Recently in Las Vegas, FHA Loans have become the primary mortgage loan for the purchase of a home. There are three primary reasons for this:
FHA is not a credit score driven program
FHA's allows some flexibility with their guidelines
Exceptions can be made and approved by the FHA underwriter directly
Fannie Mae and Freddie Mac's conventional comforming loans have become extremely hard to qualify for and increasingly costly, especially here is Las Vegas. Without 20% down payment, conventional loans require a 720 credit score and low debt ratios.
FHA has stepped in to supplement the Las Vegas market with an affordable, flexible, consumer friendly option. If you are in the market to purchase a Las Vegas home, you should look at an FHA Loan as an option.
There are many good reasons to choose an FHA loan for your Las Vegas purchase, especially if one or more of the following apply to you:
You're a first-time homebuyer (You don't have to be)
You don't have a lot of money to put down on a house
You want to keep your monthly payments as low as possible
You're worried about your monthly payments going up
You're worried about qualifying for a loan
You don't have perfect credit
You're worried about what will happen if you fall behind on your payments
You may use an FHA-insured mortgage to purchase or refinance a new or existing 1-4 family home, a condominium unit or a manufactured or mobile home (provided it is on a permanent foundation).
FHA Home Loan Features:
Lower Interest Rates: FHA loans have competitive interest rates because the Federal government insures the loans
Smaller Down Payment: FHA Loans require a 3.5% Down Payment (This can come from a family member, employer, or a charitable organization as a gift)
Easier qualification: Because the mortgage loan is insured by FHA it is easier to qualify if you have blemishes on your credit or there are exceptions on your loan application
Less than perfect credit: You may even qualify with a bankruptcy in the past
If you can not qualify on your own, you may use a family member, or close family friend, to qualify as a co-signer
FHA Home Loan Requirements:
Owner Occupied Properties Only
Single Family Residences, 2-4 Unit Properties, Planned Unit Developments, Manufactured Homes and Condo's are eligible properties for an FHA Mortgage Loan
Qualifying Debt-to-Income Ratios of 43% (Back End) or higher with Automated Underwriting approval
Sellers & interested third parties may contribute up to 6% for closing costs.
2 Months Reserves (Not every borrower needs 2 months reserves, however it helps to qualify. These reserves may come in the form as a gift)
FHA Upfront Mortgage Insurance Premium:
With all FHA insured loans there is an up front mortgage insurance premium (UFMIP) equal to 1.25% to 2.00% of the loan amount that is paid at closing. This mortgage insurance premium can be financed in your loan amount, so you are really paying it over the life of the loan. A majority of consumers take this route.
Example: Mortgage amount: $100,000 X 1.5% = $1,500 can be paid at closing. Or if you finance it into the loan @ 6.5% for 30 years = $ 9.48 per month.
FHA Monthly Mortgage Insurance:
On loans with a term, or life of the loan, greater than 15 years and a loan-to-value ratio of 90% or greater (meaning you are borrowing more than 90% of the value of the home), you will pay an annual mortgage insurance premium of 0.5% to .55% of the loan amount in monthly installments.
Example: Mortgage amount: $100,000 X 0.5% = $ 500/12 months = $41.67 per month
What kinds of loans does FHA offer?
Fixed Rate Loans: A majority of FHA loans are fixed rate loans. In a fixed rate mortgage your interest rate will stay the same throughout the life of the loan. The advantage of this type of mortgage is that your payment will never change. Currently FHA offers 30 Year Fixed and 15 Year Fixed Terms. The 30 year Fixed Rate FHA Mortgage is very popular in the Las Vegas and Las Vegas, NV area right now.
Adjustable Rate Loans: FHA offers an adjustable rate mortgage commonly known as an ARM Mortgage. FHA uses the 1-Year Constant Maturity Treasury Index (1 Yr CMT the most widely used index, to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.) Currently with the way the Las Vegas, and Las Vegas Real Estate markets are performing I do not recommend this type of loan product.
