What do Texas, Colorado, Oklahoma, West Virginia, Wyoming and North Dakota have in common? They were all recently cited as six of the top 10 fastest growing states in the country and all of them can name domestic oil and/or natural gas production as a component of their success. These states join Alaska and California in fueling our country. “Increased oil and gas supplies will bring an economic renaissance to the United States,” petroleum economist Philip Verleger declared recently. “Energy independence, once thought unrealistic, will be achieved.”
Domestic energy production is making a significant impact on the nation’s economy and there is an increased demand for accounts receivable financing. The need for ancillary services such as water haulers, frac sand haulers, roustabouts, vacuum trucks, environmental clean up, excavating / dirt work, tank cleaners, pressure washing, component manufacturers, inspection services, flowback testing, gravel pit suppliers and rig movers has created an additional layer of economic opportunity. These support companies are experiencing the same growth pressure as the energy producers themselves. Entrepreneurs are finding themselves in a position to manage quickly expanding financial needs. Prosperity makes demands beyond their technical expertise. As a result, these entrepreneurs may need to reach out to their own support sources in order to remain viable in a rapidly increasing economy.
Traditionally, such growth rates create a need for working capital as businesses expand rapidly. This economic recovery will be unlike those of the past as banks are under greater scrutiny and are more averse to risky lending. In theory, banks should limit the risk as they are lending their depositors’ and shareholders’ funds. Cash flow financing for domestic energy will most likely need to come from asset based financing. Thus, it will become more common for burgeoning oil and natural gas producers to borrow directly against their accounts receivable in order to fuel continued production. This form of funding is appropriate as we move more toward a manufacturing and commodity based economy versus a service economy.
The service sector will still play a significant role in this expansion. More and more companies are outsourcing entire departments to domestic companies which specialize in the management duties which are outside of the normal daily operations of the company. Utilizing these resources will leverage their existing workforce without managing additional employees or dealing with the day to day details outside of their primary business. This will enable better information on a more timely basis and can remove the company employees from the collection process There is the additional benefit of having an objective evaluation of the reliability of paying customers without the bias which can result from business interactions.
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I’m going to buy over 100 homes this year and so should you!
Investors today are having a tough enough time with their current investments. Refinances are tough, if not impossible, to do in your investment portfolio at the present moment. With the sliding market we are seeing great prices on homes everywhere but how do you get yourself into the transaction if you’re not able to get a loan on the home?
The “Subject To” deal may very well be the solution to your problem.
The definition of a subject to deal is when you purchase a home from a seller “subject to” them keeping their current financing (loan) on the property for an agreed upon amount of time.
So what does that mean and how can you use this strategy to buy 100 homes in this market?
To give you an idea of how these deals work and why they are win-win powerful deals, let me describe a recent transaction we participated in.
We had a seller who moved to San Antonio about five years ago, then decided it was his wish to move back home to Alaska. (As an investor I never question the cause of motivation.) This particular seller wanted to go to Alaska and now wasn’t soon enough! He didn’t have the time or patience to make the minor repairs the home needed or to let it sit on the market. He wanted a quick sale and just wanted out of the home.
To help him out we agreed to take the home over and closed the deal a week later. We put the home into a land trust and put a renter in the home. Within a month we had purchased a home with equity and cashflow. The seller is now in Alaska and is as happy as can be!
Most of the time you won’t be doing subject to deals with folks who just want to move to Alaska. It is true that subject to’s are normally used to help folks who are JUST entering into pre-foreclosure but still these type of deals work. As a matter of fact, they work like a charm.
Subject to Detractors:
1) A subject to deal is risky because you don’t own the home.
This is an inaccurate statement. When we do subject to deals we ALWAYS have the home deeded to a land trust, which we own.
2) A lender can call the note due at anytime.
