When applying for a loan, now more than ever, lenders are looking closely at a borrower’s FICO, or credit score. This score is based on hundreds of different inputs, taken together to assess a borrower’s credit risk. The higher the score, the greater the likelihood of qualifying for a loan, often at better terms. Understanding how a FICO works can be key to positioning yourself to qualify for a loan, so lets take a closer look at the different components of a FICO, and what you can do to maintain and improve yours.

Not surprisingly, payment history makes up the biggest component, 35% of your score. Payment history is a measure of how you have handled repayment in the past, and consequently your likelihood of default in the future. The key to improving or maintaining a high score here is simple – always make payments on time, even if an item is in dispute. Worry about the refund later.

Next up comes the amounts you currently owe, comprising 30% of your score. This measures how “maxed out” a borrower is. It is not about the dollar amount you are borrowing as much as the dollar amount relevant to the amount of credit available to you. This is where not closing out old credit cards or lowering credit limits works in your favor. Having access to credit, but not necessarily using it, is a good thing.

Third on the list, at 15%, is your length of credit history. Experienced users of credit are rated higher than new users. So if you have a credit card with history – don’t close it out. Show the lender you are used to handling credit.

Recent attempts to secure new credit comprise 10% of your score. If you have recently applied for a new credit card, for example, this is often seen as a bad sign – a borrower in search of more credit. An application for a mortgage is treated differently, and does not affect your FICO in the same way.

Lastly, also at 10% is the type of credit you carry. Mortgages and student loans, for example are considered “better” than credit and charge cards, as generally their balances can only go down, eventually to zero. Store charge cards are the worst – their interest rates tend to be higher,and suffer under the FICO model.

The City of Salida recently announced a draft master plan for the upgrade of Centennial Park, home of the Salida Hot Springs Aquatic Center. Recent improvements to the hot springs, including renovation of bathrooms, changing facilities and private soaking pools have seen an increase in patronage, and a corresponding increase in revenue for the City. A redevelopment of Centennial Park would seem to be the next, logical step in this renaissance, the end result of which will be a focal point and gateway to Salida for the benefit of both residents and visitors alike. The plan proposes, amongst other things, improved parking and access, the addition of outdoor soaking pools, upgrading and expanding playground facilities and relocation of the current recycling center.

At the other end of town, it would appear that years of negotiation and planning in conjunction with the Union Pacific Rail Road is bringing the Salida Siding Trail project closer to fruition. This plan, if completed, will see UPRR sell fourteen acres of land it currently owns on the north side of the Arkansas River to the City, enabling the City to expand its riverside trail system, provide increased picnic and angler access to the river, and solve the long standing trespass issues associated with crossing the unused tracks to access the trail system on S Mountain. The creation by Great Outdoors Colorado of the River Corridors Initiative has provided the City with the opportunity to secure funding for the project.

Both of these initiatives are part of the City’s overall Parks, Recreation, Trails and Open Space Master Plan, which seeks to maximize the opportunities for the expansion of public recreational opportunities both within the city, and surrounding areas. The time and resources invested in this plan play a significant role in understanding why Salida and its environs are recognized as a great place to live, work, and recreate.

Multiple signs are pointing to the likelihood that we have reached the end of the housing crisis. An easing of credit restrictions, low interest rates and an improved economic outlook are all contributing factors.

According to DSNews, the surest sign that we are through the worst of the downturn in the housing market are the indications that banks are finally freeing up more money for mortgage loans. While credit score requirements still stand at the 700 mark – the same as 12 months ago – this stabilization is backed up with an increase in the amount a bank will lend based on a borrower’s earnings, and an increase in the loan-to-value ratio, the latter factor the surest sign yet of an easing in lending restrictions.

The other side of this coin is increased consumer confidence. There has been a small but steady increase in existing home sales month over month. Low interest rates, an improved job market and record low housing prices are all factors that are combining to drive this recovery. Delving deeper into the figures, a significant number – 21% – of these home sales are investor driven, while there has been a modest decline over the last quarter in the number of first time home buyers entering the market, 31% in december, down 4 points from the previous month.

