First-time home buyers are most likely to receive a cash gift among all buyer types to make a 20% down payment.
You can often qualify for the lowest mortgage rates offered and with a 20% down payment, there is no requirement for PMI (Private Mortgage Insurance)
Mortgage limits are capped at $484,350 except within those high cost areas where homes exceed the national average
High Cost Areas are capped at $726,525 for single-family homes, and multi-unit homes.
Low-down-payment loans also allow cash gifts for down payment. (ie. as little as 3% down)
Down Payment Letter
There are 3 steps that should be taken in order to avoid denial from your lender:
Correctly Written Gift Letter
Documenting the Gift from the Giftor
Documenting the Receipt of the Down Payment Gift
**There may be tax implications for givers of a cash gift for down payment and for the receivers. Everyone's tax situation is different. Please consult a tax advisory for more information.**
If you have questions about a "Down Payment Gift." Contact Us Today! We will be happy to walk you through the process.
What's Affecting The Mortgage Rates Today
Conventional rates today fell considerably today but, do you know what does effect the rates to rise and fall as they do?
The most crucial clues offset each other — Return of investment (Treasury Yield) on the government's debt obligation rose while oil prices fell. Shown below are some factors you might want to consider:
Major stock indexes opened slightly low and flat (neutral for mortgage rates)
Gold prices fell $8 to $1,232 an ounce. (That is not-good for rates because the change is so small. In general, it’s better for rates when gold rises, and worse when gold falls. Gold tends to rise when investors worry about the economy. And worried investors tend to push rates lower)
Oil prices fell another $1 to $67 a barrel (that’s good for mortgage rates today, and nice to have dropped through the $70 threshold — an improvement long-term because energy prices play a large role in creating inflation)
The yield on ten-year Treasuries fell 1 basis point (1/100th of 1 percent) to 2.86 percent. That is good for mortgage borrowers because mortgage rates tend to follow Treasuries
CNNMoney’s Fear & Greed Index (Tool that is comprised of 7 key market indicators) remains at 46 (out of a possible 100). That is still in the “neutral” range. Normally, “fearful” investors push bond prices up (and interest rates down) as they leave the stock market and move into bonds, while “greedy” investors do the opposite
Predictions indicate for the year 2018 we should only see less than four rate hikes in 2018. So if your looking to purchase soon contact us today! And keep an eye on the markets!
We're striving to make the applicate process more streamline by offering services that are more automated and user friendly.
FHFA increases conforming loan limits for a 2nd straight year
Loan limits to match rising home prices
On Tuesday, the Federal Housing Finance Agency (FHFA) that the maximum conforming loanlimits for mortgage to be obtainedce in 2018. The 2018 maximum conforming loan limit for a one-unit property will be $453,100, an increase from $424,100 in 2017. This allows home buyers to purchase a home without resulting in a Jumbo loan with higher interest rates.
For areas in which 115 percent of the local median home value exceeds the baseline conforming loan limit the maximum loan limit will be higher than the baseline loan limit. The maximum loan limit in those areas as a multiple of the area median home value, while setting a "ceiling" on that limit of 150 percent of the baseline loan limit. Median home values generally increased in high-cost areas in 2017, driving up the maximum loan limits in many areas. The new ceiling loan limit for one-unit properties in most high-cost areas will be $679,650 — or 150 percent of $453,100.
Special statutory provisions establish different loan limit calculations for Alaska, Hawaii, Guam, and the U.S. Virgin Islands. In these areas, the baseline loan limit will be $679,650 for one-unit properties, but loan limits may be higher in some specific locations. (See Below)
Because of generally rising home values, the increase in the baseline loan limit, and the increase in the ceiling loan limit, the maximum conforming loan limit will be higher in 2018 in all but 71 counties or county equivalents in the U.S.
What Is A Mortgage Loan Limit?
A loan limit is the maximum amount a lender will approve under certain guidelines.