Purchase/Rehabilitation Loans: There may be a Single Family Home that you see that would be terrific for you BUT it needs some repairs. FHA has a loan for rehabilitating and repairing this type of property called the SF Rehabilitation Loan program (203k). The mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. With all of the foreclosures in the Las Vegas Valley this may soon become a popular FHA home loan.
If you have more questions about a FHA Home Loan in Las Vegas, feel free to contact me directly at 702-808-8328 or visit my Las Vegas FHA Home Loan webpage. Serving Las Vegas, North Las Vegas, and Henderson, Nevada.
The VA Loan is one of the best kept secrets in lending. In the past, many 100% Financing options over shadowed this mortgage loan, but recently we have seen a tremendous resurgence especially in the Henderson and Las Vegas, NV area. Because Clark County, Nevada is classified as a Class 5 "Soft Market" by Freddie Mac and Fannie Mae. The VA Home Loan is the only true 100% financing option available in the Las Vegas Mortgage Market. This loan is quite simple to understand and qualify for.
VA Home Loan Features:
No Down Payment
No Income limit
The Loan is Guaranteed by the Government (This is the banks reassurance that in case of default they may still be able to recoup their money)
No upfront or monthly Mortgage Insurance
This loan may be assumed by a qualifying person
VA Home Loan Requirements:
Military veterans, active duty person's, and members of the national guard or selected reserves are eligible
Qualifying persons must submit VA Form 26-1880, along with proof of service (DD Form 214, a statement of active duty, or proof of participation in the national guard or reserves) to the VA Eligibility Center (I can help you with this using our ACE System).
Based on the applicant's length and type of service, VA issues a certificate for each person determined eligible to apply for a VA guaranteed home loan.
A VA Funding Fee is required to be paid to the VA (This fee can be financed into the Mortgage Loan)
Automated Certificate of Eligibility (ACE) System:
Gone are the days of having to request a Certificate of Eligibility through snail mail. Now, our office has direct access to the VA's Automated Certificate of Eligibility (ACE) system. In most cases, we can pull a Certificate of Eligibility in a matter of minutes.
VA Funding Fee:
A VA funding fee is required to be paid to the VA for funding the loan. This fee covers administrative costs to the VA for providing this benefit. This fee is a percentage based on the total financed mortgage loan amount currently the VA funding fee is:
VA Funding Fee Chart (Current as of 11/05/2007)
Funding Fee %
Reservist FF % *
Purchase Loan Zero Down (includes HARMS)
2.15%
2.4%
Subsequent Loan (incl. HARMS)
3.35%
3.35%
For example, if you are active duty military and have not previously used you benefit before, you are financing $100,000 for the purchase of a new home with the VA Zero Down Home Loan. Your VA Funding Fee (2.15%) would be $2,150.
Do I always have to pay the VA Funding Fee?
No. If you have a Service Related Disability or for some refinances the Funding Fee is waived.
Do I have to use the Zero Down Benefit?
No, you can also use the benefit with 5% or 10% down or more at a discounted funding fee.
So, as long as I am a qualified Veteran can I get a Zero Down Home Loan?
Well, you still have to qualify for a VA Mortgage Loan like you would a regular mortgage loan i.e. employment qualifications, income qualifications, provide ability to repay, etc. but the VA makes many exceptions for it's Veterans.
What is the Las Vegas VA Loan Limit?
You may use the zero down benefit up to a $417,000 purchase price. The VA will insure a portion of the loans for home purchases made up to $1 million. However, the qualifying veteran is required to cover 25% of the difference above $417,000.
For example, if you a buying a Las Vegas home for $480,000 with a VA Loan, the VA will fully insure the first $417,000 and then they will insure the remaining $63,000 as long as the Veteran comes in with 25% or $15,750 of that $63,000.
I a Veteran and I think I am eligible for the VA Zero Down home Loan but I have more questions. What do I do now?
I would be happy to answer questions. You can call me at 702-808-8328. You can also visit my website to get you pre-approved for a VA Zero Down Home Loan. Serving Las Vegas, Henderson, and North Las Vegas, Nevada.