While this is correct, I have never seen a lender call a note due on any investor who is paying the note in a timely manner. In fact, I have called lenders to tell them I now have a fiduciary interest in the home and that I will be making payments on the home (Can you spell it out any clearer?) The lenders just say okay and send me the payment information on the property. The bottom line is that lenders want to work with people who make payments on the homes. It does not make sense for them to pay the fees to call a note due when the note is being paid.
I will give this last word of caution to my investor friends. Subject to’s are a great way to buy homes at a discount and with cashflow. But we must always remember we are giving the seller of the home our word that we will make the payments on the home no matter what. The only time subject to deals go wrong is when investors don’t keep their promises and fail to make the payment. Although I would say in this case, it is not the investment strategy that failed but the investor. The bottom line is if you can’t handle the worst-case scenario (you paying the mortgage), then you shouldn’t do the deal. But that is the case with any kind of deal. I take my commitments seriously to my sellers and I advise all investors to do the same.
With that being said, subject to deals are a powerful and helpful way to purchase real estate. In today’s current market this is, above all, the most powerful strategy in buying tons of undervalued homes. It’s why we have made a goal of purchasing over 100 of these homes this year! You too should cash in on these great deals and remember at the same time you’re making money; you are helping lots of people out of bad situations. And that, my friends, is the best way to make money.
Are you currently a home owner in California, Utah or Alaska? If you are, then you should refinance your home mortgage right now. That’s because this is the best time for home mortgage refinancing for people with properties in these states, because mortgage rates are still relatively low but they’ll soon be going up. Particularly if your house had been financed years ago, it’s most likely that your mortgage loan interest rate was calculated based on higher rates at that time.
Additionally, refinancing your home can bring many benefits, like lower monthly repayment amounts. Plus, if you have already paid up most of your outstanding equity, then you can easily get some cash out of your home’s equity. With the continuing growth in the housing market in states like Utah, California and Alaska, interest rates are expected to rise with this increasing demand. Hence, now is best time to lock in on these low interest rates.
Probably the best way to evaluate your options for residential refinance mortgage loans would be to search online through the various home mortgage lenders websites. For instance, a search on Utah refinance mortgage loans or Alaska refinance mortgage loans will list you results on various mortgage loan companies offering refinance packages at very competitive rates.
However, it pays to make an informed evaluation on the different loan packages offered by different lenders as well as by mortgage brokers by making comparison in terms of the criteria, interest rates, points, insurance costs, as well as repayment flexibility offered by the different mortgage loan companies.
The first thing you can do is to search through the online Refinance Directory for Utah, California and Alaska, which gives links to various mortgage loan refinancing companies so you can visit the individual mortgage company sites directly from this directory. You should already have your current mortgage loan details at hand, such as your current repayment amount, the outstanding equity to be paid as well as the loan period. With this, you can then utilize the various refinance loan calculation tools to get a rough idea on current rates and new repayment amounts that you will need to make.
For example, once you’ve narrowed down your choices on the possible mortgage lenders that you want to use to refinance your California home mortgage, you can then simply submit your application online through their website, along with your personal details, key information about your current property, your income status as well as your employment information.
After you received your online loan quote, these mortgage lenders usually assign a customer service representative to handle your application. They usually request documentation of your stated information, like your credit report, current loan documentation and home ownership documents. Your service representative will advise you on any additional costs that will be incurred, like insurance costs, lawyer’s fees, points and even penalty costs imposed by your current home mortgage lender.
Sometimes, it may be advisable to refinance your California home mortgage with the same lender who provided you with your initial home mortgage. This way you can request that certain charges such as points, penalty costs or insurance be waived or reduced, which will give you additional cost savings on top of the lower interest rates charged.
The oil fields of Alaska remain a mostly untapped resource that the United States looks to for fuel in the future. The U.S. has been depending on Alaska for 17% of its domestic crude for about 3 decades now, due to its large supplies that have been found thus far and one of the largest pipelines of its kind in the world.
