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Housing Prices Shoot Up!

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What all you should consider when buying a new home

When buying a house, many people have checklist of what they want included in the property itself.  But there are a few additional things home buyers should consider looking into before making their final offer.  While the house might meet be the home of your dreams, the surrounding areas and other necessary information should be a priority as well.

Two generation family looking at a house for sale

Two generation family looking at a house for sale

Crime Report: Look into the crimes that have been reported in the area. Check the sex offender’s registry.  Be aware of your surroundings

Schools: Every school is given a rating and when having school ages children; it would be beneficial to know what school your child will be zoned for.

Surrounding businesses: How far away is the closest grocery store or gas station? Be pleased with the businesses you will have to frequent.

Noise Factor: Is the home close to the freeway? Airport?  Will outside noise be a big issue for you?

Visit home at different times of day: The home will look different at night compared to the day.  Check out the street lighting.  Pay attention to any additional outside noise that might occur at night.

Consider the commute: Try to find multiple ways in and out of the neighborhood you are considering in order to get to and from work.

Street Parking: While this isn’t always an issue, some neighborhoods have only certain areas for vehicles leaving very little space for visitors or additional cars.

Drive around the neighborhood: Are there a lot of kids? Are the yards nice? Most HOAs take yards and community cleanliness into consideration but it is also a great thing to look into yourself.

Remember to be happy with your surroundings and the perfect house will be there for you.

Saving for a down payment

Purchasing your own home is one of the greatest and most rewarding experiences you can have. However, one of the hardest parts of becoming a home owner is getting your down payment together.  While there are many different loan types available, several require a 20 percent down payment.  Trying to get that money together can be difficult and will require a few years of commitment.

Here are a few tips and tricks to help to reach that 20 percent.

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Calculate what you can afford– First thing you need to decide on is your budget.  How much do you want to spend on a house and what will the down payment be?  What is the ultimate goal?  Knowing what you need and having a set number in mind can help ease anxiety and help jump start the savings.  I can help you calculate numbers to see what best suits your life.

Budget– Decide how much money needs to go to specific areas in your life (bills, grocery, gas, play) and any overage can allow for a small amount to go towards your savings goal.

Open an account– Have one account that is strictly for your down payment.  Do not borrow money from this account for other expenses.  Budgeting in a small amount to be deposited in monthly will help slowly, but surely, build the account.  When bonuses are given, put these directly into this account.

Splurge less– Try to skip a coffee run and instead prepare your drinks from home or eat in more than dining out.  These few dollars every day can add up quickly over the years.

Visualize the goal– While it may take years to get the whole 20 percent together, visualizing and setting steps towards that goal can be very rewarding.  Setting small yearly goals (save $2000 this year) and meeting them will very satisfying to see how much closer you are to owning your new home.

Don’t force it– Remember to be consistent and in time it will all work out.  It may be a long process but in the end, you will be happy to have that 20 percent down, with lower payments and a great investment.

 

Spring Fever Comes Early for Las Vegas Home Buyers

While most of the country is huddled indoors for the winter, Las Vegas, Nevada enjoys spring-like weather in February which makes it the perfect month to start looking for your next home. Whether you are looking for a dream home in Summerlin, a ranch in Henderson, or your first home in North Las Vegas, there are a number of things you can do to make your home buying process run smoothly.