Over the course of the last couple of months, I have witnessed changes to the lending process that have been more severe than all of the other changes since I have been in the business. This is in part due to fear...but let's face it, this is mostly due to money. When financial entities lose money...things change! When they lose large amounts of money...things change quickly!
I want to introduce you to the new world we live in...The Full Doc World. We as a Mortgage and Real Estate Professionals have a choice to make at this very moment, learn to live in our new world or find another career. You see in a Full Doc World, everything is on the table. Just when you think your done, something else may come up. Is it convenient, NO! Is it reality, YES! If you choose not to face this reality, you will be doing a great disservice to your clients and yourselves!
Below I have outlined what a Full Doc World really means. Many of the items that I outline below are not going to sound very fair. Please understand that these are not specific to my company, this is an industrywide tsunami that is mowing us down as we sleep! Consider this post as the high rise hotel that may help keep you dry. If there is a broker or bank that is not currently playing by the following rules, they will start VERY SOON! Unfortunately, it may be at the tail end of one of your transactions which may cost you a closing or a client. Prepare yourselves folks because if you thought it was tough before, it is about to get a whole lot tougher!
I myself had to come to a realization recently. This change was going to happen whether I wanted it to happen or not. When I had my epiphany, a great big smile came over my face. I GET IT!...and because I GET IT, I will be better prepared to move forward in this world from here on out. My buyers and the Real Estate Agents that I work with will stand a better chance of getting their transactions closed. Some of these buyers and agents may walk away in the near term, but when their realization comes, they will understand and hopefully come back. Below are the dark and gruesome truths as I am finding them out. Read with caution and understanding...and welcome to The Full Doc World!
Buyer's Income and Asset Documentation:
These are the two most important pieces to a Full Doc loan. Please don't get these confused with the income and asset documentation from 1 year ago or even 3 months ago. A simple Verification of Employment and 1 paystub WILL NOT work in our new world. This documentation is required and must undoubtedly support the buyers income. If there is a discrepancy, the err will be on the side of caution. If a guideline states that overtime income must be supported by twelve months on the job, it needs to be twelve months, not 11 months and 25 days. There are FEW if any income exceptions in this world. For assets, we need to see them and they will be verified. There are no letters of explanations as to why a buyer's name only appeared on the most recent statement or exceptions for reserve accounts being a dollar short. In addition to these unnerving requirements, when these documents are provided to underwriting, EVERYTHING INCLUDED IN THESE DOCUMENTS IS FAIR GAME. Underwriters will not look the other way, if there is a large deposit that they can not identify, it will be conditioned to be explained AND supporting documentation provided.
Stated Income and Reduced Doc Loans:
These loans are all but gone. The FBI has reported that misrepresentation of income has been the most prevalent form of mortgage fraud over the last couple of years. Mortgage Banks and Lenders have seen their stated income portfolios deteriorate in terms of performance. Mortgage Insurance companies will no longer insure stated income loans in Clark County. In a Full Doc World, these loans exist but are rarely used!
Prior to Closing Conditions:
Expect quite a few of these conditions, prepare your buyers that they will be coming. If we catch these items on the front side, the conditions will be fewer on the back side. Before we could "wait to see if the underwriter will request it", now we must expect for it to be a need to close the transaction. If they don't catch it in the beginning, the second set of eyes will catch it in the middle. Should both miss it, rest assured the third, fourth or fifth set of eyes WILL NOT! Does it sound daunting, well it is! Some buyers may feel like they are being "singled out" and are continually being asked for more and more conditions. Please let them know that while they are special, they are not unique! All buyers will be going through the same level of scrutiny that they are.
Appraisals, Inspections, and Re-Inspections:
All are on the table and will be requested. "As is" is not an acceptable answer to an FHA inspector. "We don't do repairs on our foreclosed properties" is the mantra of an asset manager that does not want to sell his clients properties. If there is a safety, security, or collateral issue on the appraisal or any inspection involved in the transaction, expect the underwriter to request it to be corrected. This was not the norm 1 month ago today, but it is the new norm in a Full Doc World!
