Mortgage Matters

Wesley Knight 0:00
This is a KU NV studios original program. 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. Nova.

Roland Daniels 0:43
Good morning Las Vegas. Welcome to mortgage matters. I'm Roland Daniels, a certified mortgage advisor with Geneva financial. My NMLS number is 355859, our company, NMLS number is 42056, and I'm here this morning as always, with my fantastic co host, Heidi Griff Good morning.

Heidi Griffith 1:04
Heidi, well, good morning. Roland, Good morning. Happy Sunday.

Roland Daniels 1:08
Happy Sunday.

Heidi Griffith 1:09
I'm Heidi Griffith, also a mortgage advisor and your Director of Client Services. My NMLS number is 2247754, so we had our in person home as possible Down Payment Assistance class last Monday. Didn't we? We did? Wasn't that class amazing?

Roland Daniels 1:24
It was amazing with the Nevada housing division.

Heidi Griffith 1:26
It was with the Nevada housing division. We got to spend some time talking about how their programs work. We did what it looks like to get pre approved the real estate process. It was really, really good, valuable class. Lots of great questions. So let's do this today, right? Because we have been getting more and more questions about the Nevada housing division programs, about down payment assistance in general. I've had a lot of calls over the past couple of weeks from real estate professionals who weren't quite sure about the programs. Didn't really know how they worked, and again, heard some not great myths, right?

Roland Daniels 2:00
Some of them didn't even know that those programs actually existed.

Heidi Griffith 2:05
Well, yeah, we actually had a gal in the class who was a real estate professional. She came because she had a client who it might work for. And I had a conversation with her after class, and she was like, you know, there's nobody in my office that even knows that these programs exist. So I think it's valuable my thought process is it? Let's have the conversation. If you're listening in the conversation, you know what we're speaking on doesn't necessarily affect you. It probably could help someone you know, whether it's a family member, you know, a child, a grandchild, a neighbor,

Roland Daniels 2:36
agreed, because it's all about options and opportunities. Absolutely.

Heidi Griffith 2:39
So let's do this. Let's let's talk about what Nevada housing offers, why we teach the class, and why we're so focused on helping folks get into homes with the possibility of utilizing down payment assistance, right?

Roland Daniels 2:52
Because with down payment assistance, it gives them the opportunity to bridge that gap, to become a homeowner. Because just like we've said before, it takes an average person about seven years to save up for that down payment. Well, with the programs that are available, we have that covered,

Heidi Griffith 3:07
it takes seven years for the average person who's purchased a home to save up for their down payment. That's a long time. That is a long and with all of the unknowns, especially when it comes to value, right? With all of the unknowns in price, because we're quickly increasing in value. I bought my first house in 1996 and in 1996 I bought an almost 1500 square foot house for 102,000 now, yeah, I wish, right, but that's what I paid in 1996 right? The median value now is over 450 that's a big jump. It is a big jump. And you know, we just have not gone up. How are we not in pace with that? And so homeownership starts to become more and

Roland Daniels 3:51
more sometimes it gets more

Heidi Griffith 3:52
difficult and it's further away as we move forward. And so you and I have had this conversation many times. We sat down a few years ago and we talked about why we did what we did, and we talked about our core values. And, you know, not everyone wants to be a homeowner, that is true, and that's fine. It is, but a lot of us really do strive towards homeownership, and it does feel out of reach for a lot of people, for some people, we do, and I say that because you talked about bridging that gap, and down payment assistance can help bridge that gap. I agree 100% there's a lot of really not great myths around down payment assistance. The first one is that you have to be low income, right?

Roland Daniels 4:34
Not necessarily true when the maximum amount is $165,000 at least with the state. And that's what

Heidi Griffith 4:43
this that's what the Nevada housing division programs their their income limit is 165,000 again, I don't think that's low income. But we also have programs that go above that. We don't have an income limit, no income limit. So there are programs available. Some people think that you have to have. Perfect credit.

Roland Daniels 5:00
Well, I just had a talk to a person last night, and he asked me, Do I need a 720 FICO score to be eligible to receive down payment assistance?

