The Basics Of Buying A Home

Anyone who may be looking to purchase a new home or refinance their current home should have a thorough education on certain aspects of the mortgage industry. No one wants to make an uninformed decision, especially when it comes to making such an important financial investment.

First thing’s first, let’s talk about the money. Remember back when you were a kid and you wanted that special brand of sugared cereal, the newest toy or game? If your mom was a savvy shopper she’d say “Wait until it goes on sale”. Because we’ve all heard of this phrase on so many occasions, we have all learned to live by it. We are attracted to the words sale, rebate and bargain. We’re also attracted by discounted prices. We love the idea of obtaining something that is valued at a higher price, but not having to give up an arm and a leg to get it.

So when you’re in the market for buying a home, as a buyer, you want to make the best financial decision possible. That would be buying a great house but not necessarily having to spend your life savings on it.
When you’re looking to purchase a home, you have to first seek out a loan (in most cases from a mortgage broker or bank). Once approved, the broker or bank will give you the loan amount to purchase the house. You then pay money back to the bank until your house is paid off.
The best time to purchase a home is when interest rates on mortgages are low. This is because, you are paying less money back on what you initially borrowed in order to purchase the home.

What do interest rates have to do with purchasing a home?

Interest rates affect your monthly payment, by determining how high or how low these payments will be. For example: The house you have your eyes on is $220,000.

As you can see, a small increase or decrease in your interest rate can have a serious impact on your monthly payments. The lower the interest rate, the more affordable your monthly payments have the potential to be.

When is the right time to finance a home?

The time to finance a home for the best rate could be now, as mortgage rates across the country have reached a low over the last 16 months at 4.12 percent, according to Freddie Mac.

This number is quoted for a 30-year fixed rate conventional mortgage, and since Jan. 1, people have been finding themselves able to afford about 8 percent more of a home in terms of quality. Las Vegas, in particular, may be experiencing their home rates flattening out as the median home price reached $200,000 in August, which is an almost 10 percent increase from the same time last year, according to a recent report from the Greater Las Vegas Association of Realtors (GLVAR). This is good news for home owners and buyers as the economy continues to recover from the recession that severely impacted the value of property nationwide.

Although property values increase as pricing begins to level, low mortgage rates are not necessarily available to everyone. Those who will see the lowest rates would be considered prime lenders, defined by Freddie Mac as a lender with a credit score over 740 and who can offer a 20 percent down payment. This, however, should not discourage those from financing a home.

If you’re interested in mortgage rates in the greater Las Vegas area, please contact Valley West Mortgage at 702-696-9900 or