Closing Times:
What all of these things add up to is increased closing times. Before, 30 days was considered an eternity for a closing to occur. The new reality is that closing will best be determined by the work that Mortgage and Real Estate Professionals do in advance. Docs will be held for the i to be dotted, and funding will be postponed until the t is crossed. In a Full Doc World, don't worry about how quickly you are going to get paid just be grateful that you are receiving a check.
Our positions as Mortgage Professionals have just become astronomically more difficult. Your career as a Real Estate Agent has now become increasingly more dependant on aligning yourself with a true Mortgage Professional. Experience and knowledge will once again be King! Those that choose not to conform WILL FAIL. The ability to successfully identify landmines, hurdles, and challenges before they come to be is the most important factor in closing a successful transaction. This WILL inevitably separate the best from the rest! Welcome to a Full Doc World!
The Las Vegas REDC Lender Foreclosed Public Home Auction is coming up soon. The previous REDC Auction last year was hugely successful. There are many Properties slated to be auctioned at this event!
I have been named an Auction Mortgage Loan Officer for the Preferred Auction Lender and am able to issue pre-qualification passes to enter the auction. If you are interested in attending, or if you are a Real Estate Agent and have a client that is interested in attending please contact me directly so that I can pre-qualify you or your client.
You can also use my secure online Quick Pre-Qualification Form. In the comments section of the form, be sure to note that you would like to attend the auction. Keep in mind because it is a secure form, it takes about 30 seconds to load so please be patient.
Once qualified, you will receive an auction pre-qualification form that serves as your entry, as well as an auction guide that was assembled by my team from the last public auction. This guide was developed based on the events that transpired from the last public foreclosure auction. It has been designed to help you and your clients navigate the controlled chaos that is a public auction and will help you avoid common pitfalls.
I will also be at the auction pre-qualifying late comers and once properties are auctioned off, I will be submitting the mortgage loans for those that have won properties.
For more information about the auction or to view properties, register, and more please visit the US Home Auction website. You can also call 1.800.690.REDC. When asked about pre-qualification just say you have already been pre-qualified by an auction lender and contact me right away!
I spend a large part of my day analyzing my business and the Las Vegas Real Estate and Mortgage Industry in general. I keep my eye on trends and attempt to figure out why the trends are happening. One trends that has particular intrigued me is Reverse Mortgages.
Today, Reverse mortgages are likely the only segment of the mortgage industry trending upward. This upward trend doesn't show any signs of slowing anytime soon as:
15 million senior households meeting eligibility requirements
More than 50% of senior's net worth is in home, an illiquid asset
There is $4.3 trillion of senior home equity in the nation today
Estimated 78 Million babyboomers begin turning 62 this year and will continue for next 17 years
Based on these figures, this will soon become a large market for Mortgage Originators especially in Las Vegas. As always, when there is a new trend you can rest assured that there will be unscrupulous originators trying to exploit the trend and make a quick buck.
I can not stress enough that if you or some one you know are in the market for a Reverse Mortgage, seek out an expert in the field with a reputable company. If you are unsure where to find one, feel free to contact me directly and I can assist you.
Many Las Vegas residents that fit into the Jumbo Loan category, loan amounts greater than $417,000, know the woes of high Jumbo Loan rates. Since the beginning of the Mortgage Crises, Jumbo Loans were hit hard as Wall Street all but stopped buying these loans on the secondary market. This led to a quick increase in Jumbo Loan Rates which many banks and lenders are still passing onto their clients.
This has now come to an end. Recently a national bank has identified certain Jumbo Loan scenarios in the Las Vegas market as strong performers. Based on this research, they have decided to capture as much of this market as possible.
In order to do so, they have dramatically reduced their 30 Year Fixed Jumbo loan rates. Las Vegas area residents can now secure a 30 Year Fixed Jumbo Loan with an interest rate in the high 5% range.
Based on Jumbo rates in the last couple of years, these rates can save a signinifcant amount on your monthly payments. These loans can be secured as high as 80% LTV with jumbo Loan limits as high a $5.5 Million.
If you have any questions, please feel free to contact me directly.
