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Las Vegas Real Estate Sets Sales Record for June 2009

Las Vegas Real Estate Sets Sales Record for June 2009

Las Vegas Real Estate sales of single-family homes, condos and town homes hit a record of 4,702 in June, beating the previous record of 4,414 set in June 2004 according to the information released by the Greater Las Vegas Association of Realtors.  The main reason for the increase in home sales is the average sales price of $140,000 which is considerably less than the average sales price of $242,000 in June 2004.  The drastic drop in home prices has made it affordable for first time home buyers once again and lucrative for real estate investors.

Majority of the Las Vegas Properties that sold in June were single family bank owned homes and short sales.  Condo and town homes also saw an increase in sales compared to June 2008.  This can also be attributed to the drop in the average sales price which is bringing real estate investors to the Las Vegas Real Estate Market. Many real estate investors are buying condos with cash and then placing them on the market for rent with a Las Vegas Property Management Company.

Now that Banks and Lenders have lifted the moratorium, we should see a rise in bank owned homes hitting the market over the next 5 to 7 months.  This should fuel homes sales even more as many real estate agents are receiving multiple offers on their bank owned home and even short sale listings.  The bad news is the increase in bank owned homes for sale could drive down the average sales price even further as Banks and Lenders price the properties below market value for a quick sale.  Either way, don’t expect Las Vegas Home prices to increase any time soon.

Las Vegas Luxury Real Estate

We are a team of professionals that can assist you in all aspects of real estate in Las Vegas, from condos to multi-million dollar estates.  We pride ourselves on providing top-tier service for all our clients, but we do recognize that there is a big difference between residential homes and luxury real estate.  It is not just another property, it is a home that defines a lifestyle.

Las Vegas Luxury Homes and Estates require considerable time as well as a specially designed marketing program in order to attract the right buyers. We have the resources to attract those qualified buyers and match them with your prestigious home.

Any Las Vegas Real Estate Agent would be privileged to list and sell a multi-million dollar property, however; not every agent has the experience combined with the techniques to do so successfully.  We offer a customized marketing plan designed to get your luxury home sold in less time and with less stress.

We start by focusing on your customized marketing plan.  This involves defining and describing your property accurately and creatively, professionally photographing your home, setting up a virtual tour, and maximizing your homes internet exposure.  We specifically target buyers searching for luxury real estate by ranking our website on all the top search engines.  In turn, your luxury home will be one of the most viewed world-wide.  It is essential that luxury homes and estates are clearly defined. Marketing a home as distinctive as yours requires uncommon knowledge and creativity. High-end Las Vegas Homes and Estates are unique because of their quality, historic significance or eminent location.

We have the resources to generate the greatest number of prospective buyers for your Las Vegas Luxury Home.  We use a wide variety of methods to market your home; display advertising in national and international editions, placements in premier home magazines, customized press releases, and direct mail are only a few of these techniques. We continually prove that we can market homes to the maximum number of qualified buyers worldwide, as well as handle every inquiry with discretion, efficiency and sophistication.  Our website provides potential buyers access to virtual tours, expanded listing information, and a property search. Considering that over 80% of all buyers search the internet for available properties, a top ranked website like ours is always beneficial.

We are dedicated to helping you sell your Las Vegas Luxury Home and providing you with the type of service you deserve.   We appreciate the opportunity for an interview, so please contact us when you are ready.  We have the experience, knowledge, and ability to properly market your luxury home.

For a confidential interview, please contact Tony Sena at (702) 376-7379 or complete the contact form to the right.

Finding The Right Las Vegas Property Manager

Finding the right Las Vegas Property Manager could mean the difference in your property being rented and maintained or sitting vacant and costing you money.  Even though most property management companies in Las Vegas offer the same services, not all companies follow through with their services.  I get several calls a week from real estate investors stating their property managers aren’t providing monthly accounting statements, rent money isn’t arriving on time or at all and there is no communication.  This is why our clients have access to their account via a link to our property management software, we automatically deposit all rent monies by the 10th of the month and we always keep our clients updated on the status of their property.

