Your Purchasing Power

Who’s your favorite X-Men character? Wolverine? Storm? Professor X? What makes that character your favorite? For some people it’s the character’s courage, or perhaps their good looks, or their intelligence. My favorite mutant character is Mystique and what makes her my favorite is her superpower. Mystique is a shape shifter, meaning she can change her body and her voice to look like anyone she chooses. Did you know that outside of the comic book world there are real-life, everyday people with super powers? You are one of them. This article is going to walk you through tapping into and applying your purchasing power.

Though I’m sure you’re not a mutant like the characters of X-Men, your purchasing power is a great power to exercise when you’re looking to buy a home. Your “Purchasing Power” is the ability and the flexibility to get the home you want. Your purchasing power can be increased by applying the following practices:

            Decrease Your Debt

Though the ultimate goal is to eliminate your household debt all together, depending on the amount of expenses you have, you may not be able to eliminate all of your debt all at once. In the meantime, decrease your debt by eliminating what you can. Pay off any outstanding medical bills. Return those overdue books to the library. Most importantly, stop using your credit cards. The minute you decide that you want to purchase a home, stop all usage of credit. Every time you swipe that card, you’re swiping yourself into debt.

            Increase Your Credit Score

Similar to how eliminating all of your debt will take time, improving your credit score will take time too. It’s easy for credit scores to drop, it’s a little tougher to bring them back up. Every 30 days the credit bureaus update with any new financial information from the previous month. That means there’s only 12 opportunities within a year for your score to go up (once each month). So each month you’ll have to make a conscience effort to change something for the better on your credit report. Remember, when credit does increase, it’s usually only increasing by a factor of roughly 1-15 points. Big events (like a delinquency or having an account go to collections) can change your credit score drastically, negatively hitting your credit anywhere in the range of 100 to 150 points so be sure to pay everything on time if not early.

            Check Your Credit Report

When you do your application to purchase a home, your credit report will be pulled and lenders will evaluate how much money you can be trusted to borrow. Do yourself a favor and check your score before the lenders do. I read once that at least 5% of Americans have a major error on their credit report. This could be caused by something as simple as someone having the same name and birthday as you. You’d be surprised how many John Smiths were born on the same day. Check your credit report to dispute any incorrect information that could be hurting your credit score.

            Add to Your Income

Another thing that lenders look for when processing your mortgage application is your debt to income ratio. This ratio compares how much debt you have to how much income you earn. It is calculated by dividing the total amount of your monthly expenses by your gross monthly income before taxes. The lower your DTI is, the more money lenders are likely to let you borrow. Increasing your income can also lower your DTI by adding to the income portion of your ratio. For example, if your monthly debt totals at $1500 and your gross monthly income is $3000, your DTI ratio would be .5 or 50%. On average lenders look for a DTI ratio of no more than 43%.  If you were to pick up a second job that brings in an additional $2000 per month and you could raise your total income to $5000, your DTI would drop to 30%, a much more ideal percentage.

You have powers nestled deep within the financial center of your brain. It’s easy to tap into those powers by doing things like paying off debt and clearing up your credit. Your purchasing power gives you the flexibility to make broader decisions when it comes to purchasing. Purchasing power also means better borrowing opportunities and access to different types of loan programs. Increase your power today!

 

When doing your research always be sure to consult great sources. See the sources for this article below!

 

http://www.thetruthaboutmortgage.com/pay-down-your-debts-before-you-apply-for-a-mortgage-to-increase-purchasing-power/

http://budgeting.thenest.com/increase-purchasing-power-21057.html

http://www.investopedia.com/terms/p/purchasingpower.asp

 

 

valleywestmortgage_whitney_rushWHITNEY RUSH, VALLEY WEST MORTGAGE

 

Gifting Down Payments

Receiving & using a cash gift is one of the most common processes when purchasing a new home. Most forms of cash gifts are used for the 20% down payment.

We've provided a brief breakdown of the process and how to ensure you're not denied from your lender due to in proper gifting.

Down Payments

Down payment "gifts" can make it easier to purchase a home.

Loan programs including FHA, VA, USDA, Conventional, and Jumbo loans, allow the use of cash gifts.

 

Commonality

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:

  1. Correctly Written Gift Letter
  2. Documenting the Gift from the Giftor
  3. 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.

 

 

We've Got You Covered

Mortgage & Homebuyer Concerns

House Prices Are The Culprit

Who would have guessed we would be back to the similar movie The Day After Tomorrow? All areas of the housing market are bracing themselves.

More then half of the industry are saying the rising of interest rates have been their biggest hurdle since the World Record Jump of 2007. The industry needs to drive forward with the digitization of the mortgage application process.