I like to research loan programs and scenarios I am not familiar with. One of those programs happens to be Reverse Mortgages. For those of you that do not know, Reverse Mortgages sometimes carry a very negative connotation with them.
What is a Reverse Mortgage?
A reverse mortgage enables homeowners aged 62 and over to convert part of their home equity into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is reversed. Instead of making monthly payments to your Mortgage Bank, as with a regular mortgage, your Mortgage Bank makes payments to the you.
Types of Reverse Mortgages:
Single-purpose: Offered by some state and local government agencies and nonprofit organizations.
Federally-insured: Backed by HUD and known as Home Equity Conversion Mortgages (HECMs).
Proprietary: Private loans that are backed by the lenders that develop them (SimpleEquity).
Key Features of a Reverse Mortgage
All borrowers on title must be at least 62 years of age.
Property must be the borrower's primary residence.
No income requirements and no monthly mortgage payments.
The loan accrues interest as long as borrowers live in the house. Borrowers make no payments on the loan, but are obligated to pay taxes and insurance (T&I).
Borrowers can take funds in a line of credit (LOC) or a fixed monthly payment.
70% of borrowers take the LOC and 50% of those take all available funds at closing.
65% of borrowers pay off an existing mortgage.
Note rates are based on an index plus a margin.
Loan is due and repaid upon permanent move out of borrower. This includes any of the following:
Sale of property
Consecutive period of twelve months away from residence
Death
Principal, interest and service fees are repaid upon loan maturity.
Loan is non-recourse; borrower or heirs can never owe more than the appraised market value at time of repayment.
There are two types of Reverse Mortgages, the Line of Credit (LOC) and the traditional Reverse Mortgage. The LOC allows you to draw money when you choose to. The standard Reverse Mortgage pays monthly based on the set up of the original loan.
Is It a Good Loan?
As with ANY loan program, if the borrower can benefit from the loan, it is a terrific product. If you are on a fixed income and paying $700 per month for your mortgage, that can take a big dent. If you set up a reverse mortgage, you can not only eliminate your monthly mortgage payment but also get a monthly payment from the bank to you! You can see how that would benefit a lot of 62+ homeowners.
This Sounds Right for My Scenario, Now What?
The most important thing to do is to contact a REVERSE MORTGAGE SPECIALIST. Do not just contact the first name you see in the phone book. The Mortgage Professional that you contact should be specially trained and have experience writing these mortgages.
If you have any questions or need the recommendation of a good Reverse Mortgage Specialist in your area, please feel free to contact me directly.
Your Mortgage Partner for Life,
Rey Gallegos Mortgage Loan Officer
Serving Las Vegas, North Las Vegas, and Henderson, Nevada.
If you are in the market to buy a home in Las Vegas, I have two very important things to tell you;
You have made a great decision!
Find yourself an honest, reliable and most importantly EXPERIENCED Loan Officer.
First, I believe you have made a terrific decision to buy a Las Vegas Home. Although Las Vegas has been one of the hardest hit areas in this declining market, many of the factors that drive this market have not changed. I have listed some of those key factors below:
Nevada is one of the most Corporate friendly States. Many companies are relocating and bringing massive work forces with them.
Tourism is what drives our local economy and it is still booming!
Because of the tourism, commercial construction and casinos are still going strong.
Every time a casino opens its doors, it creates many thousands of new jobs in ever sector.
Job opportunity continues to bring 4,000 to 6,000 new residents to Las Vegas every single month.
I could go on but I am sure you get the picture.
Once you have made a decision to buy in Las Vegas, your next step should be to find a quality Loan Officer and get Pre-Approved! The current mortgage market is in shambles. Changes are coming down daily from Freddie Mac, Fannie Mae and all of the major lenders. It is important that you find an experienced Loan Officer that KNOWS what the current market is doing and can anticipate changes that are going to soon happen. No longer should you trust just anyone with the financing of your most valuable asset, which is your home.
In the past couple of years, too many homeowners played "pin the tail on the donkey" with their Mortgage Lender and LOST! Before you move forward with any lender your should ask a couple of very important questions:
How long have you been in business?
