HOUSING IN ALASKA REMAINS STABLE DESPITE NATIONAL WOES

"Alaska's real estate markets are stable, although they are cooling from the go-go years from 2004 to 2007, according to the head of Alaska Housing Finance Corp."

Alaska's delinquency rates of 2.66 percent on home loans were less than half the national average of 6.99 percent at the end of the third quarter of 2008.

Third quarter data shows home sales down 20 percent in Anchorage and Mat-Su, 13 percent down in Fairbanks and 17 percent down in Kenai.

Courtesy: Tim Bradner, Alaska Journal of Commerce

FHA Hikes Limits

If you're a mortgage lender or REALTOR®, homebuyer or homeowner in one of the Northwest's high-cost housing markets - like Seattle, Portland, Boise, Tacoma, Anchorage, Eugene, Olympia, Fairbanks, Corvallis, Vancouver, Juneau, Salem, Bremerton, Sitka or Bend - the recently-enhanced stimulus package - aka, the American Recovery & Reinvestment Act of 2009 has something very important to you - higher FHA mortgage insurance limits. The higher limits are in effect for loans for which credit is approved in calendar year 2009 and will remain in effect until December 31, 2009. The higher limits give homebuyers a larger inventory of homes from which to choose and give more homeowners in a volatile market the chance to refinance into, says HUD Secretary Donovan, FHA's "safe, affordable mortgage products." To find out if limits in your market have increased, visit https://entp.hud.gov/idapp/html/hicostlook.cfm.

The stimulus bill also raised the limit on "reverse" or Home Equity Conversion mortgage from $417,000 to $625,500. Until April 30th, 2009, FHA will allow HECMs that received case number assignments but didn't close prior to the effective date of this mortgagee letter to be closed using either the old limit that was used to originally calculate the loan, or the new limits. Source: HUD HIGHLIGHTS, March 2009. HUD e-Briefs from Alaska, Idaho, Oregon & Washington.

Courtesy Alaska Multiple Listing Service

The Mortgage Market View...

The Heat is On
Homes are on sale, sellers are motivated, and interest rates are at historic lows...but may not stay that way, which means it makes sense to get moving on that home purchase or refinance you've been contemplating. But if you or one of your clients is among the smart individuals who are going ahead and taking advantage of the low home loan rates to be had right now, there are a few things to be aware of.

With interest rates at record lows, all lenders in the US have recently seen a sharp increase in loan applications - right at the time that many lenders have cut headcount to save money in a challenging economy. This means that timeframes needed for underwriting, approvals and closing have become longer than normal. Some companies have chosen to actually raise rates just to slow down the volume to a manageable level.

Sound crazy? No crazier than when you go to buy that hot new vehicle...only to find that there is no price negotiation. In fact, you wind up lucky to just pay the sticker price, as the demand usually allows the Dealer to add a markup to the price. And you don't get the car right away; you have to wait on a list for your turn to come up.

Right now, home loans are like that hot new car - but with the timer ticking on interest rates locks, there are a few things you can do to protect yourself.

First, longer lock in time frames than might normally have been considered are a necessity, to ensure that the file has time to be processed, underwritten, approved and closed in time to protect the rate lock in this extremely volatile climate. And that longer, safer lock-in period may be a bit more costly - but it's money well spent. Overall, the mind set here should not be one of greed. Don't try to squeeze every last drop out of rates. If you are within a quarter percent of the lowest rates offered in the history of this country, you did very well. And rates always shoot up higher at a much faster pace than when then dip lower. So if the savings or opportunity make sense - grab it.

Next, responding quickly to requests for information or documentation is important - the faster the file is submitted and approved, the better off we are to keep that great interest rate protected.

Finally, be aware that it may be a smart idea to pay points to gain the best interest rate - and sometimes is even necessary in today's market. Giant mortgage buyers Fannie Mae and Freddie Mac have recently imposed more "risk-based pricing adjustments", meaning that evencredit scores and loan to values which in the past would have been considered very low risk, may now be subject to mandated fees by Fannie and Freddie. And based on the way lenders have changed their rate sheets over time, there is now very little "premium pricing", which used to allow options for fees like these, points or other closing costs to be covered in return for a slightly higher interest rate.

Right now is still an excellent time to act, before the great low rates of today get away from us. But let's be smart - call me for information on how we can get started right away.

Courtesy: Carol Pope, Wells Fargo Home Mortgage

5 Tips for Homebuyers Seeking a Mortgage

Here’s a warning for potential borrowers: Nervous lenders have tough new rules and are paperwork crazy.

"Borrowers are going to have to prove they are the borrower they say they are," says Keith Gumbinger, vice president of HSH Associates, a mortgage-industry publisher in Pompton Plains, N.J.

Gumbinger says homebuyers should consider these things before they apply for a loan.

1. Down payments are critical. Borrowers should expect to put down at least 10 percent for a “conforming loan” – a mortgage that Fannie Mae and Freddie Mac will purchase.

2. Credit scores count. A 720 on the 850-point FICO rating scale will get a borrower access to the best rates. Rich Bira, branch manager of FCM Direct Lender in Chicago, says: "A score between 720 and 739 gets 0.125 percent added to the rate, a score between 700 and 719 gets 0.375 percent added to the rate, and a score between 680 and 699 gets 0.5 percent added to the rate.”

3. Consider VA and FHA. Borrowers without down payments or with less than stellar credit scores should consider these government-insured loans offered through the Federal Housing Administration of the Veterans Administration.

4. Unearth the records. Before applying, borrowers should organize tax, banking and other records that prove income, savings and debts. They should also expect to be patient about what may seem to be endless requests for information.

5. Get rid of debts. Limiting debts, including what borrowers expect to pay for the mortgage, to less than 43 percent of gross income is important.

Source: Chicago Tribune, Mary Umberger (02/15/09)

Activity has certainly picked up at Glacier City Realty. We have had two new listings this past week in addition to two properties which closed the first part of January and two more properties closing this week.

One is a 4 bedroom, 3 bath, 1996 SF home with fireplace, on 2.5 acres in Bird. $415,000

And,

A 2 bedroom, 1 bath, 766 SF condo with fireplace at the base of the mountain above the Bakeshop in Girdwood. $239,500

We had a condo in coveted Snow Bird, sell within 1 week of listing. The Alaska housing market is certainly not in a slump like the Lower 48 even though it had slowed a bit in 2008.