Oil was discovered at Prudhoe Bay in Northern Alaska in 1968, and motivated an assemblage of different oil companies to pool their financial resources and find a way to get the precious petroleum to port and to consumers. The five oil companies decided the most efficient way to move the oil would be an enormous pipeline stretching from the bay to the port of Valdez, a nearly 800 mile route which would stop at the northernmost ice-free port in the United States. These companies decided they would share profits and rights to the pipeline and hired the Alyeska Pipeline Service Company to keep the pipeline clean and running after its construction. The pipeline construction itself cost over 8 billion dollars and was the largest privately financed construction project ever.
The companies involved in the project and their shares in the pipeline, determined by the amount of money invested, are British Petroleum (46.93%), ConocoPhillips (28.29%), ExxonMobil (20.34%), Unocal (1.36%), and Koch (3.08%). These companies make sure that their private contracting company, the Alyeska Pipeline Service Company, keep things running smoothly, helping to protect their interests in Alaska and helping serve their customers around the U.S. Construction began in 1975 and was completed in 1977. The pipeline has a diameter of 48 inches and spans 800 miles across three mountain ranges and over nearly 800 Alaskan rivers and streams. In many sections, the pipeline needed to be elevated in order to protect the permafrost, permanently frozen soil, in danger of melting from the heat emanating from the crude carrying pipe.
The oil supplies at Prudhoe Bay have provided nearly 500 billion gallons of oil since the pipeline’s construction in 1977. Nearly 40 billion gallons of oil coarse through its steely-veined infrastructure every single day! The Trans Alaska Pipeline System is not only important to United States oil consumers and companies; perhaps its largest contribution is to the state government and inhabitants of Alaska itself. The pipeline provides nearly 80% of the funding for Alaska’s state government as well as giving Alaskan natives royalties from the oil production to help offset the use of their land for pipeline construction. As more oil is discovered in Alaska, more pipelines will surely become necessary for transport, further benefiting Alaskans and the United States population alike.
Late last summer, the Alaska Housing Finance Corporation (AHFC) announced that it was accepting Notice of Intent applications for developers interesting in pursuing special needs/affordable housing. Notice of Intent applications are typically required for projects wishing to receive funding from Alaska’s Special Needs Housing Grant Program, which has become an important funding mechanism for affordable homes.
The Special Needs Housing Grant (SNHG) Program was created to provide incentive for the development of affordable housing for people with special needs – especially those who receive assistance through the Alaska Mental Health Trust. Grant funds can be used for property acquisition and rehabilitation or new construction of rental properties. In addition, HOME Investment Partnership funds are often made available specifically for rental property that meets both special needs and affordable housing requirements.
Projects that receive SNHG funding are expected to submit to a post-project audit in which financial expenditures are reviewed to ensure that grant money was used for special needs housing. The SNHG Program application is a two-step process. First a Notice of Intent to Apply for SNHG Program Resources Form must be filled out and submitted via email. Next, an application must be submitted through the AHFCs online system. Typically, both applications are due on the same day.
Last fall, the AHFC announced its Notice of Funding Availability for the 2011 fiscal year. Both zero-interest loans and grants were made available. There is no indication yet whether a second round of funding will take place this year. Additional information is available on the Alaska Housing Finance Corporation web site.
The SNHG Program is just one of the ways that cash-strapped states are continuing to fund affordable housing projects.
The community of Eagle River is set within the Municipality of Anchorage and is a very attractive location in the state of Alaska. With opportunities opening up, the residents of the region are now considering investing in property within the state. Eagle River, Alaska real estate agents are knowledgeable about the landscape as well as the various amenities of the region.
The beautiful state of Alaska with its many picturesque locations has begun to look very attractive indeed. With more and more people throughout the United States of America, looking forward to relocate to the region, the Eagle River, Alaska real estate professionals are in for a busy time. Almost half of the population of Alaska resides in and real estate value for Eagle River has been increasing steadily over the years. With modern day facilities readily available, the area still retains its wild and unspoiled beauty. With high snow capped mountains and lush valleys supporting a variety of wild life, purchasing a new home in Eagle River, Alaska will provide you with a good value for the amount of money you will be spending.
