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.
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.
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:
Comparisons with homes near the subject property
Notes about the real estate market in the area as a whole, including the ages of the homes and the average selling prices of the homes nearby
Notes about the appearance of the inside, outside, and surrounding area of your home
Notes about any visibly unfavorable characteristics about the home like cracked concrete or damaged windows
Pictures of everything that adds value to the home including, bedrooms, appliances, and fixtures
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!
Our last few articles have been on the impact that the oncoming rise in interest rates from the Federal Reserve will have on the general public, and more specifically how it will impact those who are in the market for purchasing and refinancing. Janet Yellen has openly stated that a change from the Fed is coming soon due to the growth in our economy. We’ve mentioned both the pros and the cons of an interest rate hike, but lately we’ve been noticing more pros for our borrowers than cons.
One positive impact that this rise in interest rates can have on our current and potential borrowers is the opportunity to free themselves from Mortgage Insurance Premiums. Your Mortgage Insurance Premium is the price that you pay monthly as a part of your mortgage payment that goes into an account to protect your lender if you fall on hard times and happen to default on your loan. A Mortgage Insurance Premium or MIP for short, is usually only required for borrowers who can’t afford to put down 20% of their loan amount when applying for their mortgage loan. Up until January 2013, borrowers were able to cancel their MIP coverage once they had made enough payments and had 20% equity in their home. Now that policies have changed, borrowers no longer have the option of cancelling the MIP on their loan when they reach 20% equity.
However, being the mortgage monsters that we are here at Valley West Mortgage, we’ve recognized a way that borrowers can still break away from the bondage of MIP. With a refinance into a Conventional loan where the requirements are somewhat different than an FHA loan, borrowers can drop their MIP payment (provided they meet the aforementioned requirements).
Borrowers who used the FHA program to purchase their home who have been making regular mortgage payments have been building up equity since the day they made the first payment. Couple that with the fact that the average prices of homes around the United States has gone up in the last 2-3 years and just like that, we’ve found another reason for you to refinance into a Conventional loan. Having equity or monetary value in your home means that you can apply for a Cash-Out refinance. Thinking of going on a vacation? Have a kid going to college? Or maybe you just want to do some home improvement? A Cash Out Refinance would give you the opportunity to refinance your old loan into a new one and get cash back for some of the value that your home holds.
In 2016 about 8% of all the refinances processed were for borrowers who were switching from an FHA loan program to a Conventional loan program. That calculates to about 20,000 of those refinances per month in 2016. With the growth of our economy, it is estimated that the prices of homes will go up by about 5% (according to data found by CoreLogic). Considering the fact that over 2 million borrowers purchased homes using the FHA program in recent years, there is no doubt going to be a large wave of refinances coming from borrowers who wish to refinance in 2017.
When doing your research, always use great sources! Check out the sources for this article below.
If you’re into literature, you know that shortly before his death Julius Caesar was told to “Beware the Ides of March”, and if there were any soothsayers around today, they’d probably be telling us the same thing right about now in relation to mortgage rates. We’re just slightly over a week into this month and though we’ve yet to see that increase in interest rates that has been so heavily discussed by the federal reserve since the beginning of this year, we still know that it’s on its way. And unlike the great Julius Caesar, we need to be prepared for what’s to come.
Janet Yellen, Chairwoman of the Board of Governors for the Federal Reserve, has hinted to a rise in interest rates, specifically in March, several times this year. Our economy has been doing very well in the sense that more people are becoming employed, making money and paying bills. To balance this surge in economic profit, the Federal Reserve has to ensure that the general population doesn’t make so much money that the value of the dollar decreases. Preventing this kind of inflation means raising interest rates to offset the amount of money that will be circulating throughout the country.
Take a look at Janet Yellen’s comment from the Federal Reserve Meeting on March 3:
"Indeed, at our meeting later this month, the committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate," she added.
Not only did Yellen tell us that the Fed is to have another meeting regarding this issue this month, she also told us what they plan to evaluate. Like we discussed earlier, if the employment and inflation rates are moving in a positive direction (which they have been for the last few fiscal periods), interest rates will rise (according to the Fed).