Couple signing financial terms for future property

  1. Credit Report: Take a look at your credit report and address any issues that may be affecting your credit score. The higher your credit score, the better the rates will be for your loan.
  2. Loan Officer: Select a loan officer. Ask you friends and realtor if they recommend a lender but don’t feel that you have to go with that person if they are not a good match. Select an experienced loan officer with a stellar reputation who is personable and available to answer your questions as they come up.
  3. Loan Fees: Make sure your lender fully discloses all fees. Some lenders tack on a loan origination fee or processing fee where others do not. No need to spend money on unnecessary lending fees. Make sure to compare rates when selecting a mortgage lender.
  4. Get Prequalified: Serious home buyers begin their search by becoming prequalified with their lender. Being prequalified tells a prospective seller that you are can obtain a loan. If you decide to make an offer on a home, the seller will consider prequalified buyers more strongly than others which comes in handy when a home receives more than one offer. Besides, when you are prequalified for a loan, you know exactly what you can afford, which helps narrow your search.
  5. Down Payment: Depending on the type of loan you get, the amount of money needed for a down payment will vary. FHA and VA loans offer smaller down payments but a conventional loan may be your best option if you have 20 percent to put down on the home. A 20 percent down lets you avoid Private Mortgage Insurance or PMI, (which protects the lender should you fail to make payments).
  6. Make an Offer: Chances are, you will find just the perfect home for your needs and taste. When that time comes, feel assured that you’ve taken every step to prepare yourself for home ownership. Your Realtor® will walk you through the offer process until you and the seller reach an agreement and have a contract.
  7. Complete the Home Loan: With a contract in place, your loan officer will get to work gathering various documents and processing your loan to get you the best rate possible. Before you know it, you’ll be handed the keys to your new Las Vegas home!

 

To Buy or Not to Buy

Rental prices in Las Vegas have been steadily recovering over the last few years, making home ownership a goal worth considering. In fact, a one-bedroom rental will likely cost most people an average of at least $119 more per month (nearly $1,400 annually) in 2016 than in 2009. The price of two bedroom rentals are also steadily rising.

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When rental prices increase, folks often find themselves in the position where paying rent no longer makes sense when compared to the tax and quality of life benefits of owning your home.

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So what are the benefits of home ownership? Quite a few, as it turns out:

  1. Despite the turbulence of the past decade, home ownership builds wealth over time. The only catch to this proven rule is to make sure you buy a home you can afford. Sure your income is likely to increase with promotions and pay raises, but so will costs of goods and services.
  2. The mortgage tax deduction reduces your tax obligation. Interest makes up the largest part of your mortgage payment, especially during the initial years of home ownership. By deducting the interest from your tax obligation, you get to keep more of the money you make which means huge tax savings for most folks.
  3. Property taxes are also deductible. In addition to interest, you also get to deduct property taxes from you gross income. In fact, you can even deduct some closing costs including any points or origination fees charged on your loans.
  4. Additional financial benefits accrue. Whether you take out a home equity line of credit (on which you can again, deduct the interest payments), build equity by making home improvements, or by renting out the property when you upgrade to a new residence, home ownership offers the opportunity to have more financial flexibility both now and in the future.
  5. Making home, well, home. Have you dreamed of having a private resort-style backyard for your family to enjoy? How about a beautiful spa-like bathroom? When you have your own home, part of the fun is decorating and furnishing the home to match your personality and desires. Buying a home in Las Vegas, Nevada can turn that dream into a reality.

The truth is, the benefits of home ownership are countless. Home is where lasting family memories are made and where good friends gather.  But most important of all: home is where the heart is.

New TRID Rules Affect Home Buying Process

What’s new in the homebuying process? If you’ve met with a Las Vegas home mortgage lender recently, you were likely introduced to TRID. The acronym TRID represents a new rule that combines previous disclosures contained in the Truth-in-Lending Act (TILA) with the Real Estate Settlement Procedures Act (RESPA) to create a single set of rules, the TILA-RESPA Integrated Disclosures (TRID) Rules.

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By combining several disclosure forms into one, TRID involves a new three-page Loan Estimator Form and a five-page Closing Disclosure, effectively decreasing the forms required to purchase a new home. This move is intended to improve compliance with mortgage laws as well as to provide better transparency and accessibility of information for homebuyers.  The rule went into effect on October 3, 2015, and is applicable to all types of home loans except:

  • Home Equity Lines of Credit (HELOC’s)
  • Reverse mortgages
  • Mortgages secured by a mobile home or not attached real property

The substantive changes to the rules include the following:

