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Mike and Kim Getlinger

Mike and Kim Getlinger are shown with their children, from left, Amelia, Charlie and Maxwell. The family had to rent for three years to establish a job history to get another mortgage.

U.S. Air Force retiree Mike Getlinger and wife, Kim, have hit the homeowner triple lottery: three mortgages in 11 years, all at historic lows of 5 percent or less.

In 2002, the Getlingers bought their first home in South Carolina with a 3.78 percent, three-year adjustable mortgage to keep payments low and because the military would soon move them.

They sold for a profit in 2007 just before the housing crash and purchased their second home near Fort Sill, Okla., with a 5 percent, 30-year Department of Veterans Affairs loan.

By Memorial Day, the Getlingers will move into their third home in Billings near Skyview High when they close on a 30-year fixed loan at 3.25 percent. That’s pretty much free money after inflation.

And because they prepaid a previous VA home loan, the Getlingers need no down payment.

“It makes it nice, so we can sink the rest of the money into finishing the landscaping,” he said.

But to get their last killer-rate mortgage, the Getlingers and their three kids had to move in with his family for a few months and then rent for three years.

Getlinger retired from the Air Force with a military pension in 2010, but lenders wouldn’t give him another mortgage until he’d been at his new job for two years, just one hurdle borrowers must clear nowadays.

Getting pre-approved, fixing any glitches in your credit rating and saving for a healthy down payment are the three keys for landing a mortgage, local lenders said.

Some borrowers get pre-approved and then inexplicably run out to buy a boat or car, which changes their debt-to-loan ratio, now capped at 43 percent.

“When they do stuff like that, we say, ‘I guess you’d rather live in your car than your new house,’ ” said First Interstate Bank loan officer Robyn Barta.

After an epic housing crash hit Billings in 2008, today home buyers must meet tougher standards to seize the gift of historically low interest rates.

The days of “liar loans,” when borrowers could state their income without documentation, are long gone. And lenders are less forgiving of bankruptcy, foreclosure and collections.

“If you’re willing to lose a home once, you’re probably at higher risk to lose one again,” said Bruce Parker, senior vice president at First Interstate Bank.

Community banks like those in Montana didn’t cause the housing crash; Wall Street banks largely did. But local lenders are dealing with the regulatory aftermath.

Local mortgages must meet federal guidelines so they can be sold on the secondary market, mostly to Freddie Mac and Fannie Mae, which now are government-owned companies.

Come June 1, costs rise significantly for FHA loans.

Previously, home buyers without a 20 percent down payment could take out a FHA loan with less money down as long as they bought mortgage insurance, payments that would end when they built up some equity.

Now FHA borrowers are stuck paying monthly insurance payments of 1.35 percent of their mortgage for the life of the loan.

On a $150,000 mortgage for 30 years, that’s a big bill of roughly $52,000, said Valley Federal Credit Union mortgage loan officer Dana Song.

Insurance on conventional loans is cheaper and the payment still can be dropped after about eight years, she said, making these loans a better deal for buyers with smaller down payments.

“Insurance costs probably would be in the neighborhood of $5,000 to $5,200 if they went conventional,” Song said. “FHA is not the wonder loan it has been.”

And on Jan. 1, when more of the Dodd-Frank financial reform bill kicks in, the paperwork pile will grow, as it has for the past 20 years.

Borrowers will need more documentation that they can repay the loan. And lenders will need more justification about why they are approving the mortgage.

“Buying a home and closing, it is probably the most stressful transaction that 90 percent of the population goes through,” Parker said. “And it just adds to the difficulty and the challenge of getting things done, done right and on time.”

Despite the hurdles, local home purchases are on the rise.

The number of mortgage loans at First Interstate Bank has remained steady, but the mix has flipped.

In April 2012, 68 percent of the loans were to refinance existing mortgages and 32 percent to purchase a home, Parker said. Last month, that gap closed: 53 percent to refinance and 47 percent to purchase a home.

Since she started making home loans 13 years ago, Yellowstone Bank vice president Pam Ivanoff has seen 30-year fixed interest rates fall from 8.25 percent to around 3 percent. The lure of cheap money and the traditional upswing in homes sales in the springtime are helping make homes in the affordable $180,000 to $220,000 range hard to find.

“We’re seeing people just building because they can’t find a home they want,” Ivanoff said.

Brenda and Tim Woodard of Lockwood recently spent a weekend hunting for a better home in the $250,000 range in Lockwood. They found three homes they liked, but by Tuesday, it was too late.

“By the time we were making some calls back, one Realtor said, ‘I’m sorry. We already have offers,’ ” Brenda Woodard said.

Judging from the popularity of a recent no-fee home refinancing offer by Valley Federal Credit Union, many homeowners are opting to stay put, while taking advantage of the bargain-basement interest rates.

For six years now, returns on traditional investments have stayed so low that even financial institutions, like ordinary savers, can’t make money.

So Valley Federal Credit Union decided to build up its mortgage portfolio.

“With the forecast of interest rates being low for awhile, you can’t even get close to 1 percent,” said Steve Bruggerman, vice president of administration. “Even a low 2.99 percent refinancing interest rate was more attractive.”

Delinquencies and foreclosure rates in the Billings area and most of Montana remain low, which helps the housing market.

“Montanans, in general, pay their bills,” said Wayne Nelson, president of Stockman Bank Billings.

However, Nelson said many high school and college students don’t understand the importance of credit scores yet, which can affect the next generation’s ability to buy a home.

“If they screw up on a cellphone bill, that can mess them up and they don’t realize it,” he said.

Billings, a city of more than 100,000, has grown by about 6,000 in the past few years and Yellowstone County’s April jobless rate dropped to 3.9 percent, considered nearly full employment.

The hot energy plays in western North Dakota and the tar sands of Canada are driving up home sales and local rents for workers and their families who want to live near, not in, the oil fields.

“Knock on wood. This one looks like it will boom for a while,” Nelson said.

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Business editor for the Billings Gazette.