May 17, 2009

Gabqjournal.com

INSIDE: AUTOMOBILES, TRUCKS AND MOTORCYCLES FOR SALE

REaL ESTaTETHE SUNDaY JOURNaL

IT’S A GOOD TIME TO BUY

Good credit score? Low ratesSixth in a series

By Michael HartranftJournal Staff Writer

With housing prices dropping and mortgage rates dipping to historic lows, it would seem to be an oppor-tune time to purchase a home.

For some, obtaining a loan can be a smooth process — but for others, it can be a bumpy ride. Qualifying is not as easy as it once was.

“We got to a point in 2003 through 2007 where underwriting guide-lines just cut so easy and money got so available that it’s like we used to say: If we can’t get you a loan, you probably shouldn’t be buying a house,” said mortgage broker Heidi Snow, president and founder of Perennial Mortgage in

Albuquerque.“But since the credit crisis, we’ve

seen a considerable tightening of underwriting guidelines.”

The operative words these days are “good credit.” If you have it, a steady job and money for a down payment, chances are pretty good you’ll be able to get financing — at highly attractive rates not seen before.

“Here at the bank, our rates have been below 5 percent, which is defi-nitely at 30-year historic lows,” said senior loan officer Carol Sinor of First Community Bank. “If you look at a graph of mortgage rates over the last 30 years, the average for a home loan was between 8.5 and 9 percent.”

First Community just closed with a couple moving up to a $250,000 home at a 30-year fixed rate of 4.375

percent, she said. They had excellent credit and put 20 percent down.

“It’s a buyers’ market, basically,” Sinor said. “Buyers have been able to get really good deals.”

Even so, times have changed. “I think the most profound dif-

ference we’re seeing is credit scor-ing and how important good credit scores are,” Snow said. “It used to be we could do financing with a 580 credit score, especially on FHA (Federal Housing Administration) financing, whereas now the mini-mum for everybody is 620.

“And if you don’t have a 740 or bet-ter, you’re going to have adjustments to your rate,” she added. “You’re either going to pay more points or have a higher interest rate.”

Realtor Talia Freedman of Keller Williams Realty said she’s seen the

effects on some of her clients.“I work with a lot of first-time

home buyers and often they’re folks who haven’t had to deal with their credit score too much,” she said. “What I’m finding is people are needing a little more time in prepar-ing to buy a house, doing some cred-it repair, saving up more of a down payment than they might have. A number of years ago, these same people would have been able to buy a house as soon as they felt like it.”

Snow said mortgage businesses use credit scores calculated by three credit bureaus — Experion, Tran-sUnion and Equifax — to assess the risk of making a loan, typically merging the data from all three.

The scoring range, depending on the bureau, is 300 to 800, or 350 to 850.

“The most important information that goes into scoring is payment history,” Snow said, noting that it accounts for 35 percent of the score’s weight. “If you have a good pay-ment history, you’re going to have a good score. If you have any late payments, that’s going to hurt your score.”

Thirty percent of the score is weighted on how the person uses his

See GOOD on PAGE G3

Journal Staff Report

Spring is here, and that means it’s time for the second annual Albuquerque Infill Tour designed to promote the most walkable neighborhoods in the city.

From 11 a.m. to 4 p.m. today, participants can view at no charge condos, lofts and town-homes in the areas of Nob Hill,

the University of New Mexico, East Downtown (Edo), Down-town and Old Town.

According to a news release, the tour includes: The Place In Nob Hill condos, Aliso II con-dos, 110 Richmond condos, 117 Richmond studios, Brick Light District lofts, Silver Hill Lofts, 100 Gold Ave. condos, 720 Roma Condos, Agave con-dos, 723 Silver Infill Solutions

office space for lease and The Elements Townhomes, which are being built on the corner of 2nd and Silver.

“It will be a great opportu-nity for people to see the inside of Albuquerque’s best infill developments,” Travis Thom of Venture Realty Group said in the release. “Albuquerque’s infill developments located along the vibrant and active

areas of Nob Hill to Old Town are attracting buyers who desire to be closer to work, mass transportation and shopping.”

Tour maps are available during tour hours at Sunshine Cafe on 12th Street and Moun-tain, in the 100 Gold Lobby and at Venture Realty’s office on Terrace Street and Gold. A downloadable map of the proj-

ects can be found at www.abq-infilltour.com.