And future home buyers? Well, they’re right there with them. First time home buyers don’t have a vast inventory of affordable homes available to them and 20% have credit history challenges.

The Solution

We having a growing presence in the purchase market that will require continued support and customization as we continue to play a meaningful role and drive demand in the housing market.

Without one we don't have the other.

 

Contact Us Today! 702-696-9900 Learn More About Our Mortgage Options Today.

 

#mortgage #homebuyers #realtors #thestruggleisreal #valleywestmortgage

Resource: https://www.mpamag.com/

Shaping the Mortgage Industry in 2018

The Diverging Market

What Will the Mortgage Industry See?

 

Origination: Lending outside qualified mortgage rule may help lenders replace lost home refinances

Home purchase volume is expected to increase slightly but this trend will likely be prominent in 2018, as originators may continue to struggle to replace lost refinance volume and their compliance and risk management processes become more robust.

Cost Competition: Fannie Mae and Freddie Mac tech help lenders expand credit box

What this means to lenders and borrowers? Lenders will be able to improve the borrowing experience for home buyers and make full use of the credit box.

Mortgage Loan Service: Market Consolidation

Mortgage debt is expected to grow 4% in 2018, following the 3.2% growth in 2017. The largest residential mortgage services will get even larger, benefiting from consolidation and the outsourcing of service rights acquired by companies without their own platforms.

Always Room for Improvement: Technology and Automation will drive the digital mortgage advances

Digital mortgage technology as we all know is the current 'buzz word." It helps consumers take a more hands-on-approach to the mortgage process, lenders are stepping up their adoption of automation and learning through artificial intelligence abilities. Which means a fully end-to-end digital solution which is still in the infant stages.

What Valley West Mortgage strives to better the way we operate our mortgage business from start to finish, from origination to funding to servicing and keeping our clients happy.

Compliance and Regulation: Fannie Mae and Freddie Mac

Shifting policy stances and renewing focus on housing finance reform could make 2018 a breakout year for Congress to finally resolve the conservatorship which began on September 6, 2008. This conservatorship in response to the substantial deterioration in the housing market that severely damaged Fannie Mae and Freddie Macs' financial condition.

 

Resources:

https://www.fhfa.gov

www.nationalmortgagenews.com

 

 

 

Shopping for a Mortgage Loan

How Do You Shop for Rates?

The top tools for mortgage shopping

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.

Lenders were 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.

Get Today’s Mortgage Rates

If you’re looking to buy a home and need a quick quote, pre-approval, or want to speak to a mortgage loan originator you’re in luck, we have everything you need.

 

 

 

 

 

Resources:

http://www.fanniemae.com/portal/research-insights/perspectives/top-mortgage-influencers-lenders-agents-deggendorf-101917.html

 

Valley West Mortgage Cinco de Mayo

Three Square is a Feeding America affiliate, serving four counties in Southern Nevada: Clark, Nye, Lincoln and Esmeralda. Three Square and Feeding America estimate the number of food-insecure persons in our service area to be more than 296,000. Food insecurity occurs when people aren’t able to secure enough food for a healthy diet and active lifestyle, at some point during the year.

We at Valley West Mortgage love to make contributions to our community and this is no different. Three Square and Nacho Daddy teamed up today by having locals donate canned goods/non-perishables to Three Square. By giving back they offered $2.00 tacos and a free beverage upon donations.

Come down and make canned good donations to Three Square and get some Cinco de Mayo Tacos Nacho Daddy off of W. Sahara. #valleywestmortgage #lasvegas #donations#nachodaddy #tacos #cincodemayo

    
    

The Analytics on Appraisals

The Analytics on Appraisals

What is an Appraisal?

An appraisal is a document provided by an appraiser (the person who conducts the appraisal report) that provides a professional estimate of the value of your home.

Appraisals are conducted by a third-party appraiser who is completely objective in their process. Appraisers do not work in favor of the lender nor the borrower. They simply conduct the appraisal and produce their findings.

Appraisals are most often conducted two ways. The first way an appraiser can conduct an appraisal is by noting comparables. Comparables, or comps for short, are properties within the neighborhood of the home you’re buying that are similar to yours. The appraiser will use the values of the similar properties nearby to determine the value of your home. The second way is by estimating how much it would cost to replace your home should it burn down or be otherwise destroyed. The appraisal will compile all of the findings of the appraiser including:

Why Lenders Need Appraisals

Lenders do not want to dish out more than the actual market value of the subject property. An appraiser’s goal is to determine that value. With this figure, the lender knows how much the property will sell for if you default on your loan. They also know how much they can lend to you without taking a loss if you default.

