GK: Local lenders can provide financing offering a variety of loans.

The most popular in today's market are FHA and VA financing. A buyer can purchase a home by way of a FHA loan with as little as 3.5% down-payment. Through VA, a no-money-down loan is available to those who qualify. In general, maximum loan limits for FHA and VA loans in Hawaii are: FHA: owner-occupied, one unit $938,250; VA: in general, $625,500. Sorting through and making sense of all the stipulations and guidelines can be intimidating and confusing, but a qualified loan specialist can assist you in finding and obtaining the best financing for your new home.

According to the National Association of Realtors, the current inventory of houses available for purchase is more than three times its usual levels. Today's market with its high inventory, low mortgage rates, and FHA and VA financing makes this an excellent time to buy, so let's start looking for your first place!

Got a real estate question for Gail? Email questions to: Gail@FidelityPropertiesHawaii.com

I recommend Sara and Wells Fargo in Boise for your home lending needs. You can find more great information about her and what I do at http://www.findboisehomesforsale.com

Find out more about Sara at http://www.wfhm.com/sara-garcia/index.page

1. Keep an eye on your balances.

The higher the total balance as a percentage of your total credit limit, the lower your score will be. You should not exceed 30% of your total credit limit.

2. Late Payments.

Make at least the minimum amount due as soon as the bill arrives. Better yet if you can pay them off in full. To help ensure your payments are there on time. Pay your bill with automatic bill payments online.

3. Know what's on your credit report.

Get a copy of your credit report before you apply for a loan. Check it for accuracy if there is something that is not yours on it contact the reporting agency to dispute any inaccuracies. You are entitled to one free report per year per agency get you can get one from all three agencies at www.annualcreditreport.com. Learn more about your rights at www.ftc.gov/credit

4. Do not close old accounts.

Remember above I talked about your credit limit. By closing old accounts you are lowering your total credit limit. If you have transferred balances from one card to another keep the card active till you have paid off the second one. Doing this will ensure you stay within the 30% rang talked about in item 1.

5. A mix of credit types is best.

Lenders like to see you manage a mix of revolving debt, such as credit cards and installment debt like car loans. Old accounts are better than new ones. Do not rush out and open a bunch of credit cards or loans just to have a mix.

One of the good things about Gift Fund Programs or Down Payment Assistance Programs, they are usually not credit score driven. So what do the lenders look for when evaluating a buyer?s financial condition to make a loan? Lenders for the most part are looking for accountable and disciplined buyers who will repay their monthly house note.

Remember bankers are people too, and they know and understand that people go through hard times just like some of us do every now and again. What they are most concerned about however, is our attitude as well as the actions we take when we run into hard times. Do we call our creditors and make repayment arrangements or do we run and hide hoping the bill will go away instead of working something out?

If we run and hide from our creditors - the people to whom we owe money, then the banks will believe that if we get into hard times with our house note we will run and hide from them as well. Therefore the purpose of the credit report evaluation is to provide an overview of how we have paid our bills in the recent past.

According to several lenders, loans made in conjunction with the Gift Fund Program such as FHA backed loans require at least twelve (12) months of on time payments to be considered an acceptable credit risk.

The second aspect of financial requirements for buying our home involves evaluating whether or not we have a sustaining income to make the monthly house note.

As buyers we will have to provide the lender with detailed financial information on all sources of income. Lenders cannot discriminate on the source of income. We will also have to provide detailed information on all our debts. The lender will then calculate the ratio between these two and make a determination on the maximum purchase price our income and debts could sustain. Once this is done we may start looking for the home we would like to buy and in the price range that we can afford.

It is a wise practice for all prospective homebuyers to do the following: 1. Get a free copy of their credit report from all three credit bureaus. www.annualcreditreport.com

2. Review the report for accuracies and inaccuracies. 3. Contact a reputable & competent real estate professional or mortgage lender who will be able to guide you through the process of correcting errors if any on your credit report.

3. Those with non traditional credit are often allowed to use alternative credit such as utility accounts, cell phone accounts, insurance accounts, rent payment history etc. In summary, lenders look at your bill paying habits and your income to decide if you are ready to purchase your home.