Another key aspect in property management is properly screening tenants.  Unfortunately, most property managers never even meet the tenant until they are signing the lease or picking up the keys.  They choose the tenants based on the information they receive on the credit reports, criminal background check, employment check, rental history and reference checks.  An area that is commonly over looked in the screening process by property managers is interviewing potential tenants.  Sitting down for 15-20 minutes can tell you alot about someone and is just another factor in screening a potential tenant.  Being a former City of Henderson Police Officer, I have years of experience interviewing subjects and I rely on my experience when I sit down and interview potential tenants.  I feel my experience makes me the ideal Property Manager to find the best tenant for your investment property.

So if you just purchased an investment property in Las Vegas and need a Property Manager or looking to replace your current Property Manager, give us a call at 702.376.7379 and I will be happy to go over our services.  We are available 7 days a week for all your Property Management needs.

Las Vegas Short Sale Problems: Sellers, Help Your Agent

Recently, I was very pleasantly surprised to receive a call from Countrywide (now known as Bank of America since the acquisition) regarding one of my Las Vegas Short Sale files. Usually, the communications goes in one direction, with me doing all the calling. The bank negotiator needed some updated information on the file, namely, a 2008 tax return and an updated worksheet detailing the monthly financial obligations of the sellers.  The negotiator gave me a deadline of 6 days to get her the information.

I left a voicemail and emailed my sellers about the information the bank needed and if they could fax it to me as soon as possible. It so happens that my sellers have moved out of State, so communication is anything but immediate. Knowing this might be a problem, I emailed the negotiator that I would do my best to get the info but we might need a couple more days to get them everything as a weekend was going to fall within the 6 day period.  As a show of good faith, I emailed all the information I had on hand to the bank and explained I was working on the balance.

On the following Monday, my assistant received an email from the negotiator stating she was missing some items. It was obvious that she did not read my previous email, so we fired off another message stating we were working on getting the info and would need a couple of more days. We also sought clarification of one item in particular, and asked her to explain it, and of course, help gain a delay in the deadline.

The next day, we get an email stating she cancelled the file and we would now have to start all over. Luckily, I complained to a supervisor that is was ridiculous to cancel the file when we were actively working to get the requested info. Sure, that negotiator gets a file off her desk, but now it goes on to someone else’s, only this time, a lot of work which was previously done will have to be needlessly repeated.

I could rant all day about this bank and person (the negotiator) who should have employed some common sense when evaluating a deadline, but this simply illustrates the challenges Las Vegas short sale agents have to overcome on a daily basis. I will not let this setback stop me, but it is a very stark reminder that we cannot get these deals closed without the cooperation of our sellers. The banks make us wait around for weeks and than out of the blue we have gather time sensitive information. Failure to do say may have significant consequences. As this situation demonstrated, sellers must stay in contact with us at all times and be ready to produce information as needed.

Las Vegas Agents: Why Are You Paying Franchise Fees?

Is it necessary to hang your Las Vegas Real Estate License with a franchise company like a Century 21?  I thought so.  When I got into the business back in 2001, I hung my license with a Century 21 franchise in Henderson, Nevada.  I really didn’t realize the cost of doing business at a franchise like Century 21 until I received my first closing check.  Being a new agent, I was on a 50/50 split but I didn’t realize I lost an additional 6% for the franchise fee.  How is that a 50/50 split?  After a few more closings, I sat down and looked at my options.  Was I really receiving a benefit hanging my license at a franchise like Century 21?  Was it really worth 6% on every transaction I closed just to hang my license at a brand name real estate company?

Maybe a few years ago it did make sense to hang your real estate license with a franchise like Century 21 but in today’s real estate market, it makes no sense.  The shift to the Internet has leveled the playing field in the real estate industry.  Buyers are using the Internet to search for homes and sellers are using it to find a real estate agent who can sell their home.  This is why I don’t understand why a Las Vegas Real Estate Agent would hang their license at a franchise that charges 6% for every transaction they close like a Century 21.