Heidi Griffith 5:09
And that's not true, not even close to the case. So with the Nevada housing division, again, 640 is their minimum FICO score, and this is a conversation that comes up in just about every class we teach alongside them. And it is that you know a lot of people, if you check your credit on experian.com or Credit Karma, or your bank or your credit card company, and you're not at 640 that is not an automatic No. And you know, I've talked to people that attended class A year ago, right, and they just didn't think that they were ready, because Experian told them that their score was 632 Well, there's a lot of resources. First and foremost, that we offer, right? We work with nonprofits who are HUD certified counseling. So we work with nonprofits that offer HUD certified credit counseling. They do at no cost. The only thing that you would ever pay for if you went with a soft credit pool, if you don't already have your credit report, but you can go in, if you have your credit report, you can go in. They'll sit down with you and go through all of that. But you know so many people are waiting if their scores like 630 and the minimum is 640 with the Nevada housing division in Nevada Rural

Roland Daniels 6:17
Housing, right? But there are some tips that we can offer that can bring up their scores, probably within 60 to 90 days, sometimes sooner or sooner, sometimes sooner.

Heidi Griffith 6:25
So there's a lot of resources available, and I think the first step is just finding out, right? It's not making any commitments, not even to yourself, just finding out what's available and what that looks like and how you get there, right?

Roland Daniels 6:37
That is the first step is just to reach out and find out where you are, you have to let me go back. It starts with just one simple conversation. It does right whether you give us a call or one of the credit counselors a call when it comes to your credit we do recommend that you do check your credit report, at least on a quarterly basis, and you can go to annual credit report.com and you can get all three of your credit reports

Heidi Griffith 7:02
for free, for free. And you know, I check mine more frequently than you know, every quarter. It used to be that at annual credit report once a year, you could check each bureau so Experian, Equifax, TransUnion, you could check them once a year. But as breaches

Roland Daniels 7:18
have happened, they make it more acceptable or accessible, right? More accessible? Yes. So it's like, sometimes every week, or even every month that you can check your scores.

Heidi Griffith 7:29
Yeah, and I try and hop on at least once a month, because, you know, lots of stuff. If they do, they do. You know, my credit card companies do a great job of updating me. If there's anything that's out of the ordinary, pay attention to those updates, by the way, because I'm sure that the majority of us have been affected in one way or another with some kind of a breach and or some kind of fraud. We want to make sure that we're paying attention to that. But going back towards the credit, you can keep an eye on your credit, but you can also bring those credit reports into a HUD certified counselor, and you know, they'll sit down with you and review and go over it with you and walk through the best steps. And I'm not telling you you shouldn't try and fix your credit alone. I think that everyone has the means to do so,

Roland Daniels 8:10
but sometimes it can be you may be paying off some debts that you shouldn't

Heidi Griffith 8:15
be paying off, right, right? And, you know, medical is a great example that we use all the time. And don't forget charge offs medical and charge offs. But medical is a big one, because, you know, medical is expensive, it is very and in many instances, insurance, if you have it, doesn't cover everything. And so when you find yourself in a medical situation, right, and something gets reported, it doesn't feel great, but I'll tell you, we don't count medical collections in the mortgage industry. We don't, but it does affect your score. It will, if it's reported, yes, it will certainly affect your score. But if you're thinking about buying a home, that's probably not the first thing. No, we can

Roland Daniels 8:55
utilize those resources for something else, right, just paying down your current credit card debt, right? Because it's a

Heidi Griffith 9:00
big thing. It is because debt to income makes a huge difference in what you qualify for. And so then going back to the Nevada housing division, we look at debt to income right when we're qualifying anyone for a mortgage. But with the Nevada housing division, their minimum debt to income ratio is 45% is 45% and that's if you've got a 640, to a 679 right?

Roland Daniels 9:21
And they have 680, or higher, then we can go to 50% and what that

Heidi Griffith 9:24
basically means is, once we factor in your mortgage payment, and that's your payment, your interest, your taxes, your homeowner's insurance, and an HOA, if you have one, and many of us in the Valley have an HOA, it can't be 50% more than your take home, right?