There is not just one loan limit, but many. Conventional mortgages adhere to one set of loan limits, and FHA another. VA loans loosely follow conventional guidelines, but, technically, VA loanshave no limit. Loan limits are a means of standardizing loans nationwide. That gives lenders and investors more confidence in these loans, which pushes mortgage rates down for consumers.
Now's the time the time to start thinking about your future.
Over the years, shopping for a mortgage has become better than ever. Purchasing a home is more accessible online and mobile, which makes the process more fitting for those of us looking for our dream home. Valley West Mortgage is here to make that happen, with our online pre-approval form, loan application, and secure loan docs upload capabilities to ease the stress of buying a home.
Buyers have been using a combination of resources when looking for mortgage information that include, real estate agents, online, family, friends, and lenders. Out of which, most buyers found that the industry professionals, family, and friends were more trustworthy over online resources.
Lenderswere the top preference for recent buyers, with 77 percent saying they used a lender for information when shopping for a mortgage. Two-thirds also said they looked for information directly from an agent, while 69 percent said they used online resources, including Realtor.com, credit management sites and social media.Valley West Mortgage is your Mortgage Banker offering the lowest mortgage rates in the Las Vegas Valley.
Online mortgage resource users are buyers between 18 to 34 and 45 to 64. Nearly half of all buyers said they used online resources out of convenience. 22 percent said because of their “practicality,” and another 12 percent said they were “easy to understand.”
If you’re wondering, it’s not going away anytime soon. Mobile usage during the mortgage shopping process has jumped to 65 percent and 73 percent hope to do so in the future.
Tools That Help Your Mortgage Buying Needs
Specifically, online tools and mobile resources are available to you 24/7 which is why it makes it more convenient to start your search there. You can compare mortgage quotes, obtain a mortgage quote, fill out a mortgage application,submit documents to your lender and look for advice about getting mortgage via your mobile device without the hassle of leaving your home.
A Good Faith Estimate is an estimate of all of your closing costs when purchasing or refinancing a home loan. Your Good Faith Estimate (or GFE) will give you a ball park figure of what rate your loan will be locked at and a rough estimate of what your monthly payments will be. Federal regulations require that your lender provide you with a GFE within three days of the day you applied for your home loan.
Like any type of mortgage document, the GFE can be challenging to read if you don’t have the proper guidance. Your GFE is typically three pages and it contains fees and fine print. Make sure that you recognize how each charge is allocated, who you are paying these charges to, and which fees you are being charged for up front versus which fees you will pay at closing.
Use your GFE to your advantage. The GFE doesn’t just show what costs you have to pay, but also what costs the lender and seller will pay. Be mindful of the fact that if the rate changes, if the loan amount needs to be lowered or raised, your GFE will change as well. You may in fact have a total of two or three GFE’s before the close of your loan.
Good Faith Estimate Tips
Here’s a tip for you: the third page of the GFE discloses what fees can and cannot increase or change. If you were to go to the closing table ready to sign all of your paperwork and you notice that the numbers on your final documents are significantly different than the figures on your final GFE, stop and ask questions.
A good lender will be more than happy to explain any changes to you. Your GFE is your friend and essentially your tool to make sure that you are not overcharged or underpaying for any portion of your loan. When you are issued your Good Faith Estimate, read over it section by section. Pay close attention to costs and fees. If you have questions, contact your lender.
The 5 best review websites for the mortgage industry.
In the last 8 years, reviews have become one of the major deciding factors in choosing whether to use a company and their services. Five great examples of service based review websites include Yelp, Angie's List, Zillow, Lending Tree and obviously Google. In the mortgage and real estate industry, Zillow and Lending Tree are the major review sites for clients to give their opinion. Reviews are a great way to inform other individuals about the experiences you had with a specific company. It's like asking for advice, except this time you're asking 200+ people instead of your close group of friends and family. It's also a possible way to make new friends.
At Valley West Mortgage, we value the voice and opinion of every client / borrower that we do business with. From just answering questions about the average home buying experience to asking about the best mortgage rate offered today. It's in our benefit to understand how our is perceived from an outside perspective. Why? So we can keep doing the things we do right even better and improve on them.