What are your strengths and weaknesses when it come to lending?
How long has your company been in business in Las Vegas?
How do you seen the Las Vegas market in the next 2 to 5 years?
Can you offer every loan program that is currently available?
If you get push back from the Loan Officer, RUN! That is not the Loan Officer for you. Any good Lender should answer every question with a solid answer and not have to think about it. Our jobs are to know what is going on in the current Las Vegas market. We should also know what programs are available and if we offer them or not. Do your homework and make sure that the Loan Officer has the experience and knowledge to make things right for you.
If you have any questions about buying a home in Las Vegas or the current state of the mortgage or Las Vegas market feel free to contact me directly and I will be happy to help you.
It seems as though every day the number of viable refinance programs for Las Vegas homeowners decreases. So it is up to us as Loan Officers, to help home owners reconnect with great refinance programs that were not considered before BUT have always been around.
A prime example of this is the 85% FHA Cash Out Refinance. You may be asking, 85% Cash Out in Las Vegas? Yes, in Las Vegas!
For those of you that don't know, Las Vegas has been classified as a "Soft Market". In not so many words, Mortgage Banks are more conservative with their guidelines in "Soft Markets". Meaning if the maximum guidelines for a loan program are 100% Loan-to-Value (Amount of the Mortgage Loan versus the Value of the Home in Terms of a Percentage), in a "Soft Market" they would be reduced by 5% for a Maximum of 85%.
FHA Loans are not affected by the soft market policy. So FHA will allow a Cash Out Refinance up to 85% of the homes value even in Las Vegas. With interest rates being so low these days, FHA Loans offer a tremendous savings in your monthly mortgage payment. The key items that determine eligibility for an FHA Cash Out Refinance are as follows:
FHA will allow a cash-out refinance of up to 85% of the appraiser's estimate of value subject to meeting all of the following eligibility conditions:
You must be able to qualify for an FHA Mortgage
The subject property must have been owned by the borrower as his or her principal residence for at least 12 months preceding the date of the loan application.
No 30 day late payments in the last twelve months
1- or 2-unit homes only
Existing Second Mortgages may remain in place, but subordinate to the FHA first mortgage, regardless of the total indebtedness or combined loan-to-value ratio, provided the homeowner qualifies for making scheduled payments on all liens.
Any co-borrower or cosigner being added to the note must be an occupant of the property. Non-occupant owners may not be added in order to meet FHA's credit underwriting guidelines for the mortgage.
As I said before this loan has been around for quite a while but has not been used. This FHA Refinance Loan could help many Las Vegas homeowners. Should you have any questions about this or any other refinance, please feel free to contact me directly.
I have always been a big fan of VA Loans. In the Las Vegas area, VA Loans have become extremely popular for many reasons. First, the VA has not instituted a 5% Soft Market Policy in Distressed markets. What that means is that it is becoming increasingly more difficult to buy a home with no money down. Unfortunately, Fannie Mae AND Freddie Mac have put Las Vegas into this category.
However, with your VA Loan benefit you can still use a purchase a property with NO Down Payment. This is exciting for the Men and Women that have served our country.
So many people know about buying a home with your VA Benefit BUT most people don't know that they can refinance their home into a VA Loan weather or not their current loan is through the VA. Some outstanding key options for a VA Refinance are:
100% Rate and Term Refinance available if you currently have a Non VA Loan
90% Cash Out Refinance Available
Interest Rate Reduction Refinance Loan (IRRRL) available that will lower the rate of your current VA Loan with very little qualifying
I have been a huge advocate of government loans for Las Vegas properties in recent months. If you have any questions please feel free to contact me directly.
FAST LAS VEGAS MORTGAGE QUOTE!
Your complete Henderson & Las Vegas, Nevada Mortgage & Home Loan Blog. Written by an experienced, reliable Nevada Mortgage Loan Officer. Blog topics include; FHA Loans, VA Loans, Buying a home, Refinancing your current mortgage, Online Mortgage Application, Mortgage Quote, Home Loans, Henderson, Las Vegas, and Nevada News.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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