Let’s look at another example of why it doesn’t make sense.  Las Vegas home prices peaked in June 2006 with a median price of $315K and currently the median home price is $141K.  The average real estate commission in today’s real estate market is $4,230 compared to $9,450 in 2006.  Anyone that loses that kind of income is going to notice a serious hit to their pocket book.  With that kind of loss of income, why would you keep paying the same fees you were paying in 2006?  Your fees are still the same but your income isn’t.

In today’s Las Vegas Real Estate Market, if you are going to hang your real estate license at a real estate brokerage, you better be receiving something of value.  Whether it be low monthly licensing fee, real estate leads or a generous split, it needs to make financial sense.  The cost of doing business has not decreased, so every dime you can cut from your expenses is very important.

Every dollar you make from your real estate business is very important and to give away a few hundred dollars per closing just to be associated with a brand name company is not worth it.  Like I said earlier, I hung my license for over 4 years with a Century 21 Franchise that charged me a franchise fee on every transaction I closed.  I must have given away over $10K dollars during that 4 year period and for what.  Since I started my real estate brokerage, Shelter Realty, Inc., I never had a client tell me they wouldn’t work with me because I wasn’t associated with a brand name real estate company.

So back to my original question, why are you giving away a few hundred dollars in franchise fees on every transaction just to be associated with a brand name brokerage?

If you are a Las Vegas real estate agent whose interested in joining our real estate team, we have opportunities for you.  For more information, fill out the form on our Las Vegas Real Estate Career page or call us at 702.376.7379.

New Law to Protect Las Vegas Rental Tenants When Home is in Foreclosure

New Law to Protect Las Vegas Rental Tenants When Home is in Foreclosure

Renting a Las Vegas Home can be very scary in today’s real estate market.  With so many homes going into foreclosure, it’s hard to know if the home you are renting could be next. Many times, renters find out the home they are renting foreclosed after the fact which doesn’t give them much time to find a new home to rent, pack and move.  Well now there is good news for renters in Las Vegas. The US Government just passed the Helping Families Save Their Homes Act of 2009.

The “Helping Families Save Their Homes Act of 2009” became law on May 20, 2009.  It included provisions to protect tenants from eviction as a consequence of a foreclosure affecting the property being rented.  The new law requires tenants be given 90-days notice prior to having to vacate, and allows them to stay through the remainder of their lease, if the home will continue to be a rental property.  The protections of this law apply only to “bona fide” tenants – who have a written contract, the lease was the result of an arms-length transaction, and the rent is not substantially less than the fair market rent for the property. Under any conditions, tenants may still be evicted if they violate the lease terms.  These provisions expire on December 31, 2012.

With the passing of the “Helping Families Ave Their Homes Act of 2009” renters can feel a little more at ease if they get the bad news that the home they are renting has foreclosed. They will have ample time to get their affairs in order and locate a new Las Vegas home to rent.

If you are looking for a home to rent in Las Vegas, feel free to give us a call at 702.376.7379 and we can assist you in finding a home for rent.

Why Aren’t There Loan Programs for Foreign Investors?

Call me crazy but I don’t understand why there aren’t any lending programs for Foreign Investors.  Right now in Las Vegas, home prices are at historic lows and it’s drawing the interest of real estate investors from all over the world.  I get numerous emails and phone calls every day from people outside the United States inquiring about Las Vegas Home prices and the process of buying a home in Las Vegas.  Unfortunately, I have to inform them that if they don’t have cash for the entire purchase, they won’t be buying an investment property in Las Vegas.

Doesn’t real estate play an important role in the economy?  I think we all know the answer to that question is an emphatic “Yes”!  So why aren’t there Loan Programs for Foreign Investors?  Many of these large Banks like Wells Fargo and Bank of America could easily create Loan Programs for Foreign Investors that required Foreign Investors to put down at least 30%, open a bank account in the US and anything else they would need to lower their risk.  In most real estate markets like Las Vegas, home prices have pretty much bottomed out thus minimizing the risk for the Banks if the Foreign Investor defaulted, especially if they required 30% down.

