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Currently, the minimum down payments to secure mortgages are $1 for VA, 3.5% for FHA loans, and 10 - 15% for conventional loans. Down payments for jumbo mortgages (anything greater than $417,000) are approved on a case by case scenario based on credit, income, and assets.

There is also a new tax credit of up to $7500 that a first time home owner can take advantage of to help cushion the down payment.

If you are having a challenge finding a down payment, there is always the 12-month lease option program that allows a borrower to actually refinance into a new property after 12 months of payment history.

Either way, new legislation is being discussed that would bring the down payment assistance program back to Las Vegas as soon as Jan - Feb 2009.

If you have any questions, please feel free to call or email.

Written by Mark Madsen, a Las Vegas Loan Officer - Please contact our office for more information about Las Vegas home loans.  702-432-5626

On a purchase - the buyer generally has to pay for the appraisal upfront and then sometimes the seller gives the buyer a credit for the appraisal at closing.

Our appraisers request a check directly from the borrower, which we can collect at the initial application.

For a refinance transaction, we’ll collect a check from the borrower and hold until the transaction is complete.

Between the HOA documents, inspections, moving, appraisals, earnest money deposit…. things really add up quickly. It is a good idea to get a budget together prior to looking for a new home.

Written by Mark Madsen, a Las Vegas Loan Officer - Please contact our office for more information about Las Vegas home loans.  702-432-5626

It is simply a time where the mortgage client and loan officer can go over some basic questions to get a feel for what everyone’s objectives are.

I like to start with a general discussion about what your opinions, needs, and expectations are.

Basically, just tell me what you want in a new property, a mortgage, down payment, monthly payment….. the list can go on.

Lets talk about your concerns over interest rates, foreclosure vs new construction, and any thing you may have heard in the news about the economy.

So many loan officers take an application like they are serving up burgers and fries.

“Would you like to super-size that Las Vegas mortgage with an interest only loan?”

While I do have clients who need me to do all of the talking and question asking, I would prefer to spend more time listening.

Besides the basic personal and employment information, I like to know about the following items and how they relate to your short and long term financial goals:

1. What is your budgeted down payment?

2. What down payment do you want?

3. What is the highest monthly payment you want?

4. Preferred monthly mortgage payment?

5. Are you saving for any large purchases?

6. What are your goals for paying off credit debt?

7. College, wedding, retirement goals?

8. How long do you plan on staying in this new property?

9. When do you anticipate paying off the mortgage?

That is really all there is to the mortgage application process.

Once I can take down the essential information, I’ll throw everything into a computer and start working up some options.

Written by Mark Madsen, a Las Vegas Loan Officer - Please contact our office for more information about Las Vegas home loans.  702-432-5626

There are three main options which are determined by the process of negotiating with your current mortgage lender:

1. FHA Secure Refinance - This is typically the case when the borrower has two separate mortgages that total more than the home is worth. For an FHA Secure Refinance, the new lender will allow the second to remain as a subordinated lien.

2. Short Refinance - This is also considered a Mortgage Write Down where the current lender holding the note allows for a payoff which is less than the total amount owed. There is a process of negotiating with the current lender to allow this transaction to take place.

3. FHA Secure Short Refinance - There are some special occasions where the current note holder will allow write off a certain amount of the balance due and arrange for an unsecured loan to be paid separately by the borrower. The benefit with this example would be to obtain a very low interest rate on the remaining balance that was not wrapped up into the new mortgage payment.

All three of these options may require the help of a mortgage professional that has had experience negotiating FHA Short Refinances with banks.

In most instances, the borrower does not have to pay for any fees at the time of application and can wrap the typical closing costs into the new mortgage.

Written by Mark Madsen, a Las Vegas Loan Officer - Please contact our office for more information about Las Vegas home loans.  702-432-5626

While things may seem a little overwhelming at first, I’ll be communicating with you through the entire process.

1. Mortgage Application -

The mortgage application is where we go over your personal information and mortgage game plan. I can take a quick application over the phone and have you fax over a few conditions, or we can meet in person to go over every thing in detail.

My objective with the mortgage application process is to really find out what your needs are so that we can start putting mortgage options together that fit your long and short term financial goals.

2. Mortgage Loan Commitment Letter -

Once we have been able to run an automated approval online through our Fannie Mae or Freddie Mac channels, I’ll issue a loan commitment letter and send your real estate agent detailed instructions on what price range to stay within.

The difference between a pre-approval and loan commitment letter is that I’ll have a full approval pending underwritten review. While most loan officers stop their qualification process at the credit report, I’ll actually take it those extra few steps and get an official approval letter that will be good with any bank who lends mortgage money.

This prevents us from running into those small glitches that cause anxiety.

3. Purchase Offer is Accepted By Seller -

Sometimes it takes a few tries, but eventually a buyer and seller agree on a final purchase price, closing date, and terms. At that point, we are officially in contract and the due diligence period begins.