In 2008, Venture Realty Group hosted its first Albu-querque Infill Tour with more than 1,000 attendees. The first 300 attendees of this year’s tour can enter for a chance to win one of many prizes and gift certificates.

The first 300 can pick up a tour passport at any tour stop,

then carry the other locations on the tour. At each stop, they will receive a stamp certifying their “trip.” At the end of the tour they will drop off their passport for a drawing of the winner.

Participation at all locations is required to be eligible. Visit the www.abqinfilltour.com “Sponsors” page for details.

See cozy and chic condos in walkable areas on Infill Tour

Walls painted a silver sage color add warmth without darkness to the living area. The fireplace columns bring inside some of the external Craftsman style architecture.

Springi ng

to lifeCraftsman-style home brings a fresh look to west of Downtown

Spring brings a colorful transformation to the nearly century-old neighborhood to the west of Downtown Albuquerque. Trees blossom, flowers pop, and a slow walk reveals a bounty of interesting homes, most of which were built between 1910 and 1920.

From tidy bungalows to stately three-story mansions, there’s a consistent human element in this neighborhood of peopled

front porches and ongoing home renovations.

A newcomer to the mix is a just-completed Craftsman and cottage/shingle-style home built on a rare vacant lot at the northwest corner of 14th and Roma NE. Homeowner Ric Higginbotham, a neighborhood resident whose previous home was a nearby 12th Street bungalow, spent the past

This newly constructed house by Homes by Marie has filled a vacant lot west of Downtown at 14th and Roma. The Craftsman style is a departure from the company’s usual focus on Tuscan and Southwestern style homes. Craftsman-style elements include tapered columns on the front porch, wide overhangs and roof brackets.

HIGGIN-BOTHAM: Designed home

Story by Jane MahoneyFor the Journal

Photographs by Dean HansonOf the Journal

See CRAFTSMAN on PAGE G3

RUSS BALL/jOURNAL

REAL ESTATEThe Sunday Journal Albuquerque, May 17, 2009 G3

few years designing the traditional Craftsman home and shepherding the plans through the design criteria outlined by the Downtown Neighborhood Association and the city’s Landmarks and Urban Conservation Commission.

“This neighborhood is part of the historic Fourth Ward,” explained Higginbotham, a retired elementary-school principal.

The two-story home faces Mary Fox Park and packs 2,150 square feet into its updated design — no small feat, considering the tiny 50- by 60-foot lot it stands on. The yard is minimal, but a front porch and a deck atop the single-car garage provide outdoor spaces, and the shady park is just across the street.

Construction of the home

was by Betty Blea of Homes By Marie, a custom builder generally associated with sumptuous Tuscan and Southwestern-style homes, but who unabashedly touts what fun she had this go-around with old-fashioned painted beadboard, detailed baseboards, box-beamed ceilings and decorative brackets.

The home will be open to the public during the Custom Builders Council Home Tour on June 6-7 and 13-14, and again during the three-weekend Homes of Enchantment Parade in October.

Passers-by can get a sense of the home’s traditional design from the exterior. Craftsman-style elements include tapered columns on the front porch, wide overhangs and roof brackets. The shingle/cottage style adds a blend of slightly

arched and multipaned windows, broad eaves and a gingerbread-decorative effect achieved with white painted shingles against a pitched roof.

“Architecture is my first love,” said Higginbotham, who pored through Web sites, photos and catalogs in search of vintage and reproduction picture rail moldings and pocket doors, Newel stair posts, and glass doorknobs. “Silver Sage,” the living room paint color (one of the few paint colors besides white and black) came from Restoration Hardware.

While the dream was Higginbotham’s, he was assisted in the design process by designer Max Cabber, who has designed numerous homes for Homes By Marie. Higginbotham’s sister-in-law, Judy Smith, helped with the kitchen design.

“This is a very simple, but very detailed home,” said Blea, owner of Homes by Marie. “We have loved doing this and will do more.”

Interior details include a continuation of the exterior’s columns and brackets, as well as recessed windows, a built-in seat at the top of the stairs, French doors, Brazilian cherry wood floors and exposed box beams.

In this home, none of the rooms is gigantic, but the overall feel is spacious.

