We posted in yesterday’s Blog about Las Vegas Real estate mortgage rates and how important it is to go ahead and grab the best mortgage rate when you can, as it is a very volatile market. We are going to focus on some Frequently Asked Questions (FAQ) about the Las Vegas Real Estate.
Question: If I lock in to a specific mortgage rate can I still benefit if rates decline at a later date?
In some cases a lender will offer you a “float down” option on the front end of your contract. But, you must pay extra costs for this and without this type of a clause in your contract your lender has no obligation to renegotiate with you later. In some cases they may renegotiate with you to keep you from walking away but if you do walk away from the contract you will lose the fee the lender required when locking in to your rate.
Question: Can I lock in a mortgage rate even if my closing is extended out for several months?
Like everything in life, there is an associated cost with doing this. You are asking the lender to share the interest rate risk with you and if they agree to do so you can anticipate some kind of a fee. These extra fees when buying Las Vegas real estate are usually added in when you extend your loan rate past 30-45 days. It’s very important to negotiate this upfront with your lender and get this agreement in writing, so you know exactly where you stand if loan rates change downstream.
Question: Is it always good to refinance when mortgage rates for Las Vegas real estate are going down?
There is no real clear answer, as it depends on the actual cost of refinancing versus the savings. You need to find out if your lender will charge points or make you pay for a new appraisal and title insurance, although some lenders do offer a no cost loan. Be aware if you owe more than 80% in total of your home’s value you will have to pay for private mortgage insurance on a new loan for Las Vegas real estate.
Question: Why do most lenders resist renegotiating a new loan?
In most cases you lender is probably selling your loan to investors or other institutions. Freddie Mac and Fannie May in many cases “buy” these loans from your lender and then turn around and resell them as mortgage backed securities to investors. The problem lies with the investor’s expectations, they expect the lender to deliver a loan at a specific promised rate or else the revenue they anticipate generating will not occur and the financial transaction is not in their best interest. And, if the lender does not deliver a loan at a specified amount they must cover this cost on their end.
Question: If the rate on my existing adjustable loan is considerably lower than the existing rate for a 30 year fixed rate loan should I consider refinancing?
In most cases a fixed rate loan is a good choice for most Las Vegas real estate owners/consumers, especially when you factor in today’s low rates. It is advantageous to have your monthly payment rates stay at the same fixed rate for the life of your loan, as this enables you to budget accordingly and you are also protected from a rate increase. However, there may be viable reasons for you to keep an adjustable loan – if you plan on selling your home before your loan adjusts it makes very little sense to refinance to a higher fixed rate, especially when you factor in the costs of refinancing.
Question: What is the difference in today’s volatile economy in adjustable and fixed rate loans?
We are telling our clients that the difference between fixed rate and adjustable loans has diminished recently. Recent surveys indicated a 30 year fixed rate loan closed at an average of 6.02 per cent within the last few weeks. Recent adjustable rates that reset in five years on average and then every year moving forward was 5.94 per cent; as you can see, there is not a significant difference in the two.
Question: I have good to excellent credit and I can substantiate my income with documentation – why have I been turned down for a loan?
Today’s lenders are looking at a number of variables including your proof of income, good credit and the third variable which in many cases may be the most important, a good sized down payment. You need to meet the lender’s benchmarks for all of these variables to obtain a loan for Las Vegas real estate.
Question: I’ve made a large down payment when I bought my home and I am still unable to refinance – why?
The equity in your Las Vegas real estate may be gone through no fault of your own. Prices have dropped across the country and in the Las Vegas real estate market and your equity may have been wiped out even if you put down a substantial amount, like 20-30%.
Question: How do I ascertain how much equity I have in my home?
It’s a very basic formula – take the market value of your home and subtract what you owe on it. The most difficult part is ascertaining what the market value is for your Las Vegas real estate – in most cases a lender will order an appraisal for this reason and you will incur an upfront charge for this in most cases.
