raise their loan limits. FHA will now insure loans up to 125 percent of an area's median house price.
The purpose of the increased loan limit is to provide buyers affordable mortgage loans and to help current homeowners who are facing possible foreclosure via FHA's refinancing program FHASecure.
Due to the mortgage crisis many lenders have tighten their lending requirements to such a point that many qualified buyers have not been able to obtain financing. FHA has filled the void by providing loans to many of these buyers. The increased loan limits will allow them to help many more. FHA can help home buyers avoid subprime mortgage products like those that largely contributed to the current high rate of foreclosures and the mortgage credit crisis.
FHA also offers a program 203K (SF Rehabilitation Loan) which allows buyers to buy homes (single-family) that need some rehabilitating and repairs. This loan program offers a mortgage loan which combines both the mortgage and the cost of repairs into one loan. A major advantage of this loan program is that you can buy a home and do the repairs after your escrow closes.
Please remember that the key word here is: temporarily. On December 31, 2008 the new loan limits will revert to the previous limits unless Congress approves legislation to make the new limits permanent as part of the FHA Modernization bill which is currently waiting approval.
There is nowhere on earth that I would rather be than living in the great state of Alaska and in the beautiful City of Anchorage.
This Friday, like Americans all across our great land, Anchorage will be celebrating America's Independence Day with a parade down "Main Street", family picnics in our beautiful parks, barbeques in the backyard and viewing the All-American game of baseball. Here in Anchorage the biggest game of the year is played on the Fourth of July.
The official Anchorage celebration is an all day event which begins at 8:00 am with a traditional Pancake Breakfast on the Delaney Park Strip (9th & G). The breakfast includes a beverage, hot pancakes and bacon, all for a $5 donation. Proceeds go to The Salvation Army.
Our annual veteran's and community parade begins at 11:00. Our "Main Street" parade follows a rectangular route (9th to E St to 6th Ave to K St). This year the parade theme celebrates "THE PRICE OF FREEDOM". Leading the parade of floats and marching bands, will be the 500 athletes who will participate in the Annual National Veteran's Wheelchair Games later in the day.
Following the parade, there will be a FAMILY PICNIC ON DELANEY PARK STRIP ( 1 - 6 p.m.). The Anchorage Family Picnic features exhibits, patriotic and cultural events, games for kids of all ages, food (or pack your own) and musical entertainment. The Harvard Club will open the Family Picnic celebrations with a reading of The Declaration of Independence at the Delaney Park Strip Flagpole.
Cheers will be heard for "miles around" at the 26th Annual National Veteran Wheelchair Games. Competitors race down the parade route in Hand Cycle Races. After the races, stay around and you should soon see those who have made the run from Fairbanks to Anchorage in Sadler's Ultra Challenge begin to cross the finish line.
Of course, no celebration is complete without fireworks. The land of the midnight sun celebrates with a fireworks show at midnight in Mulcahy Stadium (remember we are called the land of the midnight sun because it is still daylight at midnight; but it is the darkest part of the day).
Eagle River celebrates their Independence Day just a little early on July 3rd with an Independence Day Extravaganza from 6 p.m. to Midnight at the Eagle River Lions Park. A spectacular fireworks display at midnight ends the event.
Another celebration, The Great Alaska Salmon Bake and Fly-by ($25 for adults and $15 for children), will be held on July 4, 2008 (3 - 9 p.m.) at the Alaska Aviation Heritage Museum. The event will feature vintage aircraft, live music, games, a silent auction, a book signing event and wonderful door prizes! Food to be enjoyed includes all you can-eat salmon, burgers, hot dogs and side dishes. A beer garden will be open for refreshments. (More Info: www.alaskaairmuseum.org)
The most exciting event of the day for the people of Anchorage is the All-American baseball game between the Anchorage Glacier Pilots and the Anchorage Bucs. The rivalry and competition compare to none and many feel this is the "only game in town" The game is a double header at the Mulcahy Stadium which plays to a "packed house". The game is followed by the Mulcahy Fireworks Show.
Thank you for stopping my and reading my first blog. I hope you will return often as I share the things I love about Anchorage and Alaska , community information and events, real estate tips, advice, news and market conditions and anything else that comes to mind at the time of my writing. I look forward to sharing with you.
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