  • Application
    • Upon receipt of the application, the clock starts ticking for disclosure delivery as long as the loan officer receives the following: Name, Income, Social Security Number, Property Address, Estimated Value of Property, Mortgage Loan Amount Sought
  • Timing
    • The Loan Estimate must be provided to the buyer by the loan officer no later than three days after receiving the loan application and no later than seven days before consummation (closing).
    • The Closing Disclosure must be received by borrowers no later than three business days before consummation.
    • In the event of revisions to the original application, a revised Loan Estimate must be received by borrower(s) no later than four days prior to consummation.
    • The revised Closing Disclosure must be received no later than three business days before consummation if any of the following takes place: APR is not accurate, loan product changes, or a prepayment penalty is added.
  • Fees
    • Variances, formerly known as tolerances, will limit fees that can be charged.
  • Providers
    • A lender must provide a separate list of services to the borrower so the borrower is able to shop and identify at least one available provider for each service no later than three days after receipt of a loan application.
  • Closing Documents
    • The creditor provides the Closing Disclosure, including the HUD-1 information that the settlement agent was previously responsible to provide.

What Does All This Mean to the Buyer?

OK – enough of the technical language! What does TRID mean in reality for homebuyers?

  1. The rule alterations are intended to help borrowers understand their obligations and the obligations of the sellers, lender, Title Company and other partners easier; hence, it is called the “Know Before You Owe” rule.
  2. You will have more time to review the Closing Disclosure, prior to closing, so you can have all your questions answered.
  3. Closings can take longer. A closing period of 45 days or longer will often be necessary.
  4. Within four days of making the official loan application, you must confirm your intent to proceed to your lender.
  5. Electronic signatures will be used regularly. These signatures will reduce the wait periods lenders must comply within the new rules.
  6. A waiting period of three days between when you receive your closing documents and your closing is required and excludes Sundays and legal holidays.
  7. Turn all information into your loan office without delay. All items must be finalized within 10 days of your closing date to avoid a delay in the closing.

With all these changes, it’s great to know one thing will stay the same. Sydnee Johnson Las Vegas Home Loans will provide the best customer service combined with the best rates of any other loan officer in the area. With unmatched experience and attention to detail (not to mention a great personality!), Sydnee Johnson is a favorite among Greater Las Vegas area Realtors®, Title Companies, and borrows. Take a look at her reviews and see why!

Interest Rates Impact Your in Home Buying Options

If you’re in the market for a new home, chances are you pay close attention to home mortgage interest rates, and for good reason.  When it comes to maximizing your affordability while keeping your monthly payments low, a low-interest rate offers increased flexibility in the way you approach home buying.

With interest rates poised to go up soon – even modestly – the most obvious impact will be on your monthly payment. Of course, higher interest rates result in higher monthly payments which generally means that the value of the home you purchase is generally less if you have a strict budget you need to follow. Small increases in interest rates, however, seldom become a deal breaker for new home buyers and they shouldn’t.

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There are other important factors to consider when thinking about home loan interest rates:

  1. Today’s interest rates have remained at extraordinarily low levels for several years now. However, even a 5% or 6% interest rate is still very low by historical standards. Whatever the rate is when you buy, if you have an experienced loan officer, they will work with you to lock in a rate at the lowest rate possible. But don’t be surprised to see interest rates fluctuate day to day; there is no precise way in knowing when they will be the lowest in a particular month or week.
  2. Because interest rates are low and are expected to remain relatively low for some time, there will probably be plenty of homes on the market for a while. That’s because when interest rates are low, current homeowners are more willing to upgrade or downgrade so they have more incentive to sell in order to benefit from low interest themselves. That means you’re likely to have a nice sized inventory from which to select your next dream home.
  3. Higher interest rates mean you can recover a larger portion of your monthly payments in the form of a mortgage interest tax deduction. Document improvements along the way of homeownership as many improvements will be relevant to your taxes when you sell by lowering the amount of capital gains or taxable income you realize if you decide not to reinvest the earnings.
  4. Generally speaking, you come out ahead buying a home over renting, especially if you are going to stay in a location for two or more years. One rule of thumb is that it takes at four to seven years to gain enough appreciation for homeowners to come out ahead. By then, chances are your interest rate will play a role in how long you decide to stay in your home, along with other factors such as changes in income, job changes, and changing family needs.