Creating loan programs for Foreign Investors will benefit local real estate markets and the economy in several ways.

  1. More buyers will enter the local real estate markets absorbing many of the foreclosures that are plaguing neighborhoods.
  2. Requiring a minimum of 30% down will generate a large cash infusion for banks, increasing their ability to lend money.
  3. It will generate much needed tax revenues for local and state governments.

I am sure we could list numerous reasons as to why there should be loan programs for Foreign Investors but what I want to know is “why aren’t there any loan programs for Foreign Investors.”  What am I missing?

Las Vegas Real Estate Market is an Investor’s Dream

Anyone that is following the Las Vegas Real Estate Market is aware that home prices are at historic lows. Due to the fact that Las Vegas has been leading the nation in foreclosures, Banks and Lenders have been placing homes on the market far below market value which is driving down home prices. Even though many Las Vegas Homes are selling above list price, the fact they are priced so low is still causing home values to fall.  This trend could continue as foreclosures are still prevalent in the Las Vegas Valley.

With such great deals to be had, Investors are flocking to Las Vegas just like they did in 2004 and 2005 but the big difference is the price of the homes.  If an Investor purchased a home in 2005 and rented it, chances are their mortgage payment was higher than the amount of rent they collected.  In today’s real estate market, you can find great deals on homes that will net you positive cash flow.  We currently have several Property Management accounts where our Landlords are cash flowing over $400 a month.  That just wasn’t possible in 2005 unless you had put down a size-able down payment which really defeats the purpose of investing.

Even with the amount of rental homes hitting the Las Vegas Real Estate Market, rental rates have not fallen as demand is so high.  So many Las Vegas Homeowners have lost their homes and have no choice but to rent.  It will take years before they can buy a home again due to changes in lending guidelines and many won’t buy a home again due to the traumatic experience of losing their previous home.

If you are thinking about buying a Las Vegas Investment Property and want to know rental rates for a particular area, feel free to give us a call at 702.376.0088.

Las Vegas Short Sale Specialist

I am sure you hear many Las Vegas Real Estate Agents calling themselves a Short Sale Specialist.  Short Sales have become very prevalent in the Las Vegas Real Estate Market as many homeowners now owe more than their home is worth.  With the rapid decrease in home values, Las Vegas Real Estate Agents are trying to capitalize on this niche by calling themselves a Short Sale Specialist.  So what makes a real estate agent a short sale specialist?  Is it a few successful short sale transactions or maybe listing a few short sales?

Unfortunately that’s not the case.  Short Sales require a real estate agent that is experienced in marketing the home, obtaining an offer at or near market value, negotiating with the lender or lenders on the sellers behalf, coordinating with other lien holders and at the same time, keeping the buyer’s agent informed so their buyer doesn’t walk away due to the length of the transaction.  Some might say it isn’t necessary to obtain an offer at market value but if you are representing the seller, it is definitely in their best interest to get the highest offer possible.  This could be the difference in the Lender requiring the seller to hold an unsecured note or not.

Knowing the intricacy of the short sale process, Paul Rowe with Team Sena can be definitely called a Las Vegas Short Sale Specialist.  Paul’s entire responsibility is to represent our clients on the sale of their homes even though they owe more on the home than it’s worth.  He explains the entire short sale process and the importance of consulting with an Accountant and/or Real Estate Attorney in regards to the legal and tax implications of a short sale transaction.  He has been handling short sales for Team Sena for over a year now and has had great success.

If you are thinking of selling your Las Vegas Home and you owe more than it is worth, give Paul Rowe with Team Sena a call at 702.376.0088 or complete the contact form to the right.  If you have questions about the short sale process, check out our “Frequently Asked Questions on Short Sales”. Don’t wait till it’s too late, call us today!

Where Can I Get My Down Payment For A Las Vegas FHA Mortgage?