Roland Daniels 9:40
And that's total debts, including credit cards or current payments or

Heidi Griffith 9:45
education loans. And I say that because one of the myths that we hear a lot is that these programs aren't great. We do hear that. I've heard it from professionals in the industry who will say, Oh, that's not a good deal for the consumer. Sure. And as you sit down and take a look, because there's a lot of different down payment programs out there, all different types, privately funded down payment assistance programs, there's state run down payment assistance programs, there's federally funded down I mean, there's a lot of stuff out there. So are there programs that don't set you up for success? Possibly, yes, there's a possibility. But when we take a look at programs like our state offers between Nevada Rural Housing and Nevada housing division. These programs are structured to actually set you up for success. So when we say the debt to income ratio, if your score is 680 or higher, is capped at 50% there's a reason for that, and the reason for that is because we don't want anyone to be house poor. We don't want you to be house poor. We want you to be able to go and live your life comfortably well. We tell

Roland Daniels 10:49
people all the time, we want you to be the most successful homeowner possible.

Heidi Griffith 10:53
And that's that's bigger than those words. I really believe that. I believe that that's bigger than those words, because, you know, we say it everywhere.

Roland Daniels 11:01
That's what we believe, that is our, one of our core values, absolutely.

Heidi Griffith 11:05
And with that, what that looks like is, if something happens in life, you have the means that you're not tied to your house, that you can't do anything else, and if you choose, at some point, moving forward, to sell the home that you purchase to, you know, purchase investment properties, whatever it looks like you're being set up to be able to do that, versus being tied to a house. Because there are some down payment assistance programs that they have second you know that there's a second mortgage, right? With a payment with an interest rate that's higher than the first it becomes very,

Roland Daniels 11:39
very expensive, because now you're paying a first mortgage and a second mortgage and along with your other current debt.

Heidi Griffith 11:45
So, so there's a lot of stuff out there, and the best thing to do is to educate yourself. Yeah, I agree. And that's why we do what we do with the classes, with the Nevada housing division, the homeless, possible classes. That's why we do the path to home ownership with PLC. Yeah. And we do that because we understand how valuable home ownership is, and even if you walk away and go, You know what, maybe this isn't for me now, right? That's cool. That's cool because all we're there to do is provide that information, right? So let's talk about Nevada housing, because we just have this great class. We'll have a class again next month. We will, and that online class, we try and rotate between in person and online, because everybody has different learning styles. Everybody has different timeframes that they can do stuff. You know, if you if you work a lot and you just want to jump on a zoom. So make those available lot easier. Absolutely, the only great thing. Well, not the only great thing, but one of the great perks about being in person is you get lunch.

Roland Daniels 12:39
You get lunch, plus you get to meet other people, yeah, and you get to sit in a room together, ask questions, learn from each other, right? We Yeah, we really did have hear other people's stories. You may not want to ask about your own situation, but when you hear other people ask those questions and get answers, then I think a lot of times they can relate to it and understand and have a better feeling about themselves. It's true.

Heidi Griffith 13:02
It's true. I mean, people ask questions on the zooms, but when you're in person, you start to get to know people a little bit better. And then we spend a lot of times, you know, after class, talking to people, answering questions. It really is a nice time. So let's talk today about what is available to people. And we'll start with the Nevada housing division. I think that that's probably all that we have time with, because they do have such great programs. They do. And I want to start with the first time homebuyer program, because this is one of those that people get a little confused about the minute somebody hears first time homebuyer. Maybe you owned a home 10 years ago in life, life, right? Right? They're like, can't do that. Untrue. Right? Untrue. What? What qualifies you as a first time home buyer with both Nevada housing and Nevada Rural Housing,

Roland Daniels 13:45
as long as you haven't owned a property or been on title within the last three years, so 36 months.

Heidi Griffith 13:51
So they look at it differently than if you look at it. Did you ever own a home?

Roland Daniels 13:54
Yes, because if I owned a home five years ago and I sold it, and then I'm still eligible now as a first time home buyer again. So you can

Heidi Griffith 14:01
be a first time homebuyer. They have first time homebuyer program. We've used it a lot. We have it offers either a two or 4% down payment option. So the way Nevada housing divisions down payment programs work, so this makes, makes it make a little bit more sense. You qualify for that program. If you're a first time home buyer, you meet their income maximum you can't go over their maximum limits, and you qualify, right? You've got a 640 FICO again. Don't let that stop you if you're not at 640 right now, we work with a lot of people for years, helping them to improve their scores, to get them where they need to be. We have a lot of great success stories we do, and so don't let stuff stop you. You've got to open the door. You've got to start somewhere. And this could be where education, right? It also starts with education, absolutely. So Dave, so if you qualify for that first time homebuyer, they offer you two or 4% in down payment assistance. How that works? If you're getting a conventional. Down. The minimum down, depending on your circumstances, is 3% sometimes it's 5% correct. With FHA, your minimum down is three and a half percent. Va, is there a minimum down? No minimum. There's no down, right? There's no down.