“It’s human scale,” Higginbotham said. “It’s careful use of limited space.”

The Craftsman-style home is a nod to the growing, dynamic Downtown neighborhood, according to the builder. Within a few blocks, there are tiny homes of 900 square feet and a stone mansion of 6,000 square feet.

from PAGE G1

Craftsman Style Brings Fresh Look to Area

or her credit.“If you’ve maxed out your

credit cards, that’s going to negatively impact your score,” she said.

Credit history — how long you’ve had accounts and kept them in good standing — represents 15 percent of the score. Types of credit in use and inquiries for new credit lines account for the balance of the score. For example, applying for new credit cards in a short period of time while your others are charged to their maximum can indicate higher risk.

A person’s debt-to-income ratio is also used to deter-mine whether he or she should qualify for a loan.

“The rule of thumb,” Snow said, “is maybe 40-42 per-cent of your incomes can be spent on debt (credit cards, car loans and so forth). ... So if you make $2,000 a month and you’re spending $1,200 on debt payments, you’re not going to be able to qualify for any additional debt as far as a

mortgage would go.”Snow said the biggest bar-

rier facing first-time home buyers is usually the down payment.

“We used to have a lot more 100 percent financ-

ing programs,” she said. “Now the only 100 percent financing programs are VA (Veterans Administration) and the USDA Rural Devel-opment programs. There is limited eligibility for those

programs."For first-time homebuyers

who purchase before Dec. 1, there is an $8,000 tax credit, made available as part of the federal stimulus program.

That a 20 percent down

payment is required to buy a home nowadays is not neces-sarily the case, Snow said.

“If you are qualified for FHA financing, then you can do 3½ percent down,” she said. “There is going to be mortgage insurance on that loan.”

The FHA limit on loans is $271,050.

“So if you’re going to buy a $400,000 house, unless you want to put a really big pay-ment down, you’re going to get conventional financing and they’re going to require at least 5 percent down,” Snow said. “But in order to qualify for the new mortgage insurance guidelines, you’re probably going to have to have at least a 740 or higher credit score ...

“It is not necessarily that lenders won’t lend on this, it’s just that we can’t get private mortgage insurance on those higher loan amounts.”

With a 740 score, she said, a person can get conventional financing for up to 95 percent of the value of the home with-out any adjustments to the

rates.“If you’ve got a 640 to 659,

you can only borrow up to 80 percent of the value, plus they’re going to charge you 3 percent of the loan amount to get that loan,” Snow said. “This is what we’re dealing with on these lower credit scores. ... If they don’t have a lot of cash to put down, they’re not going to qualify.”

Snow said people thinking about buying a home should give themselves some time to pay down their debts, repair their credit and save some money for a down payment. They should also get profes-sional advice on what they can do to qualify for the best financing and terms.

“It’s not like lenders don’t have any money to invest; they just have much higher standards than they once did,” she said.

This is part of a series the Journal is producing in partnership with the N.M. Mortgage Finance Authority, Home Builders Association of New Mexico and the Realtors Association of New Mexico.

Good credit can mean low loan ratesfrom PAGE G1

Do your homeworkThe experts say someone with a credit rating score of less than 740 may have to pay a higher interest rate and need a higher down payment. Steps to improving your rating: Pay down your debt, make all your payments on time, don’t take on new debt or new credit cards.

If you’ve been in a home at least a year with any kind of adjustable rate, consider refinancing if you have the ability, says Carol Sinor, senior loan officer for First Community Bank. “My feeling is if you wait until the rate is ready to adjust, you’re going to be refinancing into higher rates at that time,” she said.

In a newsletter for her clients, Heidi Snow of Perennial Mortgage said factors to

consider when deciding whether to refinance include:

■ Length of time you intend to own the home: Closing costs on a conventional loan could cost $2,000 or more, a high cost if the homeowner plans to stay there only a couple more years.

■ Equity: If you purchased the home in the last year or two, with 100 percent financing, you might not have enough equity to refinance.

■ Amount of your loan balance: The bigger the loan, the bigger difference refinancing will make in your payment.

■ How long you’ve had your current loan: If it is more than five years, you pay more each month toward the principal and less toward interest. Refinancing to a new 30-year term would mean you would start paying mostly interest again.

Should you refinance?