With only a 3.5% minimum down payment requirement, FHA Mortgage programs are being used by more Las Vegas First-Time Home Buyers.

Some people easily get down payment and equity confused, especially in a market like Las Vegas which has a significant number of undervalued bank owned and foreclosure deals.

However, on a purchase transaction, the FHA clearly defines that the minimum down payment needs to be 3.5% of the lesser of the appraised value or the sales price.

Keep in mind that the down payment does not include borrower-paid closing costs, pre-paid taxes, insurance, title, appraisal, and home inspection fees.

To be approved for an FHA loan, all sources of funds have to be properly documented and verified by an underwriter who will be looking to see if there were any undocumented debts incurred by the borrower to obtain the FHA down payment cash investment.

Acceptable sources of borrower funds include the following:

  • Earnest Money Deposit
  • Savings and Checking Accounts
  • Cash saved at home
  • Private savings club
  • Savings Bonds
  • IRAs
  • 401 (k) and Keogh Accounts
  • Stocks and Bonds
  • Thrift Savings Plans
  • Gift Funds
  • Sales Proceeds
  • Sale of personal property
  • Commissions from sale
  • Trade Equity
  • Rent Credit
  • Sweat Equity
  • Collateralized Loans
  • Disaster Relief Grants and Loans
  • Employer’s Guarantee Plans
  • Employer Assistance Plans

Questions About Sourcing FHA Down Payment Funds:

Q: How is the Earnest Money Deposit verified?

The EMD is the initial deposit submitted with an accepted purchase contract offer which is held in an escrow account. These funds count towards the borrower’s down payment and/or closing costs.

The EMD is verified by a cancelled check, certification from the deposit-holder acknowledging receipt of funds, or separate evidence of the source of funds.

*If the EMD exceeds 2% of the sales price or appears to be excessive based on the borrower’s history of savings, there may be more documentation required to source and document the money trail.

Q: How are Savings and Checking Accounts verified?

A verification of deposit (VOD), along with the most recent bank statement is one way a lender may request to verify these funds. If there is a significant increase in an account, or the account was recently opened, a written letter of explanation may be required as well.

Q: What if I have been saving money in a jar or under the mattress?

The borrower will need to provide a written letter of explanation and evidence of the ability to accumulate the cash. This can include analyzing a borrower’s income stream, the time period which the funds were saved, spending habits, documented expenses, and a history of using financial institutions.

Q: How is a down payment documented from a 401 (k) or IRA?

While liquidation of the account is not required, underwriters will only use up to 60% of the value of the assets, unless the borrower can prove that a higher percentage an be withdrawn after subtracting any Federal income tax and penalties.

Q: Do I have to show liquidation of funds from Stocks or Bonds?

No, you may not have to show actual liquidation of funds from a Stock or Bond, but the accounts will be verified by providing monthly or quarterly statements.

Q: Who can give a Gift Fund?

A gift fund can be considered as an acceptable source of down payment as long as there is no expected of implied terms of repayment to the donor by the borrower.

Gift funds can be given by the following:

  • A relative
  • Borrower’s employer or labor union
  • A charitable organization
  • A government agency or public entity that has a home ownership program
  • A close friend with a clearly defined and documented interest in the borrower

As a general rule, the FHA is not concerned with how the donor obtained the Gift Funds, as long as the funds are not associated with the sales transaction.

Q: Can real estate agents use their commissions as part of the down payment?

Yes, a family member who is a licensed real estate agent may also donate their commission.

There are many more down payment options that can be considered by an FHA underwriter as acceptable funds to close.

It is important to be completely transparent with your loan officer at the time of the initial application and financial strategy session so that we can put a game plan together for your individual scenario and goals.

Mortgage Approval

Las Vegas Mortgage Approval and Funding Process

Purchasing a new Las Vegas property can be an overwhelming process between the various contract negotiations, mortgage approvals, inspections, and new appraisal guidelines.