The demand for Eagle River, Alaska real estate is high and the market remains a buyer’s market. With Business Week listing Anchorage and its surrounding areas as one of the best regions to overcome the effects of the recession, the demand for property in Alaska has skyrocketed. The rich natural resources of oil and natural gas have contributed significantly to the robust economy of the region. The presence of the US military and an attractive tourism industry has also increased the desirability of the location for prime Eagle River, Alaska real estate.
The city of Anchorage, as well as the whole region, are beautiful locations amidst the wilderness of Alaska and investing in real estate can be a particularly lucrative. Although home loans may be a little difficult to obtain, contacting a well informed estate agent in the area might help you to get a good mortgage deal. The high amount of tourist population in the state has led to an increased demand for vacation homes and lodging in the region and buying a home in the ‘city of lights’ can turn out to be a profitable proposition. With a large number of students taking up residence in the state, you can rent out your home to University students as well.
Eagle River, Alaska real estate agents can offer you single homes, family homes as well as luxurious condos. All of these options at reasonable prices too. The price for an average four-bed, four-bath house may starts around $595,000 and goes up to $1,100,000. Multi family homes and ranches are also available in Eagle River, Alaska. Easy home finance options, as well as the best rates can be found out by seeking the advice of an Eagle River, Alaska real estate agent. Different home evaluation tools and calculators will help you keep up to date with the current real estate prices.
What Real Estate Lenders Look For
Lenders control many programs — some make use of over 200! Generally, lenders look for the following typical standards, with many exceptions:
1. Absolutely no late mortgage payments
2. Credit score above 580
3. If bankruptcy, no charge-offs or collection accounts afterwards
4. If bankruptcy, only 1 late payment afterwards
5. Two active revolving accounts in good standing
6. Good employment history or stated income
7. Three to six months reserves (covering mortgage payment, taxes & insurance) in savings
8. 55% income to debt ratio
9. Appropriate loan-to-value ratio on purchase property
Borrowers obtain a loan by bringing something of value to the table. One of the following assets ought to get you financing:
1. Good credit score
2. Good income
3. Good cash down payment and reserves
Seven Loan Types and Finance Terms
Understanding the variety of loan types and terms enables you to choose an effective lender. Here are seven important loan types and related terms:
1. “A” Loans
Borrowers with great credit, a good cash reserve, good employment, and a debt-to-income ratio of less than 33%, qualify for “A” loans. These loans typically cost less upfront for points and costs, charge no prepayment penalty, and offer lower interest rates.
2. Sub-Prime Loans
Credit reporting agency websites portray Americans as having great credit. These informational articles and graphs mislead and cause struggling home buyers to feel inadequate. In fact, my Countrywide lending contact told me that 60% of all applicants are considered “sub-prime” borrowers. Sub-prime borrowers usually are those with credit scores under 620 or those with other conditions such as undocumented stated income, poor employment history, or credit issues such as collections, charge offs, and late payments.
3. Stated Income Loans
Most applicants for a mortgage have a full-time job with income tax returns verifying income for the past two years. Other borrowers, like me, with multiple streams of income must get loans with stated income. Some lenders require two years of bank statements showing deposits equaling the required total income, proving the ability to make the mortgage payment.
4. Full-documented Loans
These loans require tax returns, employment verification, bank statements, and other individual lender demands. Other processing types, more flexible and easier for the borrower to gather information on, do not necessarily cost more. High credit scores, big down payments, and large cash reserves ease documentation requirements.
5. Conforming Loans & Jumbo Loans
According to Fannie Mae and Freddie Mac guidelines, “conforming loans” are mortgages for less than the following allowable amounts at the time of this writing:
(Unit= dwelling or housing unit)
1 unit $333,700
2 units $413,100
3 units $499,300
4 units $625,000
Note: the amounts are higher in Hawaii and Alaska. Other states like California, New York, and Florida join the higher limits this year. The dollar amount of these loans changes periodically.