1. Google's Review System
If you have used Google to search for a business online, more than likely you have seen their business come up on Google Maps. If the business has filled out their profile, you can see the hours of operations, contact information, website and last but not least, a review left by other Google Users. This is a very useful way to review a business. We're pretty safe to say that most of the people in the United States use Google Maps. So having all of your information in one place is just smart. Google Review System only requires that you are logged into a Google Profile and that the business is listed on Google Maps / Google Plus. What we really like about the Google Review System is that a user can not leave multiple reviews. Of course a person can make multiple Google accounts, but we like to assume that most users do not need 500 profiles just to leave a review. We also like that a user can update their review or change the review up. Maybe to re-word their experience or give a recent update if they have been back recently.
2. Yelp's Review System
Yelps review system is pretty amazing. All that is required to leave a review for a business contains a profile and a listing for the business. Very similar to the review system used by Google. Once you're logged in you can tell other Yelper's, is that what they're called?, about the business and how you were satisfied. What's really cool about Yelp is that there is a list of the same information Google Plus provides, plus most restaurants provide a link to their menu's online. It's very helpful. How this ties into the mortgage industry is simple. It's another place that potential borrowers / clients can learn about a mortgage company and see read a past review from other Yelpers. Ok, we're going to make it what Yelp users are called. We also like the fact that Yelp will not allow a business to buy their way out of hiding or deleting a users bad review. If you do amazing work, this problem will solve itself.
What we do not like about Yelp is the ability to leave multiple reviews for the same business. Why this can be helpful in many ways, it can cause confusion for some.
3. Angie'sList Review System
The review system at Angie's List is very similar to the above mentioned websites. The exception is that you must pay to list your business and go through a kind of background check before you can allow users to use your service's through the website. You must also pay to become a user of the site. The idea here is that providing a little bit of money will somehow ensure that a review is more genuine. Angie's List also wants the business's listed on their site to have all of the appropriate credentials / paperwork needed to run a company in their industry. It was a really smart idea. Since the inception of Angie's List other websites like theirs have become an industry standard. An example would be Care.com.
4. Zillow's Review System
The review process for Zillow is a bit different as well as the same. Same login to an account and leave a review process. The only difference is that a review, when written by a customer who received a quote on Zillow from the Mortgage Company, holds more credibility. The reason being that a review from a client, who has used their website and the company to obtain a mortgage loan, has gone through the entire process and probably has a really good reason to leave a positive / negative review. It's actually a pretty smart idea. That's why we use it. You can see all of our Zillow Reviews online 24/7.
5. Lending Tree's Review System
Lending Tree is a rare breed of website. It's a mix between Angie's List and Zillow. Where you do not need to have a paid membership, like using Angie's List, in order to use the site you must offer up some information about what you're looking for. If you're looking for a mortgage loan, the website is going to ask you a series of questions in order to provide a lead to a company or to build your profile. It usually does both. Then you're greeted with offers from banks and brokers on the lowest rates available. Where it meets the Zillow review process is that all the reviews are from people that use the site from initial offer to close of the loan.
That's been our review of the 5 best review websites for the mortgage industry. We hope you learned something and we look forward to working with you in the future. Let's help you find your dream home or help you stay in your current dream home. You can always contact us by filling out our form online or by calling us at (702) 696-9900. You can also ask us a question through Facebook and Twitter. Did you know that you can view our rates on Facebook?
WHAT IS LENDER PAID MORTGAGE INSURANCE (LPMI)?
Lender Paid Mortgage Insurance (LPMI) is a type of insurance used for borrowers who cannot afford to make a down payment that is at least 20% of the total loan amount needed for the house you want to buy. Despite the catchy name, Lender Paid Mortgage Insurance is not exactly paid by the lender. It is essentially paid by you, the borrower, in the form of one large payment up front or in a series of smaller payments that will be built into your mortgage rate. This of course means that you’ll have a slightly higher mortgage rate than if you had have put 20% of your total loan amount down (but that’s small potatoes compared to paying a lump sum large enough to cover whatever the lender determines will insure your home).
