15-Year Mortgage vs 30-Year Mortgage

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Now you have spoken to a lender and made the decision to get approved for your new home loan… Here is something to consider before starting to look at homes, what type of loan program am I going to go with.

30-year fixed or 15-year fixed? 30 year adjustable or 15 year adjustable? Interest only? FHA, VA or CONVENTIONAL??? LOTS OF DECISIONS!!

This decision is probably your biggest when you think about the amount of money you will end up paying for your new home in the long run… I deal with hundreds of buyers every year and almost ALL of them go with the 30 year fixed rate mortgage… Most would love to be able to put the 20% down needed to get rid of the PMI (private mortgage insurance) but a lot of people these days do not have 20% to put down… Thank God, we now have 5%, 10% down conventional programs and of course the 3.5% FHA program and the VA 0% down is always nice!!

WAIT!!!! Before you decide on the 30 year just because it lowers your monthly mortgage payment, you need to consider how much money you will end up paying in interest at the end of that 30 year period… It will BLOW your socks off!!!

SO if you can swing it, the 15 year plan is the way to go… Your home will paid off in half the time and the amount of savings in interest payments is HUGE!! We are talking 10’s of thousands of dollars…. 100’s of thousands depending on the size of the mortgage!!

Another thing you need to consider is the amount of time you think you will be spending in the home!! If you are only looking to live in the home long enough to fix it up and flip it than an interest only loan may be the way to go!! Talk to your lender about these options and make sure he gives you a GFE (good faith estimate) on each different program… Get informed!!

Call me anytime with any questions 702-218-4585

Common Myths to Homebuying

The First Step is Looking for a House


What an exciting and equally as scary time it is when you first decide to buy a new home. WOW! Your very own home! NO MORE RENTING! You can actually bust down that wall or paint the walls any color you want withou1-hbt having to get permission. You can landscape your yard anyway you want (well maybe in the backyard, at least if you have an HOA). And just the overwhelming sense of freedom that comes with owning your own home… OK… SO…. Where do you begin??

Over the next several months I am going to tackle 9 common myths about the home buying process and it is my goal to educate all who decide to read, exactly how you should go about buying your dream home!! I can tell you from lots of experience, most new home buyers start trying to find the perfect home they love and want Couple In Kitchen Using Laptop to Research Real Estate. Screen can be easily used for your own message or picture. Picture on screen is my copyright as well.to move into, online… They login to Zillow or Realtor.com and start the search for their first dream home. Although this can be super fun at first, it is actually the worst way to go about it!!

Why you may ask??? Simple… What normally happens is you end up finding what you think is the most amazing, gotta have it home in the universe. You call the listing agent and ask to see it. If the agent on the other end of the line has any experience at all they will ask if you have spoken to a bank yet and have you been prequalified. You will say no and they will tell you they cannot show you until you speak to a lender. Any Realtor that has any sense would never show a property without pre-qualifying the lead first… What if the home is $300k and you only qualify for $250k?? What if you do not qualify at all?? are-you-pre-qualified2Now you have started out your home buying journey frustrated and mad. What you should do is your research, interview 2-3 agents and pick one that you feel most comfortable with. They will advise you on a few qualified lenders you can interview and once you have a lender you like you will go through the process of getting prequalified… Once you have an approval at $300k, the Realtor you selected will start a search for you and email you properties to look at. You will let him know which ones you want to see. The buyer’s agent will show you the listings & if you find one you love, you will write an offer. What most buyers do not realize is you cannot write an offer without a letter from the bank. Looking at a listing without one is a total waste of time…

 

Another thing to keep in mind, when you use the listing agent to show you the home, remember who that agent represents… THE SELLER!1-da! This is called DUAL AGENCY… There are only 2 states where this is legal and Nevada is one of them!! You really should have a skilled buyer’s agent helping you and looking out for YOUR best interests… And it is FREE!! Keep in mind the sellers pay 100% of the commissions…

 

To recap… Interview 2-3 Realtors… Pick one and ask for a few lender referrals… Select a lender you like and work on your pre approval letter… Get your letter which will show the amount you are approved for and have the agent start a search for you in the MLS… Go look at property and find the home of your dreams… Now you are free to make an offer!! Wishing you much success!! DH

 

 

Buyer’s Surviving in a Seller’s Market

My real estate business has always been an even mix of buyers and sellers… So I represent approx. 40-50 buyers every year and right now in Las Vegas if you are looking to purchase a home in the $150-$300k range you are no doubt about to start pulling your hair out!! Why you may ask…. Simple… There is an inventory shortage in that price range and a HUGE demand fueled by low interest rates… So no matter what you are selling (watches, TV’s, homes, etc…) that has a shortage of inventory and huge demand you are always going to have rising prices and battles between buyers trying to attain those items… If a home lists in this price range and is somewhat turn key move-in ready we will see multiple offers within the first 12-24 hours… There is NO stealing or asking for the world from these sellers… You MUST go in with your highest & best offer right off the bat…

I have listed a few tricks buyers can use to get their offers looked at and hopefully accepted… You always have to remember that sellers would rather work with an all cash buyer #1… Reason being is all cash offers have no appraisal and can close quickly! No banks to deal with! Second would be conventional loan types where the buyer are putting 10-20% down… These buyers tend to be a little stronger than VA or FHA loan types… But NOT always I might add!! This is just the way most sellers think or that their agents inform them… It should be noted that there are plenty of VA/FHA buyers that are much stronger than conventional buyers so this rule of thumb has some flaws…

Trick #1  If you are a VA/FHA buyer ask for the least possible dollar amount from the seller in closing costs… Asking for the seller to pay your closing costs makes your offer weak! Asking for $0 would be best!!

Trick #2  If the comps will support a higher than list purchase price and you need the help from the seller on your closing costs than offer above list equal to the amount you need help with… So if the list price is $200k and you need $6000 in closing costs than offer $206k… ONLY if the home will appraise otherwise it is a waste of time… The more the seller will NET is the name of the game!!

Trick #3  If you are up against multiple offers do NOT ask for the seller to pay for your home warranty & agree to take the home “as is” meaning you will agree to NOT ask the seller for any repairs… It is important to keep in mind that agreeing to take the home “as is” does NOT mean you can’t ask for repairs once you get the home inspection report back! If you end up finding some major issues you can still ask for the seller to repair, give a credit or you can cancel… You are NOT waiving your right to ask for repairs… This only happens when you waive your due diligence period… DO NOT do that!!

Trick #4  If you have the cash on hand offer above list price and agree to waive your appraisal contingency… This is where you will need an agent who really knows their stuff and can tell you what the home is expected to appraise for… This is the BEST way to compete against all cash offers… If a home is listed at $200k and would only appraise for $200k and you offer $215k trying to steal the home from the all cash buyers, you will need to pay the $15k out of pocket as the bank will only lend on appraised value…

Hopefully these tricks will help you out there in the field… If you find yourself needing help call me anytime 702-218-4585 I would love to help you…. DH