Checklist For Obtaining A Home Loan – Part 2

Obtaining a home loan is an important step towards your purchase of Tucson Real Estate.

Following up in a series from our most recent article. We discussed that in the current mortgage and real estate market, the more knowledge you have, and the better you will be prepared to end up with the best possible terms for the purchase or refinance of a home. It always important to know what you need and do not need in order to obtain a home loan and how your situation affects what you can qualify for. Whether you are considering purchasing a home or refinancing, putting everything in place to the best of your abilities ahead of time and knowing what is needed will help you to close your new loan efficiently and with less headeaches.

Debt To Income Ratio: The debt to income ratio refers to a percentage of your monthly debts in relation to your monthly gross income. In others words if your monthly income is $3,000 before taxes and you’re the payments on your monthly debts is $1,000 you would have a 33% debt to income ratio. Those monthly debt payments include things like auto payments, credit card minimum payments, student’s loans and installment loans. They do not include things like auto insurance, cell phone bills or utilities.

Depending on what type of loan you will be obtaining there will be a different loan to income threshold, but typically you will not want to have a debt to income ratio much above 40% in the current market, though it is still possible to obtain approval above that threshold with compensating factors.

That is because most all loans use automated underwriting and with other strong factors you can afford to have a higher debt to income ratio, but with less supporting factors, the lower debt to income ratio, the better. Calculating and figuring out where you stand and what you can possibly due to improve this ratio is almost as beneficial as your credit score itself and often times just as critical, when obtaining a home loan.

Loan Amounts: Yet another critical factor to understand and consider is that of loan amounts or rather loan limits when obtaining a home loan. That is because different home loans have different loan limits, which will affect how large your mortgage can be when obtaining that type of loan.

Currently in Maricopa County in Arizona, the conventional loan limit sits at $417,000 as it does as well for USDA financing. Further still, most people will quote the VA loan limit as $417,000, but in actuality VA home loans do not have an official loan limit. Anything above these levels will have to be a jumbo mortgage and then the process of financing changes all together.

On the other hand, if you are looking at an FHA home loan the current loan limits in Maricopa County sit at $346,250, about $80,000 less than conventional loan limits, but still adequate in many cases in the current marketplace.

Thus, it is obvious that when it comes to purchasing or refinancing it is important to know some of the keys to obtaining financing before you purchase or refinance your home.

The information above was received from http://www.strategicmtgaz.com.

Finding the right loan for you is an important step towards the purchase of Tucson Real Estate.

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Interest Rate Overview as of 19 August 2010

If you have been thinking about purchasing Tucson Real Estate, the interest rates are still looking good.  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

Again, the weak economic data continues to contribute to the current string of record-breaking rates. Freddie Mac announced that for the week ending August 19, 30-year fixed rates averaged 4.42%, down from 4.44% the previous week. The average for 15-year fixed fell to 3.90%. Adjustables were stable with the average for one-year adjustables at 3.53% and five-year adjustables at 3.56%. A year ago 30-year fixed rates were at 5.12%. Attributed to Amy Crews Cutts, deputy chief economist, Freddie Mac. “Investors in long-term bonds appear very confident that inflation will remain in check, and as a result long-term fixed rates have continued to fall. This week marks the ninth straight week in the survey that 30-year-fixed rates have met or set a new record low. “This week’s release of the Consumer Price Index indicates that current inflation is very low. The 12-month growth in the core consumer price index has held at only 0.9 percent for four straight months ending in July. The last time price growth was this low was the year ending January 1966. “The housing market is in a lull following the expiration of the homebuyer tax credits. Single-family starts fell for the third straight month in July to an annual pace of 432,000 homes, the fewest since May 2009.” Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated August 20, 2010


Interest rates are always an important factor when considering a purchase of Tucson Real Estate.

Fannie Mae Launches Homeowner Assistance Website

Have you been having problems deciphering the information regarding loan modification or other assistance regarding your Tucson Real Estate?  If so, you are not alone.

In recent years, homeowners have continued to look for alternate methods of dealing with troubling issues regarding their home ownership. Whether it be looking to modify their existing home loan and stay in their homes. Or if they were looking at a short sale of their home or potentially a deed in lieu of foreclosure to leave their current home without foreclosing.

Of course with so many homeowners looking for information, it has often times been difficult to decipher credible information, from rumors to potential scams and this has often times made the issues homeowners face more difficult to navigate.

However, Fannie Mae, the government-backed mortgage agency recently launched a comprehensive website that aims at providing a single starting point for homeowners looking for assistance, which can be found at: http://www.knowyouroptions.com .

In reviewing the website, it appears to have a good mixture of information that includes information about options to both stay in your home and, as well as options for leaving your current home. As well as additional resources and link from a credible source.

Overall this is a good starting point with as many homeowners loans that Fannie Mae actually does own, though perhaps a bit well overdo. As more information becomes available we will of course share that with you as well.

The information above was received from http://www.strategicmtgaz.com.

Home Maintenance – AC Condensate Water

Owning Tucson Real Estate requires maintenance. Keeping your property well maintained adds value not only to your own property, but also to the entire neighborhood.

