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Every fourth Sunday, Regana Kooman-Henry discusses various aspects of the home buying process and home ownership experience.
Kevin Krall 0:00
You're listening to special programming brought to you by Regatta. kumin. Henry of Coldwell Banker Premier Realty. The content of this program does not reflect the views or opinions of 91.5 Jazz and more, the University of Nevada, Las Vegas, or the Board of Regents of the Nevada System of Higher Education.
Regana Kooman Henry 0:33
Welcome to the Southern Nevada real estate Show. I'm your host Magana and today I have a very special guest Keirsey a Maki, a loan officer with the loan depot mortgage company talking about mortgage financing, and various options for homebuyers. Welcome, Keirsey.
Kiersy 0:50
Thank you again, I'm so happy to be here with you today. Excited.
Regana Kooman Henry 0:55
I'm thrilled to have you here and it's exciting. You got to share a wealth of knowledge with the audience that's listening this morning. And so, let's get started. So Keirsey for the listeners out there, maybe they've never bought maybe it's been a while since they purchased a home. What programs are available for first time homebuyers?
Kiersy 1:16
Well, we're gonna there are a couple of different options for our first time homebuyer population. The first one would be with FHA programs. Now they're not really limited to first time homebuyers, but they are meant to help our borrowers with either limited credit issues, or limited credit. And the qualification criteria with an FHA loan is a little less stringent than a regular conventional loan. Our second option would be a conventional loan. They have options that are geared toward first time homebuyers, and they offer a little bit less money down slight improvement on the rates for our first time homebuyers, but they do come with income restrictions. There are a few options for first time homebuyers with downpayment assistance. And I just kind of want to clarify with you what a first time homebuyer is considered. first time homebuyer is someone who has not owned or had any interest in any real property in the past three years. Now, this includes just vacant land, or if you were on title with another person as well.
Regana Kooman Henry 2:33
Okay, that's good to know, and a very good clarification regarding of that, and also QRC. What is the minimum downpayment for listeners out there for an FHA loan, let's say a conventional loan, and also for a VA loan, the minimum downpayment.
Kiersy 2:53
So our FHA is going to be three and a half percent of the purchase price, if you have a 580, or better credit score. Now, if your credit scores are a little bit lower than that, you're between 500 to 579. If you put 10% down, then that's going to be the minimum for those credit scores. And with our conventional, they have options for 3% down on their first time homebuyer programs, and that's again of the purchase price. And, and then they also have 5% down on their regular conventional programs for owner occupied properties. And then we have VA, of course, and it does not actually require a down payment, as long as you have enough entitlement. And if your entitlement doesn't cover the full amount, then they do a calculation, your down payment is calculated on what entitlement you have remaining. And in most cases, you know, it will allow you to do zero down. And really you would only run into the other scenario, if you had other VA loans that maybe was a foreclosure or a short sale that were backed by VA. And now you know as with all these programs, you can always put more money down if you want those are just the minimum required down payments for those programs.
Regana Kooman Henry 4:20
Okay, and Keirsey for example, how much can a seller contribute to a buyer to cover closing costs because you know, some buyers, especially if they're first time they may be not having enough funds for both the downpayment and closing costs. So for FHA, VA and conventional how much is can the seller contribute for the buyers closing costs?
Kiersy 4:48
Well, right now we're in a great market for that because sellers are willing to contribute a little bit towards buyers closing costs were, you know, the last year or so they weren't doing that. So for FHA, they can a seller can contribute up to 6% of the sales price on a VA, they can contribute up to 4% of the sales price. And then on conventional owner occupied, the seller can contribute up to 3% of the closing costs. So it's really important to know that, you know, closing costs and down payment are a little bit different, right? Your closing costs are going to be in addition to your down payment.
Regana Kooman Henry 5:35
Yes, and that's good to know, for listeners, especially if they've never purchased a home before or even if they have to clarify. Now Keirsey. I know for listeners out there, even if they've owned or purchased property before, they may be wondering, what are the closing costs and like what types of costs are considered in a closing costs scenario?
Kiersy 6:00
So that's a great question, we're gonna you know, you've got your down payment, which has to come out of your own funds. And by own funds, it can be a gift from a family member, but that has to come out of your own funds. So closing costs would be things like discount points to buy down a rate, for example, loan processing fees, you've got underwriting appraisal, credit report, title fees, recording with the county, if you get a home warranty, the fees for that prepaid interest, your homeowner taxes, and homeowners insurance. And if you buy a property with an HOA, then those sometimes come with upfront dues and fees that need to be paid. And those would all be considered closing costs that the seller can contribute towards.
Regana Kooman Henry 6:51
Okay. And Keirsey. Are there any programs that, for example, allow for downpayment assistance, so that buyers can use their own funds to buy down the rate and, you know, there again, there's probably people that really want to go ahead and do a purchase of their home first home second home, but they don't have the funds available. So what type, you know, what kind of programs are there any programs that are out there that will help the buyer out.