With 20% Down
Loan Amount $220,000
15 Year Mortgage
4.75% Mortgage Rate
$1,711.23 Monthly Payments
Without 20% Down
Loan Amount $220,000
15 Year Mortgage
5.75% Mortgage Rate (1 point added to cover LPMI payment)
$1,826.90 Monthly Payments
For a mortgage lender, the idea of investing in a borrower who cannot make a down payment of at least 20% on his or her home is somewhat risky. The insurance protects your lender from losing money, in case you default on your loan. If you were to default, the lender would be repaid a portion or in some cases, the total amount of the loan through the insurance that was purchased. The percentage of what will be returned to the lender is dependent upon the type of insurance that they choose to get. Also, since mortgages with less than a 20% down payment require insurance, LPMI saves you money, versus using Private Mortgage Insurance, or PMI.
LPMI is through your lender, therefore your lender would include your payment for the LPMI in your monthly mortgage payment. PMI on the other hand is not offered through your lender, you have to go out and get it yourself. So you’ll be paying for your insurance premium on top of your monthly mortgage rate as two separate charges rather than just one. It’s like (and my ladies will understand this) going into Payless and getting two pairs of shoes. When they have a buy one get one (BOGO) going on, you buy one pair and get another pair at a discounted price just for buying the first pair. Whereas if you bought one pair of shoes at Payless, and then another pair at JC Penny, you’d be paying full retail price for both shoes. It’s like you’re paying less for Mortgage Insurance because you are purchasing it through your lender rather than purchasing it out right from an outside insurance company. You’re basically getting the insurance cheaper because you’re already doing business with the lender rather than doing business with the lender and with a separate insurance company. Use two companies, pay two fees. Use one company, pay one fee.
Using your payment(s), the lender then purchases mortgage insurance on your home. And just so we’re on the same page, allow me to clarify something that is very important. By mortgage insurance, I don’t mean the kind of insurance that protects your home in the unfortunate event that your house were to be damaged by a flood or be conquered by savage barbarians, a fire, hurricane, or any other unforeseen disaster, natural or otherwise. That type of insurance is called Hazard Insurance and it must be purchased by you the borrower.
Before asking about receiving LPMI, think on these few things:
As is the case with most potentially credit changing transactions, like buying a car, or applying for a credit card, your FICO credit score will be a determining factor in whether or not you qualify for LPMI (check back for my article about FICO). What score is considered a good credit score will be up to the lender, as the lender is the one that is taking the risk. So be sure to keep your credit in good standing.
Also, think about the life of your loan. A fixed mortgage rate does not change throughout the life of the loan. So if you have your LPMI included in your rate, you will be paying that (somewhat higher than average) rate for the entire life of your loan. In other word, if you’re applying for a 30 year fixed mortgage, LPMI may not be the best option. However, if the life of your loan is relatively short, say ten or fifteen years, LPMI may be a good way to go.
Also remember that you can get tax relief for paying LPMI. So the cost of your LPMI can be deducted when you are doing your taxes. (Please remember that I am not a tax professional and this is something that would be wise to discuss with your tax preparer before making a final decision.)
If you are considering buying a home or you are pondering over a possible refinance, keep Lender Paid Mortgage Insurance in your think tank. Ask your lender about it, and know your options. Just remember that LPMI can be a great financial possibility for you by helping you to save money throughout the life of your loan.
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.
You make a down payment of $20,000 (10%).
The remaining principal (the amount of the loan you will need for the house) is $200,000
Remember, upon paying back the loan, you must pay on the principal amount of the loan, as well as the interest on the loan every month
If your interest rate is 5.5%, you’d be paying about $1000 in interest every month, plus your house note and all of the other fees that come with owning a home
If your interest rate is at 4%, you’d be looking at paying a bit over $700 a month in interest
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 firstname.lastname@example.org