Roland Daniels 15:12
So you can use the assistance for your clothes.

Heidi Griffith 15:14
Let's come back to that, because that's that's the good stuff. But so with the three and a half percent down, we'll just go with an FHA, three and a half percent down, and maybe you qualify for both, depending on what your personal makeup is. Do you qualify for a conventional loan and an FHA loan?

Roland Daniels 15:29
And when we do sit down with you, we look at both, and we look at options, which way works best for you, right?

Heidi Griffith 15:34
And we don't make that determining factor. Do we? We do not know you as the client. Get to make that factor. You know? I've heard lenders say this is what you qualify for, and maybe there's five or six different things other than that that you qualify. We just heard that last week, actually. That's why I brought it up. We did. We did. And so with that being said, we like to present options. Now, not everybody has all of the options, true, but whatever your options might be, we sit down and look at so you're going to do an FHA. It's three and a half percent down with the Nevada housing division, first time homebuyer program. You can get 2% or 4% from Nevada housing. How does that work? So we'll go with the 4% option. For this example, you have a three and a half percent down payment. Nevada housing offers you 4%

Roland Daniels 16:16
so I have half a percent left

Heidi Griffith 16:18
that you can apply towards your closing cost,

Roland Daniels 16:20
sounds good. Or I can apply it all towards the down payment.

Heidi Griffith 16:23
Or you can apply it all towards the down payment, reducing the cost up front, the cost up front, yes, and reducing your monthly payment just by a little bit. Yep, okay, not a whole lot, but yes, it would reduce it by some. Or you can apply it towards part of your closing cost. It's going to be based again, what is your specific scenario? But here's the big questions that people want to know about two to know about, do I have to repay it? And that's kind of like the elephant in the room. Do I have to repay it? Well, the answer is yes, with the Nevada housing division, and I'm going to put some asterisks in as we talk through it, but with the Nevada Yes, you do. You don't have to repay it until you either refinance or you or you sell your property. But there isn't a payment and there is no interest, no interest. So again, just using even numbers, or just creating a scenario here, you get 4% you use three and a half percent for your down. You're going to go, FHA, take that other half a percent. You apply it towards your your closing costs. Maybe you get some seller credits. Maybe your your real estate professional negotiates a awesome deal for you. Get some seller credits, right? There is no payment on the money that Nevada housing division has given you to use towards these things. There's no interest. So let's just say you get 15,000 from Nevada housing, and I'm just making up a number when you decide to refinance andor sell, depending on what you do first. Or maybe you stay in your house for 30 years and never do anything, which probably won't happen, but maybe you do when your house is getting ready to get paid off or sold or refinanced. You pay Nevada housing that money back, right? So the money that they gave you no interest, gets paid back. And I love that, because this continues to recirculate through their coffers. This continues to be able to allow others the same opportunity as it might allow you, and it allows

Roland Daniels 18:01
you to keep that $15,000 in your pocket, if you have it, let it sit there and earn interest or invest it in something else.

Heidi Griffith 18:09
And that's certainly something that we talk to folks about. You know, maybe you do have 10 or $15,000 saved. Do I use all of the money I have and then I go into my house, house poor, because now I have no cash, right? Or do I utilize something like this? And that's a big question that gets asked in class. I'm glad that you brought that up. A lot of people ask, well, if I have money, or they don't want to necessarily tell us how much they have. If you have hundreds of 1000s of dollars in the bank, that's a different story. But if you've got, you know, we've had folks who had $50,000 in the bank and they chose

Roland Daniels 18:39
to use still Nevada housing divisions, money

Heidi Griffith 18:41
and it's, it's not free money, but it but without interest or payment, right? Somebody's just telling you, Hey, hang on to this $15,000 until you're ready to pay me back. See if you, if you told me you want to, do you want to give me 15 grand rolling No. Well, if you did, and you told me I could pay it back whenever you wanted me to, I would probably think about it. I probably like, well, that's not too bad. And I love that Josie had him. She's actually the program specialist with Nevada housing division. She always says it's so cute. She's like, you know, if you could borrow money from a friend or a family member for your your closing cost and your down payment, right? But the second, you know, you show up at their house with with new shoes and a new bag, or you go on a trip, everybody's looking for their money. Nevada housing isn't going to hound you for that money. And I love that analogy. I do too, but I also don't think having to pay it back is this horrible thing.