Kiersy 7:27
So here in Nevada, we have Nevada housing division, and they actually set the rates for their program, which a lot of people have probably heard of, or maybe not, which is called home as possible. And that is a downpayment assistance program. But unfortunately, on those programs, the rate is what it is, there's really no options to buy down the rate at this time. There are other programs out there right now for downpayment assistance, but they usually come with a payment on the second or the rates are a little bit higher, and usually end up eating up all the amount that you receive for downpayment assistance, after fees, and you know, buying down rates. So if you want to utilize the buy down option, you're probably better off currently, to not combine it with a downpayment assistance. So this may change at some point in time, but in the market we're in right now. That's just what it is.
Regana Kooman Henry 8:29
Okay, and Keirsey, do you offer assistance, for example, to help someone to bring their credit scores up? And if so, what is the cost associated? with it? I'm sure there's people saying, Oh, I'd like to talk to Keirsey. But, you know, what do you say to to that question?
Kiersy 8:53
So first off, disclaimer, I am not a licensed credit counselor. So it's always best to consult someone that is, and with having said that, I can refer you to someone that can help. And you just need to kind of be careful when you're looking for, you know, credit counselors, because not all companies are created equal. So you really just want to find somebody that understands mortgage credit scores, and what actions need to be taken, rather than disputing all the derogatory items on your credit. So in the mortgage world, you know, that actually hurts you instead of helps you because, you know, even though it boosted your score a few points, when we get it and we see a whole bunch of you know, disputed accounts, then we have to have you on dispute them. And we have to rerun the credit and you just lost all the game that you did. So you really want to be careful and you know, interview the people that you're going to be using for credit counseling that they know you know, what, what is required for mortgage now Oh, you know, if you if you're only a few points off for a particular program, you know, I can look at your credit, and we can go over it and help you decide that, you know, hey, for you a credit counselor is going to be the best option. Or, you know, maybe you just need to pay down a credit card by a couple $100. And that might boost your score to where you need it to be. So the cost for that, I mean, it's really just going to depend on what company you use, and how much time you need to reach your goal. Obviously, the more points you need, it's probably going to take a little bit a little bit longer than if you only need a few points. And then if they want you to clear up any of those debts, you have to take that money into consideration as well. And then for me, my opinion is always free, of course.
Regana Kooman Henry 10:53
Okay, that's good to know that someone can call you and it's, you know, no charge for consulting with you regarding that. And Keirsey. Regarding that, is there any charge for someone to do a consultation just in general consultation fee with you.
Kiersy 11:14
So I never do any charge for consultation fee, if you want to come in and do an application, or you want to do an application online or over the phone, you know, we can go through that and just really get a strategy for your home buying process, whatever, you know, that might be for you.
Regana Kooman Henry 11:35
Okay, that's good to know, you've have some really valuable information and insight for our listeners this morning. And to make things much clearer than maybe they would have had it before they listened to our show this morning. And Keirsey. Now let's talk about something that's quite a few of the listeners mind this morning. You know, things are rumors you hear about it on TV, let's talk about the current market we are in and Keirsey. What would you say regarding Is it a good time to purchase a home right at today's market or not?
Kiersy 12:19
So this is a great question, regatta I get this question almost every day, our families are talking about it, or neighbors are talking about it. The people we work with are talking about it. And most of all the media is talking about it. And frankly, it's really all very confusing. Everybody is saying something different. So the question really becomes, you know, who do we believe? So you hear from many people that there's going to be another housing bubble, like back in 2008, everybody's waiting for the market to crash, I'm sure you hear that a lot. I hear it almost daily. And I mean, nobody has a crystal ball, unfortunately, and that includes me. If I did, I'd be rich, you'd be rich, we'd be rich. So let's start with some facts. The current market that we are in today is not special. It's just the market. You know, the last couple years with rates being super low, was was really artificially created. We had a pandemic, the government was pumping money into the economy, and rates were just at an unprecedented low. And this, that that was just not a normal market. And unfortunately, it lasted too long. And people kind of got used to that. So you know, there's really fundamental differences in today's market conditions. Versus versus back in 2008. You know, our housing inventory is about a quarter of what it was, you know, distressed property. And that really means, you know, that people have been one payment or more late on their mortgage. Right now. It's almost non existent. It's around 2% versus 30% that we saw back, you know, in that 2008 crash, and right now, short sales are really almost impossible, because of the sharp increase in home prices, giving people a lot of equity into their homes. So, you know, what, what is going on now in the market? You know, the market that we're in now is a little more normal market and it's really unfortunate that people are sitting and waiting for this bubble to pop. We know that there's a very slim chance that that there is a bubble and it's gonna pop. And how do we know that? We know that because the market is driven by inventory, and we're still in a market with severe really low inventory and rising population of people that are, you know, at that first time homebuyer stage, you know, coming into the market to purchase homes. And I mean, did you know Briana, that right now 45% of the buyers are first time homebuyers. Wow. That's pretty crazy, huh? Yeah, it's not it's not normal prices have have somewhat normalized now they're, you know, the low inventory is going to prevent a large home price drops for most of the country. For most of the