Conventional lenders also use the term conforming loans for loans which are not Fannie Mae and Freddie Mac loans. Conforming loans simply refers to the dollar amount; it doesn’t mean you get a Freddie Mac or Fannie Mae loan.
6. “Jumbo loans” are for higher dollar amounts.
You need jumbo loans to finance properties requiring larger mortgages than the limited conventional loan amount. Jumbo loans usually charge higher interest rates than conforming loans.
7. Home Equity Line of Credit (HELOC)
If you already own your own home, consider a Home Equity Line of Credit, with few fees and lower costs, for purchasing investment property. Use this line of credit for a large down payment on your investment properties over and over. With twenty percent or more down on an investment property, you get better financing plus save on loan costs.
Anchorage, Alaska, is located in Anchorage County and lies 1434 miles northwest of Seattle, Washington. Anchorage has a population of 260,283. Its residents enjoy outdoor activities like kayaking through Prince William Sound, fly-fishing, skiing, and hiking and a relatively mild climate.
Anchorage is a historical and bustling city that serves as the transportation, banking, and business center of the state. Notable structures include historic buildings such as Anchorage’s City Hall, built in 1936, as well as the 4th Avenue Theatre, an art deco style building dating from 1947 with stunning floor to ceiling bronze interior murals.
Anchorage, incorporated in 1920, is a relatively young city, and homes built in the 1950s almost enjoy historic status. Nevertheless, the city’s vibrancy has earned Anchorage the reputation as the new ‘in’ city for travelers to Alaska as well as new residents, who come for its excellent transportation system, mild weather, and central location.
Anchorage properties pool is 94,822 residential properties including Anchorage new homes. The median age of real estate in Anchorage is 1977. The average Household size is 3.19 people. 4% are one bedroom homes, 19% are 2 bedroom homes, 46% are 3 bedroom homes, 24% are 4 bedroom homes, and 5% are 5+ bedroom homes.
Anchorage Mortgage Statistics
Homes With No Mortgage 14%
Homes With Mortgage 86%
First Mortgage Only 74%
First & Second Mortgage or HELOC 12%
Anchorage Area Real Estate Tax
Anchorage Real estate Tax: Median Real Estate Taxes (2000) were $2,523 comparing to 1999 Median Family income $ 63,682. Compare to USA median yearly Real Estate Tax $1,300 and USA median Family Income $42,000 (1999).
Anchorage School District: Children make up 29.1% of Anchorage population. Anchorage has 75,871 under 18 years old residents, or 0.58 kids per one worker, or 0.8 kids per one household.
Anchorage Real Estate & Anchorage Home Ownership
Most residents of this city have come from elsewhere in the United States. Many came to work in the oil fields. Alaskan Native peoples comprise about 8% of the population. The city also has a growing population of Asian and Hispanic residents.
There are 21809.06 or 23% one person households, 30343.04 or 32% two person households, and 17067.96 or 18% three person households in Anchorage, Alaska. Median residents age is 32.4, Senior citizens (65+) make up 14,242 or 5.5%% of Anchorage population.
There are 131,228 workers (over 16 years of age) in Anchorage. Of these, 89% drive to work. Approximately 2.02% of workers in Anchorage take public transportation. An estimated 2.66% walk to work.
