Las Vegas Mortgage Rates Continue to Rise

Las Vegas mortgage rates have continued to trend higher recently with a big down week of 182 basis points last week.  With existing home sales coming in at 5.39 million units vs. expected of 5.1, we are seeing strong housing numbers in the face of rising interest rates which is bearish on bonds meaning that investors / traders will continue to sell off in anticipation of the Fed beginning their tapering process of the Quantitative Easing program.  Of course as the economy shows more signs of recovery, investors will increasingly choose stocks over bonds as their investment of choice since they offer a better return.  My recommendation is to lock rates on any loans that are closing within the next 30 days and to take advantage of our Lock and Look program for loans that will likely close beyond 60 days.

Here's a look at the mortgage bond chart from this morning:

There is some good news and the theme for the good news is ONE YEAR.  With las vegas mortgage rates on the rise, there are two pieces of good news to help offset this not-so-pleasant news.  The Lock and Look program allows buyers to lock in a rate today while they shop for their home.  With this program, the rate is locked for ONE YEAR and the buyer doesn't need a property address.  This is also great for buyers who have a home under contract awaiting short sale approval or for buyers who are buying a new home and they are more than a month out from completion of construction.

The second piece of good news is that FHA has relaxed their guidelines regarding borrowers who have had a short sale, bankruptcy or foreclosure.  Buyers who have had any one of these or all three can now use an FHA loan to finance the purchase of a home ONE YEAR after the event if certain hardship parameters are met that led to these events.

Please like, comment and share and subscribe to my blog.  I would love to help you are someone you know who needs a mortgage so feel free to contact me at 702-812-1214 if I can help you with that (I'm also licensed in California).

The Mortgage Pre-approval Process

The Mortgage Pre-approval Process
The mortgage pre-approval process is probably the most important thing to a buyer's success in purchasing a home for several reasons.  The first thing this does is let the buyer know whether or not he or she is qualified to buy a home.  It also let's him know the maximum amount he qualifies to buy.  Knowing these things is important so that the buyer doesn't waste his time or the Realtor's time looking at homes he won't be able to afford.  From an emotional aspect, it also helps to only look at homes a buyer can afford rather than possibly falling in love with something he can't and then being disappointed with the homes in his price range.

Getting pre-approved is more than just answering a loan officer's questions so that he can fill in the blanks on the loan application.  It is extremely important to provide the income and asset documentation, along with any other special documentation (HUD settlement statement for prior short sales - read about the short sale, foreclosure and bankruptcy guidelines, bankruptcy discharge papers if the buyer had a bankruptcy, divorce decree for those who are divorced) so that the loan officer can verify the information provided on the loan application and issue a proper mortgage pre-approval.  Income documentation to be verified includes the last two years of tax returns (including business returns for self-employed borrowers) and W-2s and the most recent full month of pay stubs.  If the borrower is retired, proof of pension or investment income should be provided along with Social Security award letters.

Proof of asset documentation requires the potential borrower to provide the last two months of bank statements (all pages) for all accounts along with the most recent quarterly statement for retirement accounts like a 401(k) or a Roth IRA.  The more assets a loan officer can verify, the better.

Once a loan officer has verified all of the necessary documentation, they can provide a letter to the buyer's Realtor stating that the buyer is pre-approved for a given amount AND that the income and asset documentation (along with any and all other pertinent documentation) has been verified.  By providing an approval like this, the seller and his agent will know that there shouldn't be any surprises throughout the process, at least as it pertains to the buyer.  A strong approval letter where the income and assets have been verified is much more likely to get the offer accepted than one where no verification has occurred.  The process is the same for FHA, VA and conventional loans.

The Mortgage Bond Market
The mortgage bond market is up slightly on the day with the benchmark FNMA 3.5 up 16 basis points as of this writing.  The Michigan Consumer Sentiment Index came in at 85.1 after a reading of 84.1 last month and an expectation of 84.2.  All else being equal, rates are better on Mondays than on Fridays since the market has a hedge for what may happen over the weekend.  The next big thing to look for that could move the market is the employment report from the BLS next Friday morning.  It has surprised to the good side the last few times; in fact, on July 5th, it surprised so strongly that the benchmark bond fell 200 basis points on that day - this is a huge move that is equal to about .5% in rate.  We have recovered nicely since then but I would be very cautious about floating a rate into this report.  My recommendation would be to lock it if you have a loan that is far enough along in the process that will allow you to do that.

Please feel free to share this with anyone who may be looking for a loan or needing to go through the mortgage pre-approval process.  I'd be honored to help them obtain financing for their home purchase.  I can be reached at 702-812-1214.  I'd love to see what your thoughts are relative to any of this content - feel free to comment below.