An important thing to consider in home maintenance is where the AC condensate water is going.  If it is not going where it belongs, it could be causing problems elsewhere.  Mark Andrews with H&A Services (a home inspection company) has a great story regarding under slab water leaks in his August 2010 Newsletter:

We have covered this topic in several newsletters but we see issues weekly. Since the consequences of condensate drain failures can be very expensive (water damage, mold, etc.), this topic is worth covering again.
Condensate 101: AC systems squeeze moisture out of the air resulting in cooler and drier air. This moisture (called condensate) drains off of the evaporator coil and into a pan. A drain line from the pan carries the condensate to the building’s exterior (95% of the time) or into the homes waste system.
Here’s what you need to know:
The location of the air handler/evaporator coil for each AC system:
-Packaged units: System is one piece and evaporator coil is in the unit
-Split systems: System is two pieces and evaporator coil/air handler may be in the attic, garage, hall or exterior closet
The location of the condensate line termination:
-Roof mounted packaged units: At the roof edge or into a plumbing vent
-Attic air handlers: Through the home’s exterior wall or into a plumbing vent or plumbing waste pipe
-Hall or garage closet: Through the exterior wall or pumped to a plumbing waste pipe
– Exterior closet: Through the exterior wall
Your Job: When the AC units are operating, is condensate water flowing to its designed termination? This simple task is important and needs to be checked regularly. If you have pipes through the side wall, are the low pipes dripping when the system is operating? Caution; if you have a high and a low pipe on the exterior wall with water dripping from the high pipe, your primary line is blocked!
Why do condensate drain systems fail:
-Pipes separate
-Bugs build nests in pipes (enter at the pipes termination)
-Dirt, dust, and debris block entry to the drain pipe (at the pan)
-Condensate pumps stop working

Remember to keep your Tucson Real Estate maintained.

Interest Rate Overview as of 12 August 2010

If you have been thinking about purchasing Tucson Real Estate, the interest rates are still looking good.  Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

The weak economic data continues to contribute to the current string of record-breaking rates. Freddie Mac announced that for the week ending August 12, 30-year fixed rates averaged 4.44%, down from 4.49% the previous week. The average for 15-year fixed fell to 3.92%. Adjustables were also down with the average for one-year adjustables falling to 3.53% and five-year adjustables decreasing to 3.56%. A year ago 30-year fixed rates were at 5.29%. Stated Frank Nothaft, vice president and chief economist, “Rates for fixed loans and 5-year hybrid ARMs again broke record lows this week following reports of a sluggish job market. Private payrolls increased by 71,000 jobs in July, below the market consensus forecast, and revisions shaved June’s growth by 34,000 workers. The Federal Reserve also noted in its August 10th policy statement that the pace of recovery in output and employment slowed since its last meeting in June. Low rates are helping to heal many battered local housing markets by increasing home-purchase activity. The National Association of Realtors® reported that 65 percent of the 155 metropolitan areas they track experienced yearly increases in the second quarter of this year. This compares to 60 percent of areas in the first quarter and only 44 percent in the fourth quarter of 2009.”  Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Current Indices For Adjustable Rate Mortgages
Updated August 13, 2010

Interest rates are always an important factor when considering a purchase of Tucson Real Estate.

The Blame Game

Who is to blame for the economy? Here is what Richard Blair from Smart Financial Mortgage had to say in a recent email:

n looking at the economy and what will snap us out of what has evolved from a recession to long-term “doldrums,” there is a lot of finger pointing going on. We are not talking about politics here because finger pointing by politicians is not news. Many have pointed to real estate as the culprit as the collapse of the real estate boom led us into recession. The shift then moved to consumer confidence. Until consumers are confident and start spending, the economy won’t recover. Lately, it has all been about employment, because at some point companies need to start hiring again. All of these are factors. This is from a recent Fortune article: “Personal spending, in fact, has kept pace with the economy, accounting for a steady 70% of GDP before the recession, during the depths of the crisis, and into today’s slow recovery. Spending by companies on everything from buildings to new equipment to software has risen steadily since 2009, but it’s still below the ratios prior to the recession.”

Indeed, the Labor Department reported that worker productivity fell 0.9% in the second quarter. That’s the first decline in eighteen months and may be a sign that employees have finally gotten to the point where they are simply stretched too thin. Working harder for less money? No wonder consumer confidence is down. From CNN/Money: “What’s happened is a lot of U.S. companies have reached the limit of how much they can slash their workforce and work existing employees to the bone,” said Nariman Behravesh, chief economist with IHS Global Insight in Lexington, Mass. “At some point, even weak spending growth will require businesses to hire more people to meet the demand.” Businesses are not hiring because they are not confident. Don’t expect consumers to be confident until businesses start hiring. Another vicious cycle and one we need to start breaking out of soon if we expect to escape the doldrums.

Exploring Tucson – Summerhaven

The weekend is upon us and it is time to decide what to do with your precious time off work.  Better yet, looking for a way to cool off from the summer heat?  Why not try Summerhaven.

The area where this small community on the top of Mount Lemmon stands has been a Tucson summer haven for over a century.  In 1906, the trail that the Native Americans had used to reach the summit was improved in a push to make the mountain more accessible.  In 1909, Jim Wesfall and his wife, Lita Camacho had a log structure built to entertain guests and called it the “Maricopa Lodge.”  At the time, of course, it took the whole day to reach the top.  Now, it is less than an hour from the intersection of Tanque Verde and the Catalina Highway, that is if you drive straight up and choose not to stop and enjoy the scenery along the way.  There are many summer events in and around Summerhaven to keep your family occupied.  You can take a summer ride on the ski lift in Ski Valley for around $9.00.  You can have a meal at the Irondoor Restaurant and desert at the Mt. Lemmon Cookie Cabin.  You can hike the numerous trails along the trip to the summit.  You can camp overnight at the Rose Canyon Campground. You could even go fishing in one of the few places near Tucson where this activity is available, Rose Canyon Lake.

Of course, you don’t have to limit your Summerhaven activities to just the summer.  Remember, the closest place to snow ski near Tucson is Ski Valley.

So this weekend, while taking a break from the search for your perfect Tucson Real Estate, check out Summerhaven.