For banks, rising interest rates will be a benefit for the next coming months as borrowers will want to purchase and refinance before the rates get too high. In other words, business will be booming as the rates rise to their peaks. For borrowers, getting into the bank to purchase or refinance should be a top priority for obvious reasons. To illustrate, let’s talk about my friend Jeff. Jeff is at home watching the news and he sees that gas will cost twenty more cents per gallon starting tomorrow. Jeff gets up from his couch and goes tonight to put gas in his car and he fills up his tank. Why? Well wouldn’t you want to buy gas today if you knew it would cost more tomorrow? Most borrowers have the same mindset as Jeff when it comes to their homes. If they know it will cost them more to purchase a home in two weeks, they jump on the bandwagon and call one of our Loan Officers today to get the process started and to get a good rate locked down. Needless to say, it’s more advantageous for you as a borrower to capitalize from the opportunity. The rates are going up sooner rather than later and hey, if you can’t beat them, join them. If the Fed is going to capitalize from the growing state of our economy, why shouldn’t you?
So heed the warning of the soothsayer and beware, (or in a less Shakespearian language) just be alert of the ides (usually the middle of the month) of March as it may hold the key to your next refinance or purchase and you don’t want to miss that opportunity.
When doing your research, always use great sources! Check out the sources for this article below.
The big question in the mortgage industry is when the rates are going to go up. There’s been talks about it being in March which may be the truth. The Federal reserve is looking to raise its benchmark interest rate this month as long as the economic data remains strong.
The Federal Reserve has hinted March 14-15 will be the meeting that could bring a rate hike. Rate hikes are likely to rise faster this year as the economy appears to be growing with few hurdles and the risks have receded substantially. We will soon see what impact this will have on the industry.
If you’ve read some of our earlier articles you already know that getting a decent mortgage rate is simple. Any loan officer can slap down a number and make you think you’re getting the best rate, but how do you really know that you’ve got the best mortgage rate around? The truth is, with only common mortgage knowledge, you won’t. You need to know exactly what lenders are looking for. Luckily for you, the wonderful people here at Valley West Mortgage have comprised this promising little cheat sheet for you, because let’s face it, our customers are always on our minds.
Let’s Begin with Mortgage Rate Basics
Shopping for a new home is almost like shopping for a new car, you’ve got to compare the prices. But wouldn’t it be great if you didn’t have to be the one to compare them? A great mortgage rate can only be found by the most skilled professionals, those who know the business and speak the language. You could call in to Valley West Mortgage today and know that you would be presented with the best rates our Loan Officers can find. Your Loan Officer will also speak to you about down payments. About twenty percent of your total loan amount is money that you will use to put down on your house and to get a better mortgage rate.
Another factor that you need to look at, one that can be vital to the mortgage rate you will qualify for, is your credit score. Rob Berger, a contributor to Forbes’ online magazine, says “According to myFICO.com, the best mortgage rates are available to borrowers who have credit scores of 760 or above. As your score goes lower, your interest rate goes up. The lowest score needed to qualify for a mortgage is 620. At today’s mortgage rates, however, a score of 620 will qualify for a rate of 5.022%, while those with a score of 760 or higher will enjoy a lower rate of about 3.433%”. Monitor your credit ladies and gentlemen, and be sure to fix any blemishes that could negatively affect your qualifying rate.
Now Let’s Explore Some other Mortgage Rate Ideas
Monitoring your credit, also means monitoring your Debt to Income ratio. Your debt to income ratio allows lenders to look over your spending and make sure that if and when they lend you the money for your home, you will be able to pay the loan back in a set amount of installments. Lenders also want to see a steady flow of income and that means having a steady job. In the mortgage business, a steady job is employment that has been carried out at the same location for a minimum of two years. A steady job translates to a steady flow of finances.