The following outline will help buyers with the overall time line:

1. Loan Application –

The loan application should be one of the first places home buyers start, especially if you are planning to apply for an FHA mortgage.

This is where the loan officer can spend a little time with a potential borrower to discuss their unique lending scenario, financing goals, and qualifying guidelines.

Depending on the amount of information requested by both parties, a typical loan application generally can take between 15 minutes to an hour.

It is highly beneficial to get all of the required documentation submitted at this time as well so that any potential underwriting challenges can be addressed.

2. Pre-Approval Letter –

A pre-approval lets the borrower and seller know how much they can qualify for, and is issued once the loan officer has verified income, assets, and credit.

As lending guidelines continue to change, most loan officers will take the pre-approval a step further and run a full online Fannie Mae (DU) or Freddie Mac (LP) automated underwriting approval to make sure the borrower has an additional layer of confidence prior to shopping for a new home.

Most sellers are requiring a full approval be submitted with a purchase offer.

Keep in mind, DU or LP approvals are not considered full underwritten approvals, unless an underwriter has physically analyzed the submitted documentation.  Every bank has their own quality control systems for this process, but the average time it should take for a full underwritten approval is 48-72 hours.

So basically, it is a good idea to get everything in and wait an extra day or so for an underwriter to issue a full approval.

3. Loan Search / Good Faith Estimate –

Once a pre-approval has been issued, it is important that the lender and borrower agree on the actual terms of the new mortgage prior to submitting offers on a new property.

A Good Faith Estimate is a form that outlines the interest rate, down payment, purchase price / loan amount, and other estimated closing costs so that the borrower can make an educated decision.

Even though the GFE is an “Estimate” based on the disclosed costs of the new loan, there are several things that the loan officer does not have control over.  Make sure you ask your loan officer what specific line items you can expect to be consistent or change at the time of closing.

4. Purchase Offer –

Depending on which market you are in, the purchase offer and acceptance process can be an entirely new beast to deal with.

Short Sales, Bank Owned (REO), and Rehab properties may take several weeks of negotiation before a perceived win / win deal is reached. It is important to hire a full-time real estate professional who is familiar with the landscape and knows how to navigate these types of transactions.

Recent neighborhood sales, pending foreclosures, and the actual terms of the purchase agreement are a few things that you need to pay close attention to before you commit to putting a sizable earnest money deposit down.

4. Due Diligence Period –

This is the time, as defined in the purchase agreement, that the borrower and seller have to complete all inspections, appraisal, review HOA / title documents, and anything else that may have an impact on the successful closing of the purchase transaction.

Due to new HVCC and FHA Appraisal guidelines, it may take a few extra weeks before an appraisal can be delivered.

5. Appraisals / Inspections Completed –

Typically, the appraisal and home inspection are paid for in advance by the borrower and have to be completed within 10 days of an accepted offer.  Obviously, an extended period of time will have to be given if the mortgage falls under HVCC guidelines.

The mortgage company will have to order the appraisal through a third party Appraisal Management Company, but the buyer’s agent generally handles the logistics of the property inspection.

Most borrowers like to be present at the time of the home inspection, however, the appraisal is handled privately by an appraiser.

6. Final Conditions Submitted to Bank –

The appraisal, preliminary title report, and any addition borrower documents are submitted to an underwriter for final approval.  This process takes 48-72 hours and is the final step, other than a loan lock, needed to order closing documents.

Proof of hazard insurance is also required prior to ordering loan documents.

Some mortgage programs allow a borrower the option of including their quarterly real estate tax payments and annual hazard insurance premium in the monthly mortgage payment by establishing a separate escrow (impound) account.

Make sure that you know what your total monthly mortgage payment is before ordering documents.

7. Loan Lock –

Mortgage rates have a tendency to change a few times a day depending on market conditions and adjusting credit / bank guidelines.   It is important to regularly communicate with your loan officer to make sure you get the rate and closing cost scenario that you have budgeted for.

Some brokers have the ability to change banks or negotiate a lower rate if things change for the better, but you are ultimately putting full trust in your loan officer when it comes to the rate game.