Roland Daniels 19:34
No, it's not, and it allows you the opportunity to keep it as maybe we recommend having an emergency fund or emergency savings account, so you have that money for when life happens, absolutely

Heidi Griffith 19:47
and life does, life right and the time. Here's something that we tell all new homeowners when you purchase a home, number one, you can't call, you know, the superintendent of the community that you live in and be like, Hey, I my toilets. Broken or fix it. I need a new garbage disposal. You're responsible now, maybe you get a home warranty. Maybe they fix some stuff, but you're still ultimately responsible for everything that happens under your roof. And home ownership does require home maintenance. It does, you know, we we sit and I remember, I remember buying my first house. I had it completely decorated in my brain before closing day, and once I moved in, and then, like I said, this is 1996 things didn't cost as much as they cost today. But once I moved in and I went shopping for all that beautiful stuff I had planned out in my head, my house ended up looking a little bit different, because then I understood what reality was.

Roland Daniels 20:38
Well, all of the costs started to add up, right?

Heidi Griffith 20:41
Certainly very quickly, actually, because you wouldn't believe what a faucet costs. Stuff is expensive. So if you do have money set aside, maybe you do want to change the countertops. Maybe the you know, maybe you want to get rid of the carpet and put hard surface down, whatever that is in your life. Yeah, maybe you do want to sock away some money, and this might work. But more than that is that rainy day fund. It's that setting you up to be a successful homeowner, so that when something happens, and I'll tell

Roland Daniels 21:10
you that just in case money,

Heidi Griffith 21:11
it's not even it will happen. It will it's just a matter of, when Will something happen, and what will that something be when you own a home, owning a home comes with a lot of responsibility. And I feel like, you know, most of us have the means to do that. We have the gumption we do to get out there and do the stuff that we need to. We want to make sure that when we put people into homes, that they understand that too. And that's why, aside from how fantastic the Nevada housing division programs are, the class that we teach with CPLC, the path to home ownership, that's a HUD certified class. It's a long day. It starts at 830 in the morning. It goes until three. Sometimes they get you out a little bit early, depending on what kind of breaks you take throughout the day. But it is an A to Z, course it is on homeowner foundation. So that was my little side note on that, because there is some great education on what it looks like to be a homeowner.

Roland Daniels 22:04
Well, it goes in a little bit more in depth. Even though we go over credit, we go over budgeting, we go over every aspect of becoming a homeowner. And yes, absolutely.

Heidi Griffith 22:14
And you know, if you looked up how to become a homeowner or, you know, first time homebuyer online, a lot of that stuff would be there, but the stuff that's usually not there is what happens after you get the keys, right? What happens when you go to turn on the air, because it's going to be, you know, triple digits, 100 and looking

Roland Daniels 22:33
in a couple of when you go to turn on

Heidi Griffith 22:35
the air and the air isn't working properly, right? You know, what does a home warranty look like? What does homeowner maintenance look like? All of that kind of stuff, is the importance of, how do you shop for homeowners insurance? Right? That's the important stuff. It is that most you know how to classes and how to videos don't talk about they don't talk about the after I got my keys. Now I'm a homeowner. What do I do now? Because I promise you, you call the seller, or you call your real estate agent and say, Hey, this doesn't work after you move into your house. And you know, hopefully you have a great real estate professional that you're working with that kind of walks you through and guides you to the best resource for that, but they're gonna be like, you're the homeowner, right, right? So that's all side notes, but I think it's valuable information.

Roland Daniels 23:19
It is very valuable.

