homeownership

Whether you’re new to homeownership, or in the process of hunting for your 10th residence – the one thing that most of us have in common is the need for a mortgage lender. (Any recent lottery winners out there? If so, you have our permission to skip this article.) And thank goodness for mortgage loans, because without them, it would take an awfully long time to scrape together the pile of cash needed to buy a home.

One thing that many buyers don’t realize, though, is that much like any other products we buy – the cost of a mortgage loan can vary widely from one lender to another. In fact, mortgage lenders themselves fall into different categories – such as banks, mortgage bankers, and mortgage brokers. For those not in the industry, the assumption is usually that all three of those are pretty much the same. But as real estate professionals who have worked with scores of different lenders, we can assure you, the loans they offer – and the costs they charge to obtain those loans – can be very, very different.

Since the economic downturn and housing market crisis, new regulations have gone into effect (Dodd-Frank) that were designed to assist and protect consumers seeking mortgage loans. One of the benefits to buyers coming soon is the implementation of new loan disclosure requirements (they go into effect nationwide on October 3, 2015).

One other benefit is that many of these laws placed restrictions on the fees that mortgage brokers, specifically, can collect from buyers for a home loan – and that is one of the reasons that all homebuyers should shop around. (Note: Some real estate professionals will guide clients to one particular lender, but there can be reasons for this that may not be financially beneficial to the borrower. They are known as “Market Service Agreements, and New Home Resource does not engage in this practice. Click here to learn more on this subject.)

One local mortgage broker who has taken a consumer-friendly approach with its home loans for Las Vegas valley homebuyers is Premier Mortgage Lending. Taking its cue from the Consumer Financial Protection Bureau’s (CFPB) new “Know Before You Owe” program, Premier Mortgage even created a complementary website, KnowBeforeYouOweNevada.com to help consumers be aware of their rights and options – and to offer plain-language explanations to your home loan questions.

Embracing the concept of ‘mortgage loan transparency,’ Premier Mortgage is one of the few Las Vegas lenders that offers a true “No Fee” home loan – meaning: No Loan Origination, Underwriting Fee, or Documentation Fees, which can literally save a borrower thousands of dollars out of pocket. That can mean the difference between getting the house you want – and the home you love. Or even in your ability to hear the words “Your loan was approved!” – rather than “We’re sorry to tell you . . .”

Shopping around for the right home loan is starting to sound like a pretty good idea now, right? We suggest contacting numerous lenders, gathering their Loan Estimates together, and then comparing them line-by-line. The CFPB has some tips here on how to do that, too.

In your search for the right mortgage lender, it’s helpful to have a good grasp of the terminology, too. Knowledge is power – so we’re going to leave you with a list of 15 lending terms that every homebuyer should be familiar with:

1. Adjustable Rate Mortgage (ARM). A type of loan where the interest rate changes periodically, up or down. Rates change generally according to movement in the financial market.

2. Annual Percentage Rate. The yearly cost of finance charges (interest, loan fees, service charges, mortgage insurance or other items).

3. Appraisal. An opinion of the fair market value of a land parcel and any improvements at a given point in time. This evaluation generally determines what the property would sell for in the current marketplace.

4. Cap. The limit to the amount an interest rate or monthly payment can increase for an ARM; may apply to either each adjustment or over the life of the loan, or both.

5. Closing. The final step in the purchase process when, through a licensed escrow holder (a neutral third party) the payment of the purchase price to the seller is completed, the Buyer’s note and loan agreement are delivered to the lender, and the deed to the buyer and any mortgage (trust deed) are delivered to the county recorder’s office for recordation.

6. Conventional Loan. A mortgage-secured loan that is not insured or guaranteed by a government agency such as FHA or VA.

7. Credit rating. A numerical score formulated by a credit bureau to assist a lender and seller in determining if a potential home buyer is a good credit risk. Your credit score can make a big difference in your costs and interest rate – so take good care of it.

