Las Vegas Mortgage Info
LAS VEGAS MORTGAGE INFORMATION
The most important step in buying your Las Vegas home is to secure a mortgage. The mortgage industry has changed dramatically over the past several months, with some loan programs no longer available and certain loans now offering higher limits. Las Vegas Properties can help you determine which loan program best fits your situation, and we can help you to find the most favorable rate and terms. The lowest interest rate on a mortgage is not necessarily the “best deal.” Costs for a loan in Las Vegas can vary greatly, so it is important to compare the overall cost of the loan that you choose. We can help you decide if lower monthly payments are your best choice, or if an adjustable rate loan will benefit your situation. In the Las Vegas real estate market, we advise buyers to get “pre-approved” for a mortgage before they find a home to purchase, as Sellers will generally not accept offers from a buyer who does not have loan approval.
From our website, you can check on current interest rates and find out about the pre-approval process. This is a great way to get started in your search for Las Vegas homes. You can find current mortgage information at Mortgage 101.
Fixed Rate Mortgage
A fixed rate mortgage has the same interest rate and monthly payments throughout the term of the mortgage. The payment is calculated so that the entire mortgage will be paid off completely at its maturity date. Maturity dates can be from 10-40 years, but the most common are 15 year or 30 year loans.
Fully Amortizing ARM
The most common ARM (Adjustable Rate Mortgage) is a fully amortizing ARM. The monthly payment son this loan are calculated to pay the entire mortgage balance at the end of the term. The term is usually 30 years, but the interest rate adjusts each year. There is a maximum interest rate that can be charged for this type of loan and the adjustments are tied into one of several economic factors.
Interest Only ARM
An interest only ARM requires monthly payments of interest only, while principal is not paid down. So, at the end of the term, there will be a balloon payment of the entire principal amount. Interest only mortgages can fixed rate or adjustable rate.
With a Conventional Loan, the buyer must have a 20% down payment, or must pay Private Mortgage Insurance. The insurance policy takes the place of the buyer’s “equity” in the property, offering protection to the lender in the case of a default. Credit scores, debt to income ratios, employment history are all important factors that the mortgage company will consider when “qualifying” a buyer for a mortgage. There are several excellent Las Vegas mortgage companies who offer conventional loans; we can help direct you to them and help to evaluate their programs.
An FHA Loan is a government loan that can be used to purchase single family and multi-family (up to 4 units) properties. The FHA and HUD does not loan money, but guarantees the loan that is made by an approved lender. Qualifying guidelines for FHA loans are less stringent than some Conventional loan programs. FHA will allow a home purchase two years after a bankruptcy and three years after a foreclosure if the borrower qualifies for the loan. The FHA loans allow a higher debt ratio than other loan programs, self employment is accepted and less than two years on the same job is acceptable.
FHA loans offer buyers a loan with minimal down payment (less than 3% of sales price); the down payment and closing costs can be a gift, and the seller can contribute up to 6% of the sales price toward the buyers’ closing costs. Las Vegas home sales have seen an increase in FHA loans this year, as the loan limits have increased. Nevada FHA loan limits have increased to $200,160 for a single family home and $384,936 for a fourplex in Las Vegas. Qualifying for an FHA loan includes employment, income, credit score and debt ratio.
In addition to the FHA Loan, there is an FHA 203(k) loan program, designed fro home buyers who are purchasing homes that need renovating. This is a great program especially for those buying Las Vegas “fixer-upper” and foreclosure properties. You can borrow extra money from the FHA, over and above the appraised value, for repairs to the property. You must use one of the approved FHA lenders for this and all FHA loans. The FHA 203(k) program can be used to purchase single family homes and multi-family 4-unit homes, as long as you live in one of the units. There are certain restrictions for condominium repairs that an FHA loan consultant can explain further.
If you are a veteran of the armed forces, you might be able to take advantage of a Veterans Affairs (VA) Loan. There are benefits to a VA loan such as no required down payment and the ability to have the seller of the property pay most of the buyer’s closing costs. The buyer will pay a VA funding fee, which is currently 2.15% on no down payment loans for a first-time use and 3.3% for second time buyers with no down payment. There are some buyers who are exempt from a VA funding fee. You can learn more about the exemptions by visiting the VA Home Loan Department. The amount of the buyers’ closing costs can generally be added to the price of the home, as long as the appraisal supports the increased price. The law requires that the Veteran intends to personally occupy the property as his or her name. The Veteran must either personally live in the property or intend, upon completion of the loan, to personally move into the property and use it as his or her home within 60 days after the closing date.
The VA guidelines recognize legally married spouses of qualified Veterans as co-signers on VA loans and can include their income for qualifying purposes. The guidelines will allow for more than one eligible Veteran(s) to purchase a home. If more than one eligible Veteran is involved, VA divides the entitlement charge equally between them, if possible. A non-veteran can co-sign for a VA loan, but VA will not fully guarantee the loan. Because of this, many mortgage companies will not originate loans for non-eligible co-borrowers.
The Veterans Benefits Act of 2004 changed the maximum guaranty amount for a VA loan; the limit for 2008 is $104,250. This is 35% of the 2008 Freddie Mac conforming loan limit for a single family residence of $471,000. What that means to you, as a VA buyer, is that you can finance a home priced up to $417,000 in Las Vegas with no down payment. You must be able to qualify for the mortgage, based on income, debt, and credit score. (There is also a Super Maximum VA Loan which has a $1million limit.)
Las Vegas Properties works with several lenders who specialize in VA loans.
It is important, when making an offer to purchase a Las Vegas home, to structure the offer correctly so that the Veteran buyer is paying only fees which are allowable by VA. An experienced real estate broker will be able to determine if the appraised value of the Las Vegas property will warrant an increase in price to cover the closing costs. That is another reason to use the services of an experienced Las Vegas real estate broker when trying to purchase your home.
VA loans have increased this year in Las Vegas, as many Las Vegas homebuyers see the benefits of using their VA eligibility. Sellers in today’s Las Vegas real estate market are willing to contribute to the buyers’ closing costs in this market, which is different from the past several years.
You will find a complete Glossary of Mortgage Terms on our website that will explain all of the mortgage terms that you will hear form lenders. This is great information when looking for a loan.
This is a great time to buy Las Vegas real estate! Prices are lower than they have been in 8 years and interest rates are still very attractive. Let Las Vegas Properties find the loan programs that work best for you. Call us today at 1-888-876-8383 or email terrilvp@cox.net.