I’ll connect with all of the participating parties to get the communication points in sync. The paper chase begins.

4. Open Title and Cash Earnest Money Check -

Your real estate agent will open title with the escrow company specified in the purchase contract and they will cash the earnest money deposit check. This money will be credited towards the buyer’s down payment and/or closing costs.

Obviously, all of that money would be returned to the buyer at closing if there wasn’t a down payment or any closing costs.

5. Home Inspection is Completed -

Generally, the buyer has a 10 day due diligence period to complete the home inspection and preview any HOA documents. Your real estate agent should be handling those details and may include you in the actual inspection process.

6. Loan Officer Orders Appraisal -

I order the appraisal as soon as I receive a fully executed purchase contract. Since we also have about a 10 day due diligence period, it is imparative that I expedite the paper work so that we can overcome any obstacles with regards to property condition or neighborhood values.

Most appraisers require a check up front from the buyer. Average cost is around $350 - $450, depending on the type of loan program.

7. Mortgage Package is Submitted to Underwriting -

Once we have received the title report, escrow paperwork, completed appraisal, and any trailing buyer conditions (pay stubs, bank statements, misc.) I’ll send the final loan package to the bank for final underwritten signatures.

8. Loan Officer Orders Property Insurance -

All that I need from the buyers is the name and phone number of their preferred hazard insurance provider.

Shop around and find someone that you are confident using, we’ll take care of the rest. Depending on the loan program you have chosen, we may have the option of including the insurance with the monthly mortgage payment (Impounded), or you can opt to handle that on your own. FHA and VA loans require that we impound escrow fees, which include property taxes and insurance.

*Monthly HOA dues are always handled by the home owner separately.

9. Buyers Meet at Title to Sign Final Loan Documents -

I’ll meet you at the title company where we can go through all of the final loan documents together. I believe that it is my job as your loan officer to be present and stand behind the rates, fees, and monthly payments that were originally quoted at the time of loan application.

I’ll bring your original Good Faith Estimate to closing and we’ll be able to ensure that you are fully satisfied with the program and closing cost option that you were expecting.

The closing process should only take about an hour.

10. Title Sends Loan Documents Back to Lender -

The lender will make sure they have all of their papers in order and all signatures match up. Sometimes there are minor conditions that need to be addressed, but we try to handle everything ahead of time so that the docs move through funding smoothly.

11. Bank Sends Funds to Title and Deed Is Recorded

Congratulations, you own a new home. The funding and recording process can take between 1 - 4 days from the time final docs are signed at title.

The only hold up would be in the case of a bank owned property (REO) where we are waiting on the seller to approve and sign off on the final settlement statement.

I’ve seen HOA documents, prior liens, and all of the other mess associated with buying a foreclosure hold up files for several weeks. The important thing is that you have a good real estate agent in your corner fighting those issues for you.

Basically, don’t plan on moving in to a new home immediately after signing loan documents if it a foreclosure. Give yourself a little room for flexibility, but I’m sure the discounted price is worth a little wait.

**Mortgage Rate Lock -

Your interest rate just has to be locked before we order final loan documents. I’ll be regularly communicating with you about the state of the market and offering my recommendations.

We want to try and keep the lock time within 30 days, otherwise the rate starts to increase a little. If rates move drastically, I can always renegotiate your rate with the bank. Worse case scenario, we’ll just move lenders and submit a new loan package for approval.

Lets get that application process started today. I can submit a file TBD if you haven’t found a property so we can have all of the initial underwriting and approval steps out of the way.

Written by Mark Madsen, a Las Vegas Loan Officer - Please contact our office for more information about Las Vegas home loans.  702-432-5626

Loan-to-Value Ratio (LTV)

This is the difference between the loan amount and the lesser of the purchase price or appraised value. Most Las Vegas mortgage loans require a minimum of 10% down for conventional mortgage and 3.5% for a Las Vegas FHA loan. VA still has a zero down - 100% financing option.

Debt-to-Income Ratio (DTI)

To calculate your DTI ratio, simple divide your total monthly credit obligations, including the new mortgage payment, by the total verifiable monthly gross income.

Example Debt-to-Income scenario:

• Total monthly liabilities on credit report + mortgage payment, taxes, hazard insurance, HOA = $410.00

• Total monthly gross income (this is verified from two year’s tax returns or W2’s and most recent 2 pay stubs) = $1000.00

Your total DTI would be 41%   ($410 / $1000 = 41%)

Banks like to see a borrower between a 41% and 48% DTI.

Credit Score (Fico)

Credit reports are pulled through three bureaus and reflect a middle “FICO” score that mortgage lenders use to determine risk factor and base their approval, required down payment, and interest rate on.

Payment history, length of open accounts, and total debt load are important factors that contribute to the overall score.

Written by Mark Madsen, a Las Vegas Loan Officer - Please contact our office for more information about Las Vegas home loans.  702-432-5626

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