Now is a great time to buy a home but if you have a longer timeline for home purchasing readiness, you can breath and get your financial picture in order. The interest rates aren’t going to skyrocket overnight and chances are you’ll be able to get a great rate when you’re ready to buy in the next year or two. But don’t wait too long. As interest rates rise, fewer owners will be motivated to sell so the inventory of available home will likely decrease.  Happy home hunting!

 

How to Hire a Rock Star Home Loan Officer

When it comes to buying a new home, many folks rely on the old adage: Location, location, location. But when it comes to selecting a loan officer to process your home mortgage, the mantra is all about experience, experience, experience. Along with experience, find a loan officer with superior customer service, an array of loan options to best meet your unique situation, and of course, compare rates and fees.

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Experience, Experience, Experience

When it comes to making what is probably the biggest single investment of your life, you want a home mortgage professional that has significant experience in the real estate industry, particularly in processing residential home loans. A loan officer who has closed hundreds to thousands of loans is more likely to understand the ever-changing legal and regulatory requirements and the best ways to save you money than someone new to the field.

An even bigger advantage is having a loan officer on your team with significant experience in your local market. With knowledge of your local real estate market, your loan officer will be able to maximize all available resources to support you in becoming prequalified so you can begin your home search. Once you’ve made an offer and have had it accepted, she’ll be right there ready to process the loan and have you ready for closing

Customer Service Counts

Despite the excitement that comes with buying a new home, there is also no shortage of stress. An experienced loan officer that is available and accessible to answer your questions is a must.

Deadlines are part of the home purchasing process as is collecting all types of personal financial information. A skilled loan officer will guide you through the process to make it as clear and stress-free as possible. Some qualities to look for when selecting your loan officer is whether she is dependable, friendly, approachable, patient, thorough and supportive. You’ll know you’ve found a good match when your loan officer says, “don’t worry – we’ve got this,” and you believe her. Because they understand the stress associated with home buying, an excellent loan officer will do everything in her power to bring you solutions rather than problems and will be an asset to other members of your team such as your Realtor®.

Read about your loan officer by reviewing their website, Facebook and other social media channels. When you see a plethora of happy customers, you can be pretty sure they are happy for a reason. Same thing with negative reviews.

Array of Loan Options

To make sure you get the best loan for your unique needs, seek a loan officer able to process a variety of different loan types including conventional, FHA and VA loans. They should also be able to offer privately funded loans which increases their flexibility to make non-traditional loans such as Second Chance Loans for buyers who recently experienced a short-sale or foreclosure or whose home does not qualify for conventional financing.

Compare Rates and Fees

One thing about having a loan officer you can trust is that you don’t have to fear hidden fees or charges. If you are looking for a loan officer, one of the first things to ask is about their fees including the home origination fee. This fee can range from zero to up to one or two points, where one point is equal to 1 percent of the loan (one point on $100,000 is $1,000, etc.).  Origination fees are generally the largest fee to be concerned with but other unnecessary fees may also crop up on the day of closing and catch you off guard. That won’t happen if your loan team is doing their job.

Similarly, an experienced loan officer will have the most current information on the best time to lock in your interest rate. Locking an interest rate, in all fairness, is always about 90 percent guesswork but where trends or forecasts exist, a skilled mortgage loan officer will generally know and will do their best to get you the lowest rate possible.

What is Private Mortgage Insurance?

Private mortgage insurance, or PMI, is a major consideration for mortgage applicants. PMI has a bad reputation among buyers. It can add hundreds of dollars to your mortgage each month, while adding little perceived value. But a closer look reveals why lenders require PMI in certain cases, how it benefits the buyer, and strategies you can take to avoid it.