Heidi Griffith 23:20
Circling back to the Nevada housing division, first time homebuyer program, so they offer the two and the 4% right? You do have to repay it. You have to have a 640 minimum FICO score, but we can help you get there. We sure can. And they do have other programs. We don't have enough time in a show to go over them all. We have,

Roland Daniels 23:36
probably, right now, about 20 different programs that can help. But Nevada

Heidi Griffith 23:40
housing division has the workers Advantage program. They're they're probably in the 400 and change available loans left on that.

Roland Daniels 23:48
So that's been just, just a quick moment on the workers advantage. What do you get?

Heidi Griffith 23:53
So the legislature kind of allocated money for quote, unquote, affordable housing, right? And Nevada housing division got a chunk of that money, and the legislature determined how they were going to allocate that through Nevada housing. And the way that they took a look at it was, what happens if something happens in Nevada and we lose medical professionals?

Roland Daniels 24:16
So four main areas,

Heidi Griffith 24:17
education, yes. Public Safety, yes. And construction,

Roland Daniels 24:21
construction and trade industry. Now,

Heidi Griffith 24:22
if you're not in those industries, I believe that your essential is, but I agree, but this is this for the guidelines that were given from the legislature. And so what you get, if you fall in those buckets, is $20,000 in down payment assistance. Right? They are offering the ability to buy down your interest rate using those funds. So I have

Roland Daniels 24:44
an option. I have an option to choose the entire $20,000 for my down payment that is correct, or I can buy down the rate at 2% or 4% of the loan amount that is correct, and then use the difference towards my down payment right closing costs.

Heidi Griffith 24:58
So whatever's remaining. After that buy down. For example, I'm working with a gal right now. She's looking about the 380 mark, okay, 380,000 $380,000 mark. So 4% of whatever that loan amount is is what she's going to be using to buy down the interest rate, and it gets your interest rate down substantially. You know, Nevada housing division publishes their rates, and those are the rates that all lenders will use that utilize the program. They publish their rates daily Monday through Friday, as long as it's not a holiday. And so she's going to use the 4% to buy down her interest rate, whatever's remaining out of that she's going to be able to apply towards her closing cost, right? If you have any questions about any of the programs we offer, if you know someone who thinks might benefit from any of these programs, please feel free to reach out. You can call or text us. We're at 702-210-2057 that number again, is 702-210-2057 so before we get out of here today, I want to take a moment, as I always do, to talk about fair housing, because while we spend a lot of time talking about programs and opportunities, access to housing isn't always equal for everyone, fair housing protections exist to make sure that people are not denied housing based on who they are. That includes race, color, national origin, religion, sex, disability or familial status. And while those protections are in place, the work to make sure they're understood and protected is ongoing. That's where Silver State Fair Housing Council comes in. They're the nonprofit right here in Nevada that focuses on education, outreach and advocacy, helping people understand their rights and helping ensure those rights are protected. And this is especially important as we head into April, which is Fair Housing Month. Although I believe every month is Fair Housing Month, it's the time that we bring more awareness to these protections and the roles they play in creating access and opportunity to housing. Silver State Fair Housing Council will be hosting a fair housing community resource fair on Saturday, April 11, from 10am to 1pm that's going to be at the East Las Vegas community center. And I think it's a really good opportunity to connect with local organizations, learn more about what your rights are, and access resources that can help support you or someone you might know. Because Fair Housing isn't just about policy. It is 100% about people. It's about making sure everyone has a fair chance of finding a place to call home. If you'd like more information about the Fair Housing Community Resource Fair, or anything that we've talked about today. Please feel free. We're at 702-210-2057.

Roland Daniels 27:28
As we close out today's show, I just want to leave you with this thought, yes, a lot of people believe that home ownership is out of reach, but what we continue to see, whether it's in our classes or in our day to day work is that many times the biggest barrier isn't ability, it's information. So once people understand how programs work, what their options are and what steps that they can take, things start to look very different. They do. There are real programs out there that can help bridge the gap and sometimes just having the right information at the right time can completely change someone's path. And just as important as access to information is access to opportunity. Fair Housing plays a critical role in making sure that opportunity exists for everyone. We'll be back next Sunday morning at 7:30am right here on KU NV, 91.5, until then, believe in what's possible, even if you've been told that it's out of reach. And remember, stay true to yourself and your mind. Bye, bye. You.

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