country, you know, home prices are really holding steady, some places are still actually experiencing gains. And there are a few markets, notably like California, that are seeing some prices pull back, you know, and all that the rate increases did was give back the power to the buyers, prices were so inflated due to the seller having all the power with the low inventory, you know, so in 2023, experts are expecting home sales to decline by around 7%. And, you know, that's nationally, medium home price to increase by 1%. So this, you know, this takes into account all the markets, you know, they're not all the same, some will experience price gains, some will have some losses, it just depends on what market you're in. And by 2024, they're expecting that home prices will start rising again, at the moderate rate of 5%, nationally, so you know, people that think they're gonna buy and then lose a whole bunch of equity. That's just not what the numbers are showing. It's not just statistically, you know, what we've seen in the past and going forward. So let's talk about what everyone is talking about. And that's the current interest rate environment, you know, rates went from 2% to 8%, almost overnight. But did you know that the average interest rate since 1972? is actually 7.92%? Good to know. So I mean, we're still slightly below that average right now. And the current interest rate environment is just simply the cost of entry into a less competitive market. So you know, what do I mean by when I say the cost of entry. So for example, when rates were super low, everybody wanted to get in on the action, you know, everybody had FOMO, they wanted to buy now before rates went up. So the cost of entry into that market was paying over appraised value with super large sums of cash, all cash offers, sellers weren't giving any contributions. And you know, a lot of people were even settling for a home, that really wasn't what they wanted. But, you know, they bought in anyways, just because you might not get the chance for a home again, you know, if you don't jump on the one you got accepted. And, I mean, nobody likes putting offers on multiple properties, and then being disappointed when they when they don't get accepted. And I'm sure that, you know, you've experienced that, yes, multiple, multiple offers, and you know, crossing your fingers that it would get accepted. You know, conversely, nobody likes higher interest rates. You know, when you're used to those super low rates, it's just the cost of entry into a less competitive market, where the power has switched from the seller to the buyer. And if rates go down, you can always refinance, but you can't go back in time and buy a home at a lower, you know, a lower price and homes are still set to appreciate. And you can't go back and buy just because you could have would have should. Right? So, I mean, let's talk about what's really important about whether it's right for you to buy or not. Your focus needs to be when you're purchasing a home for yourself or your family, things that ultimately matter most to you. So people buy homes for the experience. They buy homes for their families, they buy homes, you know, in the communities they want to be with, you know, where they want to raise their children, they buy homes for memories, and being in the school districts that they want for their children to go to school in. Yes. And then of course, you know, some like to buy vacation homes so that during the summers They have a place that they can go. And lastly, you know, to gain passive income with rental properties. So I mean really buying right now you have some control, and sellers are paying closing costs, it's a great time to be able to negotiate with the sellers.
Regana Kooman Henry 20:20
Yes, well, that was a really in depth information of to a lot of the listeners that probably were thinking the opposite or, you know, doom and gloom, that, you know, there is still possibilities for them, and it is still a good time to purchase real estate and to get a mortgage loan and to keep on moving forward with their real estate goals. Keirsey you've been such a valuable source of information this morning. Thank you so much, Keirsey, for being on my show today. And please QRC say your name, company name and phone number twice for the listeners. You know,
Kiersy 21:02
before we do that, I wanted to add just one last thing. So Nevada housing division actually came out with a program on Monday for first time homebuyers where they're giving $15,000 For downpayment. So it's going to be a limited funds. And if you want to get in on that action, and you want to know if you qualify for that program, you know, go ahead and give me a call. I am Keirsey and Bucky with the loan depot, and my number is 208-589-1181. Again, 208-589-1181. And my NMLS number is 1398336
Regana Kooman Henry 21:45
Keirsey. Thank you so much for being on the show today. And for the listeners out there. Keirsey shared some very valuable and vital information today in regard to options for first time homebuyers. Minimum down payments for the various loan types. How much maximum a seller can contribute to buyers closing costs regarding each of the different loan types, the types of costs considered in closing costs, downpayment assistance information, which was really valuable assistance regarding bringing credit scores up and Keirsey mentioned that it's no charge for consultation with her and a detailed description of why this is a good time to purchase a home, in today's market and why. And just so the audience knows a little bit more about me, I am very mindful of the way I treat my clients just like you're see with a real estate transaction since for most people, this would be the most expensive purchase that they would ever do. The one thing that I can sincerely say and is from experience is to not put things off until tomorrow, what you can do today, and that can be for your goals in life such as owning your own home, or selling a home as well. I am here as your real estate professional to help you and guide you. With the American dream of home ownership. I have been helping countless amounts of people over my 30 year career as a real estate professional, helping clients with all types of real estate transactions from local buyers and sellers to corporate transfer buyers and sellers. And for sellers. I will show you how to get top dollar for your home in the current marketplace. And I am regatta kumin Henry, your host for the Southern Nevada real estate show that airs every fourth Sunday of the month at 7:30am. My number is 702-596-1267 that 702-596-1267 And my license number is BS 27880. Thank you so much for listening to my show. And I wish everyone listening a great Sunday and a great week
Transcribed by https://otter.ai