If you search the internet for 'home buying' you'll find an abundance of tips and tricks but they're all pretty much the same.
The end result is you purchasing your dream home so we're here to help you through the process from start to finish.
There are 4 categories:
(A) Conventional that conform to standards require as little as 3% down. 20% down no PMI required
(B) FHA (Federal Housing Administration) permit as little as 3.5% FICO Score of 580 or higher
(C) VA requires no down payment, no minimum credit score. May pay a VA funding fee.
We're here to help you along the way. When you're ready to purchase let us know!
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 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.
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)
There are 3 steps that should be taken in order to avoid denial from your lender:
**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.
Lenders look at potential borrowers from many angles before extending credit:
It's important to understand what affects your score and how you can boost it.
One major factor in your credit score is how much revolving credit** you have versus how much you're actually using. The smaller percentage it is the better it is for your credit rating. The optimum percentage would be 30% or lower. By paying down your balances, and keeping those balances low you can boost your score.
Multiple credit card balances can be consolidated with a balance transfer credit card or personal loan could help with your score.*
What You May Not Know:
Even if you pay balances in full every month, you still could have a higher utilization ratio than you'd expect. Some issuers use the balance on your statement as the one reported to the bureau.
You may want to ask your credit card issuer if they will accept multiple payments throughout the month.
Nuisance Balances
These are small balances you have have on a number of credit cards. Gathering up all of your credit cards with small balances and paying them off can help increase your score. Selecting, one or two go-to cards for everything will keep your credit report clutter free.
The Old Debt
Negative items are bad for your credit score, and most of them will be removed after 7 years but, removing old debt that you've paid off is a bad idea. The longer your history of good debt is, the better it is for your score.
Small Dips
When making purchase inquiries when applying for credit, each time it can cause dips in your credit score that lasts a year. Scoring formulas for a mortgage, auto and student loans- allow that you'll make multiple applications but take out only one loan.
The credit score commonly used by lenders, ignores such inquiries made in the 30 days prior to scoring. If there are any older than 30 days, they will count those as one inquiry.
If lenders are using the newest forms of scoring software, then you have 45 days. Older forms, you need to keep it up to 14 days and won't count multiple student loan inquiries as one one.
Paying On Time
When making a big purchase you don't want to default on any bills. Your score could drop and you won't be able to make that purchase.
That can even extend to items that aren’t normally associated with credit reporting, such as library books, she says. That’s because even if the original “creditor,” such as the library, doesn’t report to the bureaus, they may eventually call in a collections agency for an unpaid bill. That agency could very well list the item on your credit report.
Putting cash into a savings account for a major purchase is smart. Just don’t slight the regular bills to do it.
Sinking Ship
Two of the biggies are missing payments and suddenly paying less (or charging more) than you normally do. Taking cash advances or even using your cards at businesses that could indicate current or future money stress. You don't want to do anything that would indicate risk.
Monitoring
If you are denied credit (or don’t qualify for the lender’s best rate), the lender has to show you the credit score it used, thanks to the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Another smart move is to regularly check your credit reports. You’re entitled to one of each of your three credit bureau reports (Equifax, Experian and TransUnion) for free every 12 months through AnnualCreditReport.com. It’s smart to stagger them. Send for one every four months, and you can monitor your credit for free.
You can also use apps like:
FICO maintains a total of 28 different FICO scores, which are widely used by issuers of home, auto, and credit card loans. Remember that each one of these apps offers a free snapshot of a credit score based on a separate model and that snapshot is only for educational purposes. If you want to get the actual FICO credit score, you'll have to pay at least $19.95 per month.
While the advice provided by any of these services can be valuable to improve your credit score, your potential lender may be working with a very different score than the one gleaned from an app. If you're working toward meeting the requirements for a mortgage, ask your lender what credit score their using. That way, you'll choose the app that can provide a more accurate estimate.
*We're not a credit consultant nor do we claim any of these methods will guarantee your credit score to change. This is for information purposes only. We advise to contact a professional credit company for any questions or legal assistance.
**Revolving Credit: Credit that is automatically renewed as debts are paid off.
**Vantage 3.0 Credit Score: Can score millions more people than other models by incorporating up to 24 months of past credit activity – including utility and rent payments where available – which could open up more credit options to you.
Resources:
https://www.wisebread.com/7-apps-that-monitor-your-credit-for-you
https://www.creditkarma.com/credit-scores
https://www.bankrate.com/finance/
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
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.
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.
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
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
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.latimes.com/business/la-fi-federal-reserve-minutes-20170222-story.html
WHITNEY RUSH, VALLEY WEST MORTGAGE
The Consumer Finance Protection Bureau (CFPB) has been in the spotlight lately since the scandal that took place a few years ago, got them in water for collecting reams of consumer data, undercutting privacy rights while putting potentially sensitive personal information at risk in the event of a hack, and has been in the sight of congress since its inception for spending a lot of our taxpayer’s money on high salaries to major overhauls at its headquarters.
This time we have the Republicans after them. Republican Ted Cruz and Republican John Ratcliffe have introduced bills in the Senate and House that would potentially dismantle and abolish the agency. Cruz said the CFPB does consumers more harm than good. Ratcliffe, “President Trump has made it clear he’ll join us in our fight to dismantle Dodd-Frank and finally offer some relief to the small business owners throughout Texas and across the country who’ve been hit hardest by its devastating impact.”
When doing your research, always use great sources! Check out the sources for this article below.
http://www.mpamag.com/news/ted-cruz-backs-bill-to-kill-cfpb-60203.aspx
http://reason.com/archives/2017/02/15/the-consumer-financial-protection-bureau
- VALLEY WEST MORTGAGE
February 1st brings some good news already. The Federal reserve as expected has held the interest rates steady today as they begin to assess where our economy heading-but they hinted that the rates might stay low for a good while to come.
The Fed’s decision today confirmed those expectations.
“In view of realized and expected labor market conditions and inflation, the Committee decided to maintain the target range for the federal funds rate at 1/2 to 3/4 percent,” the Federal Open Market Committee said in a statement. “The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation.”
The FOMC also said that it expects economic conditions to evolve in a way that will warrant “only gradual increases” to the federal funds rate in the immediate future. The rate, the committee said, “is likely to remain, for some time, below levels that are expected to prevail in the longer run.”
When doing your research, always use great sources! Check out the sources for this article below.
http://www.mpamag.com/news/fed-announces-interest-rate-decision-58976.aspx
-Valley West Mortgage