In March of 2009, the Arizona housing market looked more like a foreclosure market than a housing market.  Home values in the Phoenix area were down more than 20%.  By 2011 the values moved to -5%, and signs of growth were showing in many individual neighborhoods.  Today the situation is much different with most areas having gained substantially and values leading the nation at +20%.

We are in a strong market that is continuing to increase in value.

By Rosa Heyman  May 19, 2013

Improving your credit score does require some patience and perseverance—a significant increase can take 12 months or more, according to experts.  But it’s worth the effort.  A jump of even 100 points can translate into thousands of dollars in interest saved on a loan or mortgage.  If you applied for a 30-year mortgage for $200,000, for example, the difference between a FICO score of 650, which is considered good, and one of 750, which is great, could be nearly $34,000 in savings, thanks to the lower interest rate the higher score could get you.  FICO scores can range up to 850, though one of 760 or more will often qualify you for the best rates. (You can check yours for free once a year at http://www. Annualcreditreport.com)

If your FICO falls short, try these 6 steps to get a stronger score.

Automate your bill payments.  Setting up automatic monthly payments can help ensure you wont’ miss or delay a payment, which can cost you both in additional interest you may owe and in credit score points.  Even one 60-90 day late payment can hurt your score, says Jean Chatzky, a financial journalist and author of “Pay It Down!”  If you know that you are going to be late because of an unusual circumstance, such as an unexpected illness or job loss, call your issuer and let them know in advance.  They might even give you a grace period.

Keep your debt utilization ration low.  Your debt utilization ration is your total amount of debt divided by your total amount of available credit.  So, if you have two different credit cards with a $5,000 limit (or $10,000 total) and you owe a combined $4,000 between the two, you are using 40 percent of your available credit.  That’s too high, says Bill Hardekopf, the CEO of LowCards.com, a credit card information website.  “Your debt utilization ratio should be no higher than 30 percent, “ he says.  “But lower is even better.”

Space out your credit applications.
Applying for several credit cards at the same time results in multiple credit inquiries in a short period and can raise a red flag among credit scoring companies, says Hardekopf. “Don’t apply for ten cards, hoping that you will get one or two,” he warns. “This will signal that you are in some type of financial difficulty.” If you need additional credit, consider calling an existing card issuer first to see if you can increase your credit limit.

Don’t close credit cards you aren’t using.
Though this tip may sound illogical, it can actually help you improve your score. “When you close a credit card, the credit you have available declines,” Chatzky explains. Need to boost your credit score ASAP? Chatzky says one of the quickest ways to boost your credit score is to request an increase in an existing credit line instead and then not use it.

Keep old accounts active.
Length of payment history counts for about 15 percent of your credit score. So long-term accounts with consistent on-time payment records can help add points to your credit score. And closing them can have the opposite effect, influencing your length of payment history and total credit limit (which can adversely affect your debt utilization ratio). Keep accounts open and in use: Some issuers will close an account or stop reporting it to the credit bureaus if it remains inactive for too long, warns Jennifer Lee, a spokeswoman for Credit Karma. Hardekopf recommends making a small purchase every month or so and paying it off in its entirety to keep accounts, and credit, intact.

Mix it up.
Your credit mix determines 10 percent of your credit score. “Credit scoring companies like to see that you have the ability to pay off a car loan, utilities, student loans, and maybe eventually a mortgage,” notes Chatzky. Or, at least, make consistent monthly payments on each. Doing so shows that you can manage different types of loans and payments responsibly.

Editors’ Note: You can get your credit report for free once a year from each of the three main reporting agencies through  https://www.annualcreditreport.com. (Scores are not included, but may be obtained for a fee.)

The National Association of Home Builders (NAHB) Housing Market Index for May was reported at 44, up 3 points from last month, and in line with expectations.  A look at the chart shows that this index has been moving significantly higher during the past two years.  And just like last year at this time, there was a slight dip in the index before continuing higher.*

Based on the numbers, I would say we are still in a climbing position and prices are going to go higher, however it appears that the rise will be more measured and then level off to a normal range.

It is a sellers market and the demand is high, now is the time to make your move!