Mortgage InsuranceWhy lenders require PMI

Private mortgage insurance is exactly what it says: it’s a special type of insurance policy that protects the mortgage company in case the buyer can’t make their payments. Whether it’s a medical crisis or a job loss, issues arise all the time that cause owners to default on their homes. What role does PMI play for buyers? It allows them to purchase homes when they have less than the requisite 20% for a down payment.

What does PMI cost?

The cost varies based on a number of factors. But one source estimates that PMI costs approximately $30 – $70 per $100,000 borrowed. On a $500,000 home, you might expect to pay as much as $350 per month in private mortgage insurance costs. It’s important to understand that the costs differ and speak to your lender about your specific situation. Better credit scores and larger down payments typically qualify for better premiums.

FHA Loans, VA Loans, and PMI

If you’re a veteran or you’re going for an FHA loan, you won’t be required to purchase private mortgage insurance. Instead, you’re required to purchase government insurance. FHA loans have an upfront fee and then monthly premiums. VA loan insurance is typically paid as an up-front fee, with no ongoing premiums.

Avoiding PMI

The best strategy for avoiding the need for PMI is saving up enough money to put a 20% down payment. If you’re unable to accomplish this, talk to your lender to see if you qualify for programs that might lower or eliminate the PMI requirement from your loan.

On private loans, your PMI requirements will “fall off” the loan once your loan to value ratio hits 80%. The longer that you pay on your mortgage, the more equity that you build. Once you’ve reached 20% equity in your home (or, stated differently, paid off 20% of the principal of your mortgage) your PMI policy will usually be canceled. It’s important to read the fine print on your mortgage and your policy to confirm this.

Paying PMI sometimes enables buyers to purchase homes when they don’t have a full 20% down payment saved up. Waiting longer while you save or looking at alternative lending programs may help buyers avoid this cost. If you’re interested in learning more about loan options for your situation, contact Sydnee Johnson today to arrange for a personalized consultation and learn more about how private mortgage insurance may affect your specific situation.

How Las Vegas Lenders Support Real Estate Agents and Buyers

Today’s top Las Vegas lenders are making it easier to buy a home in the city. The relationships that lenders have – with real estate agents, with processors, and with funders – can make the difference between a rejected application and one that closes smoothly. Recently I received this wonderful note from one of the real estate agents that I work with:

PartnershipsWhat an amazing team!  Sydnee and Jennifer were true professionals in every sense of the word on a transaction that was rejected by another lender.  Not only did they manage to process, obtain underwriting approval, draw documents and fund this transaction in 12 business days…they successfully worked with my client to keep them calm and engaged after being strung along by another lender for over a month.  And the benefits didn’t stop there…the clients locked in at a rate .25% lower than the previous lender and ZERO lender fees!  At the closing table, the clients expressed how grateful they were for Sydnee and Jennifer and Premier Mortgage Lending.  They were all smiles!

The lessons here are important for real estate agents working on more challenging financing situations or buyers that have faced a rejection. Don’t give up!

Packaging is essential

Particularly for customers with challenging credit histories, the way that you document and package your application is essential. The right lender will look at your larger financial picture, and help match you to programs and products that increase your chances of approval. Whether your application needs a personal letter with a narrative explaining what occurred to bring your credit scores down and how you’ve gotten back on track or extra documentation to show that you’re solvent despite being self-employed, your lender should customize your application the first time around to help you successfully obtain financing if at all possible.

Communication and customer service matter

Many buyers have an experience with lenders that doesn’t prioritize customer service. While you are asking a bank or institution for a loan, they in turn are getting your business. All communications should be timely, clear, and professional. If you have concerns, your lender should work with you to keep the lines open and resolve those issues. Any delays should be promptly addressed and the path to resolution made clear. Choose a lender that will make you feel appreciated, even if you’ve had a bad experience before or feel like you’re in a weak position with your application.

If you need help obtaining financing to buy a home, contact us at Sydnee Johnson Las Vegas home Loans today. Arrange for a personalized consultation and learn what funding options may be available to you through a customer focused Las Vegas lender.

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