8. Earnest Money. Money the buyer gives the seller to motivate the seller to enter into a purchase agreement with the buyer. These funds are later applied to the purchase price of the home, but are also funds at risk in the event the buyer breaches the purchase contract.

9. Fixed Rate Mortgage. A loan with an interest rate that remains the same for the entire repayment term.

10. Government Loan. FHA: This type of mortgage is backed by the Federal Housing Administration (FHA). VA: This type of mortgage is backed by the Department of Veteran Affairs. The maximum loan amount for these types of loans varies by county.

11. Mortgage Lender. This term includes banks, mortgage bankers, and mortgage brokers. Banks and mortgage bankers are typically ‘direct lenders’ who offer loan programs and services from a single bank. Mortgage brokers have the ability to shop your loan (using a single loan application) with numerous banks and lenders simultaneously to find you the lowest interest rate and/or the best loan program.

12. Equity. The difference between what a home is valued and what is owed on it.

13. PITI. Principal, interest, taxes and insurance; a quick way to reference your combined monthly house payment.

14. Principal. The amount of a loan, not including interest or other charges.

15. Private Mortgage Insurance (PMI). A type of insurance that is usually required by a lender if your down payment or equity is less than 20 percent of the loan value. PMI insures the lender against loss if you were to default on your mortgage.

New Home Resource helps current and future homeowners with all of their Las Vegas real estate needs. Whether your preference is for a newly-built home from a local builder, or a resale property in just the right location, a New Home Resource Realtor® is here to find the perfect property for you. Please contact a New Home Resource Realtor® today at 702-365-1000 or at www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!

It’s no secret that the real estate market has had a tough go of it these past few years here in Southern Nevada. But now, all the data and statistics are gathering to indicate that the housing marketing in Las Vegas is back in action. If you’re wondering what the local perspectives are as to what’s in store for both new and resale homes in the valley, here are some of the notable highlights:

Las Vegas Home Prices Are Up 8% Over Last Year

The Greater Las Vegas Association of Realtors (GLVAR) reports that local home prices and sales stabilized in May 2015 – with the median price of homes sold through MLS rising from last year’s $195,000 to the current median of $211,250. According to GLVAR President Keith Lynam, “Overall, home prices have been stable this year, and demand is steady in our housing market.”

New Home Prices, Sales, and Permits Up This Year In Southern Nevada

As reported by Vegas, Inc. recently:

• New home sales have risen over last year by 8.9%.
• Builders pulled 680 new home permits in May – for a total of 3,289 year-to-date – a jump of 23.3%.

Clark County Unemployment At Its Lowest Level Since 2008

Few things will drive down a housing marketing like unemployment. If people don’t have jobs, they can’t buy. That’s now changing in Southern Nevada, as recent statistics show that area unemployment rates fell to 6.6% – and that’s music to everyone’s ears.

Available Home Inventory Is the Current Challenge

While new home builders are racing to meet demand, it’s clear that one thing needed to balance the market is additional inventory. It wasn’t too long ago that such a statement would have been considered wildly optimistic for Las Vegas. But in a move to address the issue, banks are finally beginning to take action on eliminating one of the last dark clouds on the Southern Nevada horizon – cleaning up the books on foreclosures. In doing so, yet another obstacle to the housing market will be eliminated – and it’s a step in the right direction for the Las Vegas economy.

Indeed, even as prices are stabilized and beginning to climb, consumers are seeing the value in returning to homeownership. With mortgage loans becoming more readily available and low interest rates playing a key role, it’s clear that the housing crisis now in the rear-view mirror and the Las Vegas valley’s economy is once more on the rise.

New Home Resource helps current and future homeowners with all of their Las Vegas real estate needs. Whether your preference is for a newly-built home from a local builder, or a resale property in just the right location, a New Home Resource Realtor® is here to find the perfect property for you. Please contact a New Home Resource Realtor® today at 702-365-1000 or at www.newhomeresource.com. Broker Joanna Piette, and agents Denise Moreno Thrasher, Jessica O’Brien, Evelyn ‘Beng’ Kern, Lance Partin and Kathy Paterniti are all here to help!