Rates can be locked between 7 – 90 days. A good rule of thumb, the shorter the lock period, the lower the interest rate.

Since a .125% adjustment in rate may only impact your monthly payment by a few dollars, it is a good idea to find a rate you are comfortable with and lock as soon as possible.

With the rapid fluctuations in pricing due to the turbulence on Wall Street, rates could move .5% in a matter of hours causing monthly payments and closing costs to significantly change.

8. Final Loan Documents Signed –

The final loan documents are delivered to an escrow or title company for preparation.  The borrowers will either sign with an escrow officer or meet an approved notary at a convenient location.

Sinings can take between 1-2 hours, depending on the amount of questions the borrower has about the transaction.

If there is additional funds to close, like a down payment or closing costs not covered by the seller, the borrower will bring a certified check to the escrow company.

*Make sure your loan officer knows where these funds are coming from so that there is a documented paper trail for the underwriter to approve.

The final property inspection is also completed during this time. If there are things that still need to be fixed before the you agree to close on the purchase, let your loan officer know if you want to hold off on funding, unless the rate or documents are set to expire.

9. Funding / Recording-

Once the final documents have been signed by the borrowers they are shipped back to the bank for a quick inspection and then set in line for funding.

A wire is sent from the lender through a few places and eventually ends up at the escrow company.

Since this process may take a few hours, it is common to hear about a delay between the time a bank “Funds” a loan and an escrow company “Records” a closing.

How Much Can I Borrow For A Las Vegas Mortgage?

The first question home buyers want to know generally revolves around how much mortgage money they can borrow or get qualified for.

Simply looking on a search engine for “Mortgage – how much can I borrow” will more than likely only produce a bunch of mortgage calculator results vs real information that describes the entire process.

While an online mortgage calculator may be a decent tool to use as measurement, there are several other factors that play a part in a full mortgage approval.

Banks look at a few things when qualifying a borrower for a new mortgage:

  • Credit

The most common measure of a borrower’s credit standing are the three scores which can range between 300 and 850.

A minimum 620 fico score is required for most FHA lenders, and anything higher may increase your chances of getting approved with a lower rate.

There is other criteria that banks look at regarding a borrower’s credit standing, such as payment history, total balances and limits, type of credit borrowed, and recent inquiries.

Since mortgage rates are also tied to credit scores on some loan products, knowing where you stand or how to improve this rating could make a significant impact on your monthly payment.

  • Debt-to-Income Ratio

The (DTI) is calculated by dividing a borrower’s total monthly liabilities (minimum credit payments, auto loans / leases, child support, mortgage payments…) by the verifiable monthly income.

* Verifiable income includes pay stubs, W2’s, Tax Returns, and in some cases 1099’s and bank statements.

Example Scenario:

Current liabilities + new mortgage payment = $1,500 a month

(divided by)

Gross Monthly Income of $3,500

The DTI would be 42%.

Most mortgage guidelines require a 45% or lower Debt-to-Income ratio.

  • Loan-to-Value

The (LTV) is calculated differently depending on whether the new transaction is a purchase, refinance, or rehab loan.

Basically, it is the amount of the new loan in comparison to the total value of the property.

When qualifying for a Las Vegas FHA loan on a purchase, a 3.5% down payment would equal a 96.5% LTV.

Keep in mind that banks will verify a paper-trail of the assets used for the down payment, so it is important to communicate with your loan officer about your current financial position.

There are a few factors to consider when deciding on the amount of your new mortgage:

1. Desired Down Payment

2. Budgeted Monthly Payment

3. Length of time you want to own the property

Updated Clark County Nevada lending limits will also play a role in determining the type of mortgage program and amount you are qualified for.

Since Las Vegas mortgage rates may also have an impact on your monthly mortgage payment, it is important to pay attention to the market.

Schedule a strategy session with our professional Las Vegas Mortgage staff by phone or at our office to discuss the best lending solution for you and your family.