*MBS Highway report 5/15/2013

FHA financing allows for minimal down payment options ~~3.5% down and low interest rates, but previously required a credit score of 640.

Peoples Mortgage Company can now qualify borrowers with a credit score of 600.

Unlike Conventional loans, where the credit score plays into the monthly mortgage insurance costs, FHA financing ensures a fixed monthly mortgage insurance rate regardless of credit.

Maximum debt ratios and minimum reserve requirements will apply, and borrower must receive an approve/eligible through an automated underwriting system to complete the loan process.

Have you found the perfect house, but there are a few minor repairs that are preventing you from getting a loan?  Or maybe you have been held up or had a loan denied at closing with issues such as broken windows, missing A/C unit, or unfinished flooring?

My Escrow Repair Program can help get your loan closed!  This program is meant for properties with minor problems that cannot be fixed prior to closing.  This is not a program for a rehab project.

Here’s how it works

• Work must be completed within 2 weeks of closing
• Work over $3,000 must be done by licensed contractor
• 150% of the bid will be held in escrow until completed
• Additional Fees: $250 holdback fee, potential lock extension fee, final inspection fee
• Valid on most loan types and all occupancy types

This is not a program for a rehab project, but it could be the answer to closing your loan today!

Credit reporting agencies monitor a great deal of information about you in an attempt to gauge your ability to pay back your debts.

Here is a list of items that DO NOT impact your score…

1. Race, Color, Religion, National Origin, Sex and Marital Status
2. Your Age
3. An interest rate being charged on a particular credit card or other account
4. Consumer initiated inquiries (requests you have made to review your credit)
5. Items NOT listed in your credit report
6. Your employer, salary, occupation or employment history

If you haven’t checked your credit score lately, you can check it for free once a year at AnnualCreditReport.com.  Know your credit score!

Upcoming FHA changes…

FHA recently announced that loans closed after June 3rd, 2013 will no longer have the option of cancelling mortgage insurance payments as their loan matures. This would be a huge change for FHA buyers.

Currently, FHA buyers who carry mortgage insurance on their property can request an appraisal and petition FHA once their loan balance is less than 78% of their home value.

Looking at a timeline, this means the MI could potentially drop off after 10 years, or sooner based on appreciation. The new policy will require that MI be paid for the entire term of the loan.

How can you avoid MI for the life of your loan?  There are not many options;

1. Obtain an FHA case number (loan reservation) before June 3, 2013.  You must have a property address to reserve.
2. Review your options for using a Conventional loan, there are options for as little as 5% down.

How Does This Stack Up?

On a $250,000 mortgage the monthly Mortgage Insurance is about $280.00

This equates to an estimated $67,000 over the life of the loan, just due to the policy change.

If you are considering refinancing or considering a move and using FHA financing, call me to discuss your options.

FOR EXAMPLE…

A home is valued at $200,000

The outstanding mortgage is at $250,000.

If
 home qualifies for HARP 2 Principal Reduction, the homeowner could receive $50,000 to bring down their principal balance to $200,000.

Homebuyer Eligibility
Buyers must have a minimum FICO credit score of 640 and maximum 45 debt-to-income (DTI) ratio.

Must qualify for a standard FHA loan.

All buyers must attend a homebuyer education course and obtain a certificate of completion, and receive a home inspection.

Program Eligibility
Homebuyers may purchase a home anywhere in Maricopa County, including in the City of Phoenix.

Buyers must occupy the home as their principal residence within 60 days of closing.

The program may only be used to purchase a home (i.e., no refinancing).

Income Limits for Eligible Borrowers
Maximum credit qualifying income may not exceed $88,340 for ALL borrowers.

Purchase Price Limit
Maximum purchase price limit of $300,000.

Special Incentives for Qualified United States Military Personnel
Down payment/closing cost assistance of an additional 1% for a total of 6%.

This assistance is a grant and does not require repayment.

Down Payment Assistance
All homebuyers qualifying for down payment assistance will receive 5% of the original loan amount to be used for down payment and closing cost assistance.

Qualified United States Military Personnel will receive 6% of the original loan amount.

This assistance is a grant and does not require repayment.