Median Anchorage homeowner’s housing expenses are 20.9%
Crime in Anchorage (2003), crimes per 10,000 residents per year
Violent Crimes 67
Aggravated Assaults 43.91
Property Crimes 449.74
Motor Vehicle Thefts 45.99
Invest in Anchorage Properties
When making a decision about buying real estate in Anchorage Alaska area, you should consider following statistical data:
Near Medium City
Near Large City Seattle, Washington
Anchorage Zip Codes 99501, 99502, 99503, 99504, 99505, 99506, 99507,
99508, 99513, 99515, 99516, 99517, 99518, 99529, 99530, 99540, 99599
Anchorage Area Codes 907
White population 72.23%
African-American population 5.84
American Indian & Alaskan
Hispanic (of any race) 5.69%
Median Family Income (1999) – $ 63,682%
Population Below Poverty Level – 7.18%
Adventurous travelers are always looking for something new, and to meet this need, in recent years there has been a something of a new form of tourism growing in the state of Alaska. Several historically productive gold mines have created facilities to bring in prospectors and tourists to see and experience the remote gold country of the Alaskan wilderness and find their own nuggets. Comfortable facilities and some luxuries allow the traveler to experience the wild backwoods of Alaska without the hardships of the pioneers. The mine owners provide the necessary equipment and help so that everyone finds some gold. Both experienced hands as well as new prospectors are given an opportunity to experience a new environment and potentially make some spectacular finds.
There are a number of operators beginning to offer this type of unique recreation, including the Moore Creek Mine in the Iditarod area, the Gaines Creek Mine and several others. This new tourism offers significant benefits to both the mine owners and the visitors. Visitors have the opportunity to potentially find some very significant gold while experiencing the breathtaking beauty of the Alaskan wilderness. Visitors at both Moore and Gaines have produced some very large nuggets and even for those who do not set records, many visitors find the largest nuggets they have ever found. On the other hand, mine owners gain a new and unique source of financing for exploration of their property and other operations. Initial funding to get a project off the ground can be difficult to acquire and tourism offers a very unique and creative way to gain those first seed monies for a mining property.
In June of 2006, I had to opportunity to visit and sample the primitive Alaskan mining experience for myself – I went to visit the Moore Creek gold mine. I’ve been prospecting as a hobby for 30 years, but it was an experience like nothing I have ever done before. There is no practical access to the mine, except by air. I went in with 9 other guys – we met in Anchorage, and flew together to the little Alaskan community of McGrath. From there, our bush pilot, Mike Stewart, was able to transport us and our gear from McGrath out to the mine in three trips. The flight into the mine with the Mike was really exciting with spectacular views of the surrounding country. I have never flown in a little single engine plane before, so this was a real first for me. The runway in McGrath was paved, but out at the mine it was just dirt and grass. In such a little plane you really get the feel for how fragile the plane is and how the dangerous outcome can be if you have any problems. Mike is a very safe pilot and there were no problems at all.
It was so strange to me that it was never dark the entire time I was there. I think the sun set around 12:30 at night, and rose again around 4:15 am, but it was like dusk the entire time in between, so it was never really dark enough to see any stars. Evening campfires were held in what seemed to be essentially full daylight. This gave those participants who desired to do so hours of extra time in the evening to prospect. One night I went to bed at 11 pm and the sun was shining through a window in my tent right into my eyes – that’s something I’d never experience at home.
There was lots of wildlife, and beavers, rabbit, birds, wolves, etc. were in or around our camp. We saw moose droppings, but no moose. The only bears we saw were viewed from the air in a plane. However, we did find fresh bear prints in the mud about 150 feet from our tents one morning after it had rained.
The facilities at the Moore Creek Mine are very comfortable with large cots and two men assigned to each roomy tent. The tents are pitched on a flat along side a stream at the site of and old camp marked by original log cabins that are still in use. Tasty and hearty meals were provided each day by camp cook Bob Herschbach, Steve’s cousin.
Moore Creek Mine Owner Steve Herschbach and his partners have recently leased out the property to a Vancouver mining company, Full Metals Minerals (FMM-TSX:V) to explore for hard rock deposits on the property. Arrangements are such that this does not impede the ongoing tourist operation. Moore Creek mine is not too many miles from the recent big gold strike at Donlin where Barrick and Novagold have discovered a 28 million ounce gold resource. The Moore Creek property has been only lightly explored for in place lode-gold deposits and may hold significant potential.