In a nutshell, it takes a little bit of know-how and a lot of preparation to put yourself in line for the best mortgage rates. Once you’ve organized your finances, found a fantastic lender, and have read over these tips, we have confidence that you’ll do just fine.
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?
Mortgage Rates are on the rise. What's this mean for you?
Freddie Mac, the Federal Home Loan Mortgage Corporation, released data on Thursday highlighting the second consecutive week that mortgage rates have increased nationwide. According to the National Mortgage News, interest rates for 15-year mortgages increased 8 basis points, up to 3.21 percent, while 30-year mortgage rates went up 4 points to 4.02 percent.
What does this mean for potential borrowers? Simply put, it means there will be a decrease in mortgage applications, as has already been reported by National Mortgage News. While the housing market continues to stabilize, the increase in interest rates will shy many people away from applying at all.
Although higher mortgage rates could be bad news for borrowers, it is generally a sign of a growing economy. Mortgage rates are also a sign of the supply and demand for mortgages as an economy strengthens. In an attempt to drawback on the inflation of goods and services, which are plentiful in a strong economy, the Fed will inflate prices on things such as mortgage rates, thus trying to create a balance.
However, it is important to take a closer look at the economy during these times. In a recent article published by the New York Post, columnist John Crudele introduces the idea of a growing economy as a falsity. According to Crudele, the market highs, unemployment rates, and job increases are only affecting “blessed” few – the 1 percent. While he does say that the US economy is experiencing a moderate growth period, he says that it is no way growing at the quickened rate that many seem to think, or that could be exemplified by the rapid increase in mortgage rates.
Buying a home should be approached with ample research and a careful consideration of the market. It’s important to take all sides into view before following through with Valley West Mortgage to get the best rate for you.
What Goes Up...Must Come Down
If you watch the news or are current in the mortgage world (as we all should be), you know that the mortgage rates are dropping significantly. Mortgage rates are important because they regulate the amount of interest that home buyers pay on their mortgages every month. Houses, especially nice ones, aren’t exactly cheap. So borrowers need to obtain a loan from a bank in order to pay for their house. Well upon paying back that loan, borrowers must also pay interest, so if the interest rates are low, then of course the payments (in most circumstances) are low as well. What does that mean for you? It means that NOW is the time to look into buying a new home, or refinancing your current home for a lower interest rate.
According to Freddie Mac, the average mortgage rate as of October 16, 2014 is at 3.97% for a 30 Year Fixed Rate Mortgage. That’s a major change from the 4.28 percentage rate that was reported last year by Freddie Mac. One of the safest bonds to invest in are US Treasury Bonds. Because of this, US Banks model their interest rates on mortgages based on the US Treasury’s rates. As a result, if the Treasury’s rates drop, then the mortgage rates are likely to follow.
Is There an Explanation for Low Mortgage Rates?
Wise investors want to make safe investments that will provide a steady income of money. One investment that is considered “safe” is an investment in Mortgage-Backed Securities (or MBS). Those who invest in mortgage-backed securities are essentially lending their money to a homebuyer or a business. These MBSs are backed by government supported entities like Freddie Mac and Fannie Mae, and since they are supported by the full faith and credit of the government, investors feel comfortable with investing. Investors are investing while the mortgage rates are low. If they go up too high, there is no guarantee that they will continue to put money towards MBSs. Banks need people to continue to invest in MBSs so that they can continue to gather their loans and sell them to the GSEs, or Government-Sponsored Enterprise . If no one is investing then the banks can’t sell their loans, and if smaller banks can’t sell their loans and their borrowers default then the bank loses thousands of dollars. According to Jed Kolko, a Trulia Chief Economist, “[When] investors think US mortgage-backed securities are relatively safe, mortgage rates [will] stay low.”
Granted, what I have provided is only one explanation. Other bloggers, mortgage experts, and financial institutions I’m sure have their opinions on why the rates have fallen. Will the rates stay low? Doubt it. The economy is constantly changing as well as the demand to borrow money. So be sure to take advantage of this rare financial opportunity while it’s beneficial to you. Just a bit of food for your mortgage thoughts.