With foreclosures and short sales predicted to continue at record rates for the next few years, it would seem that the current buyer friendly market will continue for the foreseeable future.

A recent study conducted by the National Association of Realtors reveals that more home buyers than ever, 89% in 2011, took advantage of the services of a realtor to assist in the purchase of their home, up from 69% ten years earlier.

In many ways, this statistic might seem counter-intuitive, given that now more than ever there is a variety of tools and technology available to home buyers. Web sites line Realtor.com, Truila and Zillow, web based apps and FSBO-dedicated sites are all placing more and more information and knowledge at the disposal of consumers, yet the percentage of transactions involving realtors is on the increase.

For those of us in the industry, this comes as little surprise. The more one delves into the home buying process, the more one realizes it can be a complex transaction. While interest rates remain low, and values have fallen, the overall landscape for home buyers has become more confusing. Short sales and foreclosures are becoming more predominant, and with them a whole raft of complex procedures and regulations that make having a knowledgeable expert on your side even more important.

Each year purchase contracts become more detailed and refined, with increased dates, deadlines and obligations for both parties. And then there is the local knowledge that only a local realtor brings. Pictures on a website can only convey so much. Sooner of later you want someone on your side who knows the market, knows the neighborhood, and know the pros and cons of each property.

Consumers are realizing that with an undertaking as significant and potentially complex as purchasing a home, it makes sense to have an expert on your side.

When listing out the reasons why now is a good time to be buying a home, most of us would pretty easily come up with the following: Historically low interest rates make the cost of paying off a mortgage the lowest it has ever been, making owning cheaper than renting. The decline in the housing market over the last few years has created a situation where buyers, for the most part, hold the advantage, as values continue to drop and inventory expands. There are the tax advantages that come with owning your own home. Additionally, the accumulated wealth that comes with the equity appreciation, over time, can make owning your own home a sound long term investment.

These are the tangible reasons. But as is often the case, there are other, less obvious, but no less important reasons, and these are the intangibles of home ownership.

Chief among them is the pride that comes with owning your own home, that doesn’t come with renting. Not only are you making a financial commitment, but also a commitment to the community you live in. Often, the place where we buy our first home is the place we choose to put down roots and start a family. It is also a reflection that your local lender sees you as a person of financial dependability and trustworthiness.

In your own home, you are the boss. You can choose what colors to paint the walls, what flowers to plant in the garden, or whether or not you turn that old shed in the back yard to your painting studio, or a sleep out for when friends come to visit.

Often, it is these intangibles that are the real, meaningful reasons why people elect home ownership over renting.

Of all the reasons to love living here in the upper Arkansas River Valley, high on the list must be the little gem of a ski area twenty miles west of Salida, Monarch Mountain.

Averaging 350 inches of snow fall per year, Monarch has been providing skiers, and lately snowboarders, with a classic Colorado snow sport experience since 1939. Widely regarded as the most affordable and family friendly ski area in the state, Monarch offers everything from beginner friendly conveyor-belt lifts servicing the learner’s runs to double black diamonds and backcountry snow cat tours.  All laid on with an unpretentious, laid back atmosphere.

Over the years I’ve chatted with many people while riding the lifts, and am always struck by the number of regulars who live in counties like Summit, Eagle, Gunnison and Vail, places with bigger, more famous resorts, yet chose to do their skiing and boarding at Monarch. They appreciate the lack of crowds, reasonable prices and friendliness of both staff and other users.

While the locals play their part, another reason Monarch enjoys such a great reputation is through the coincidence of geography. Centrally located on the Continental Divide at the junction of the Sawatch and Sangre de Cristo mountain ranges, Monarch picks up snow from storms tracking out of both the north and south-west. This regular snow fall means it is one of a handful of ski areas in the state not reliant on harder, less forgiving man made snow. Skiing or riding at Monarch is skiing or riding the way Mother Nature intended it.