While I was up at the mine, a team of geologists from Full Metals was exploring the property, taking samples and mapping the area geology. While it is generally believed that the most likely locations for any gold bearing resources still in place lie within the Monzonite pluton on the hill above the mine and the volcanic rocks adjacent to it, other possibilities were being considered. Future plans for drilling and other efforts will be determined based on the results of the current exploration efforts.
The group I went in with was a really great bunch of guys, but as for me, my luck was as bad as its ever been. I never got my detector over a single piece of gold – I was completely skunked for the entire week. I dug at least 50 targets – all trash. As an example of my luck, one of the last days I went out and crossed a small stream and turned right and hunted some tailing piles, I found only junk targets with my detector. The next day, another guy from the group crossed at the same point, turned left went about 10 feet and found a 2 ounce nugget – that’s just the way the ball bounces. The nuggets are just kind of spread all over in the old mine tailing piles and there is no way to know in advance where they are – so a bit of luck does play a part. On the other hand, Glen, one of the other guys in our group, really had the lucky hand – he got more than a pound of gold during the week, including 5 pieces over an ounce. He worked very hard and his largest nugget was over three ounces in weight. He told me he was digging around 4 trash targets to every one gold target and that was far better results than I achieved. By the end of the week, folks were calling him “Mr. Lucky” – His luck for the week was pretty much the exact opposite of mine.
To try may hand at some other gold mining operations, I started spending part of my time shoveling gravel into a high banker sluice box. I did a bit better there and I recovered one third of an ounce of gold with the high banker – so I at least had some nice Alaskan gold to bring home. The detecting is a hit or miss type of thing, but the high banking and dredging operations offer a surer chance to get some gold. The odds for a spectacular big nugget find may be less, but the gold more sure.
All of that considered, the bottom line is that you don’t have to find a ton of gold to really enjoy and appreciate the remote gold country of Alaska. It was the trip of a lifetime for me – a beautiful and very isolated, unspoiled country different from any I’d ever experienced. Great guys to prospect with, good folks in charge of the operation, good food and a comfortable camp all added up to a trip I’ll never forget.
There are many different options available to persons searching for a home loan. If a strong relationship has been established with a bank or credit union, buyers may choose to secure financing with these institutions. Because buyers are typically concerned with getting the best rate possible, they may seek the help of a mortgage broker. If looking for a mortgage broker in Alaska, home buyers should proceed with caution. Currently, mortgage brokering is not regulated in the state. Moreover, Alaska mortgage brokers are not required to work from a physical office. For this reason, buyers may encounter a dishonest broker. Still, there are ways to find a good broker.
Who are Mortgage Brokers?
Some people confuse mortgage brokers with lenders. However, the two businesses are very different. While a mortgage lender provides the funds for a home loan, a broker’s responsibility involves finding the right lender for their clients. Home buyers have different needs. For example, a buyer with an ideal situation may have a 20% down payment, good credit, and funds to cover closing costs. On the other hand, another buyer may have limited assets for down payment and closing, and a terrible credit report. Brokers work with different buyers, and locate the best loan according to each situation.
Multiple Home Loan Options
A good mortgage broker in Alaska will have access to a variety of home loan programs. There are literally hundreds of programs to assist buyers. If applying with a traditional lender, the institution may only offer two or three loan options. Buyers who do not meet the loan requirements are not approved. On the contrary, a good mortgage broker will work diligently to get a client approved. They will have relationships with various lenders who offer non-traditional home loans. Moreover, a good broker will help their client obtain the best rate possible.
Mortgage Broker Referrals
Because Alaska does not regulate mortgage brokers, it is easy for someone with a criminal history (fraud, stealing, deceit, convictions, etc.) to operate a brokerage company. Thus, home buyers become susceptible to unfair practices. While there is no way to completely protect self from fraud, getting a referral from a real estate agent or previous buyer may lower the odds of being ripped off. Before choosing a mortgage broker, ask for recommendations.