For example: If the subject property is appraised at $150,000 – that’s how much it will sell for on the open market. If your lender gives you a loan of $175,000 and you default on your loan, they now have to try to sell the home at a higher amount than what its appraised for, which can be difficult. If they end up selling the home for the actual market value, they’ve just lost $25,000. It is for this reason that lenders usually give a loan amount that is at or under the appraised value.

Why Borrower’s Need Appraisals

Appraisals are usually buyer paid and can be paid for at closing or during the application process. If you’ve signed a contract to buy a new home for $200,000 and the appraisal comes back valuing the home at $150,000, you should negotiate with your lender to lower the loan amount because you’re paying more for the home than it’s actually worth.

Overall, appraisals are a measure of protection. They ensure that neither party is lending or spending too much during the purchase process of a home.

 

 

 

 

 

 

 

When doing your research, always be sure to cite great sources! Check out the sources for this article below!

 

http://www.bankrate.com/finance/real-estate/why-does-the-house-need-an-appraisal.aspx

https://www.thebalance.com/mortgage-101-series-understanding-the-appraisal-process-2395231

https://www.thebalance.com/facts-about-residential-real-estate-appraisals-1797691

https://www.thebalance.com/appraisal-process-when-buying-a-home-2395235

 

WHITNEY RUSH, VALLEY WEST MORTGAGE

 

 

Interest Rates Are On The Rise!

The Federal Reserve is expecting to raise interest rates as soon as March of this year.

The new Presidential Administration team occupying the White House is expecting a continued growth in the US Economy that has previously flourished as a result of the Obama Administration. They expect that our new President will invoke more jobs, and theoretically as a result of more people being employed, more money will be made for people and for businesses.

More money being made, results in more money being spent. This cyclical regime of the flow of money is what (in theory) will create a thriving economy where everyone earns and everyone spends. When people have the money to pay back and pay off their large debts like credit card, home, auto, and student loans, the Federal Government can decrease their debt.

The problem with the Federal Reserve wanting to decrease their debt is that they gather money for the debt by hiking up interest rates because they assume that if we make more money we can pay more in interest. This means that the percentage that you pay back to the bank every month for your existing home loan and the cost for you to borrow money for the purchase of a new home, goes up. Sure, ideally we’ll all be making more money, but if the Fed is forcing you to also spend more money, how much of this new increase in income will you really see?

With the Federal Reserve strongly indicating interest rate hikes soon, those of you who are interested in refinancing or purchasing in the near future should definitely commit sooner rather than later. When interest rates go up, not even the Federal Reserve knows when it might come back down, as the Fed has noted their concern about the ambiguity of fiscal policies coming from the new Presidential Administration. In fact, the Federal Reserve is predicting the possibility of up to three rate hikes this year alone. That being said, there is likely only a small margin of time for you to take advantage of financially tolerable interest rates. If you haven’t yet done your application for refinance or talked to one of our Loan Officers about purchasing your new home, it’s time to get started!

 

 

 

 

 

 

When doing your research, always use great sources! Check out the sources for this article below.

 

https://fortune.com/2017/02/22/federal-reserve-interest-rate-increase-fairly-soon/

https://www.bloomberg.com/news/articles/2017-02-22/many-fed-officials-see-rate-hike-fairly-soon-minutes-show

https://www.latimes.com/business/la-fi-federal-reserve-minutes-20170222-story.html

 

WHITNEY RUSH, VALLEY WEST MORTGAGE

 

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).

Estimated Example

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.

Many of Las Vegas residents will not benefit from the $25 billion bank settlement

Las Vegas, Nv - Naturally, federal government officials are getting out the confetti over the recent $25 billion settlement with five of the nation’s top mortgage lenders over abusive practices that led to millions of foreclosures nationwide.

But in Nevada, where the foreclosure crisis is at its worst, the “benefits” of the money are far less encouraging. Distressingly, only a small fraction of those underwater in their homes will be eligible for the refinancing provided under the settlement. Worse, those who have had their homes foreclosed on would receive only $2,000 apiece—for many homeowners in the Valley, not even enough to pay a month’s mortgage installment.

Nasser Daneshvary, director of the Lied Institute for Real Estate Studies at UNLV, says that of the nearly 400,000 Nevadans underwater, only about 22,000 will be eligible for refinancing, adding that the nation’s housing crisis will only improve once the government loans provided by Freddie Mac and Fannie Mae—approximately 60 to 70 percent of Nevada’s loans—are negotiated down. “Currently they’re doing nothing,” he says.

Still, Daneshvary says the amount of money earmarked for Nevada—nearly $2.3 billion—is an encouraging sign. “We have 1 percent of the U.S. population, but we’re getting 6 percent of this money,” he says. And while 22,000 homeowners is a small percentage of the total, it’s a start. “A refinancing which saves you money every month gives you hope so that you maintain your payments, hoping the market eventually comes back.”

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