New Year is not just a time for looking forward, but also reflecting back on the one that was. For many of us, this last year has passed by in a blur. It seems only yesterday, 2011 lay before us like a brand new road, and now suddenly we are speaking of it in the past tense. While we can only use gut feeling to predict the future, a look back at the 2011 market can help us gain a sense of what 2012 holds.

Real estate figures from the Chaffee County Board of Realtors show a market making significant gains in some areas, modest ones in others, matching the feeling of agents in our office that 2012 could well be a productive time for the local market.

Single family home sales, the main driver of the market here, increased nearly 20%, from 216 closings in 2010, to 255 in 2011. In line with this increased demand, average days on market declined, from 256  to 236.

Reinforcing the feeling that we are still in a buyer-driven market, the average sales price declined from $278,466 in 2010 to $254,277 in 2011. Interestingly, the list price to sales price ratio remained steady at 93%, reflecting a growing trend among sellers to adjust list prices downward to more accurately reflect market conditions. New loans remained the most popular source of finance, at just over 50%, a reflection of the attraction of continuing record low interest rates. Cash transactions came next at around 33%, with the balance being made up of FHA, seller finance, USDA and VA loans.

Looking ahead, we are confident of a continuation of this trend for 2012. Interest rates are expected to remain low, and as sellers continue to adjust to the market, we look forward to another satisfying and productive year, as buyers continue to be drawn to the benefits of owning property in the best little county in Colorado.

Well, the sleigh and reindeer are parked up for another year, the elves are taking a well earned rest, and Santa has his feet up in front of the fire at last. At Pinon, as we gaze out our office windows at the beauty of the snow-capped peaks around us, we can also take a deep breath,  wind down 2011 and look forward to a brand-spanking new New Year.

We’re optimists at heart. Despite the best efforts of the media to paint the picture otherwise, there is lots to be hopeful about for the coming year. County-wide, sales tax  revenue is up over last year, reflecting what we are seeing in the real estate market locally. There’s snow in the mountains. That means the ski lifts at Monarch are running, the hotels, motels and restaurants are full, locals are earning and spending paychecks, and snow in the mountains now means water in the river next spring. Our streets are safe to walk day and night, and residents generosity to worthwhile causes knows no bounds.

The mountains continue to soothe and inspire, implacable and real, yet each day different. The sun shines bright in a sky as blue as can be, and through it all the river flows, through our community’s heart and ours too, constant, strong and timeless.

Our wish to you for the coming year is this: may you have the courage to follow your dreams, may each one come true, and may you find your true home, wherever that may be.

Tucked away amongst all the encouraging news currently emanating from the national housing market - existing home sales rising year over year for the fourth month in a row, continued record low interest rates, unsold inventory down to an eight month supply, more first time home buyers entering the market – is one piece of data that should be of concern to everyone – buyers, sellers and those of us in the middle of a real estate transaction, the realtors. That is the continued high rate of contract failures.

Despite these encouraging trends, it seems home sales are still stuck in a narrow range that defies the market indicators, and failed contracts appear to be the leading reason why. This time last year, failed contracts accounted for 8% of those written, now that figure is at 33%.

While having the ability to withdraw from a contract should their position change is an important safety valve for buyers – inspection and loan conditions being two important ones – it seems that an inordinately high number of contract failures are due to loan application and appraisal / underwriting issues.

This is where the value of buyers working with local lenders becomes an important step in ensuring an offer to purchase matures into a successful closing. Nobody understands the nuances of the local real estate market better than local lenders and appraisers. They have a better understanding of what constitutes an effective comparable, how local neighborhoods determine value, which sectors of the market are strong, and the effect that seasonal employment, common here in Chaffee County, has on a prospective borrowers cash flow.

Fortunately, realtors here at Pinon are able to point to a rate of contract failures far below the national average as proof that when it comes to lending, local is better.