Mortgage Matters

Wesley Knight 0:00
This is a KU NB 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 to

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 as always, I'm here with my fantastic co host, Heidi Griffith, good morning. Heidi, well, good morning. Roland, how are you? I am doing fantastic. Yes, you are happy. Sunday. Happy Sunday. Glad to be here with you today. Yes,

Heidi Griffith 1:16
I'm Heidi Griffith. I'm also a mortgage advisor and your Director of Client Services. My NMLS number is 2247754, so when we were driving over to the station today, I was really thinking about how the markets changed over the past year, right, right? It has. It's kind of crazy because, you know, about a year ago we were talking about the market being, quote, unquote, balance where it was kind of in favor of sellers and buyers, right? Homes were sitting just long enough for buyers to have breathing room, but not so long that sellers were starting to get nervous,

Roland Daniels 1:51
right? And now you can really feel it shifting into a buyer's market. You can't, yeah, yeah, sellers are coming to the table differently, pricing their homes a little bit sharper, and we're seeing more sellers offering concessions and even helping cover some of those closing costs, and in addition reducing the sales

Heidi Griffith 2:13
price, yeah, and we've been, you know, for the past year, since we've been on air here at KU NV, we've been talking about solar concessions. We've been talking about all of the stuff, but we are actually visibly seeing a shift in Las Vegas, we are every day, and it's not just a headline, it's not just something that we see in our social media feeds, right? I really believe that we're starting to see that it's actually changing how people are buying homes. It is because we're seeing more buyers get more help than they did a year ago. Even if we were seeing seller concessions, we're definitely seeing more now we are and you know, in some cases, they're walking into their new home with less money out of their pockets because of that, right

Roland Daniels 2:53
which is exactly why we wanted to have today's conversation. We're going to break down what this shift in the market could mean for you what those seller concessions really look like, and how you can combine them with different programs like Nevada housing or Nevada rule to make homeownership a lot more

Heidi Griffith 3:13
reachable. Yeah, and we've got some real stories that we're going to share if we have time right what worked, what didn't, what buyers should be asking for right

Roland Daniels 3:20
now. So before we talk about what's happening with the market shift, let's talk about our upcoming home is possible online class with the Nevada housing division. I'm excited.

Heidi Griffith 3:32
We didn't have a class in July just because our schedule was so passed. We did. It's gonna be on Monday, August 11. It's only from 330 to 5pm and this is online. It is. It's going to be hosted alongside the Nevada housing division, and we will learn all about the home as possible down payment programs that they offer, right, right? The great thing about these online classes is regardless of time restraints. You know, our path to homeownership workshop that we do at the beginning of every month, the first Saturday of every month, it's a big commitment. It's it's an amazing workshop, but it is a big commitment because you've got to be there all day Saturday. Yes, this works great, especially if you work on the weekends, which a lot of people that live here in the valley do, right, right? And it gives you another opportunity, yeah, to jump on. Learn about programs that are available. Learn how you can get up to 5% in down payment. Help how a portion of that can help cover closing costs. And like we were talking about with market shift, that could actually also be coupled with some seller concessions, right? And make the dream just a little bit more achievable, especially since 68% of people say the reason why they haven't purchased a home

Roland Daniels 4:51
is because not having enough money for the down payment. Saving for that down payment, it's the largest barrier. Care to home ownership, and we have you covered for that. So when you just need an hour of your time from the comfort of your

Heidi Griffith 5:06
home, yep, and then we'll take another we'll take a half hour at the end of the class, because there's always questions that people have. Josie with Nevada housing, she covers all of the programs. We've got programs for first time homebuyers, right?

Roland Daniels 5:18
Yep, if you haven't owned a home or been on title within the last three years,

Heidi Griffith 5:23
home buyer? Yep, and that program offers either a two or 4% down payment assistance. Yes. Then they also have programs that, number one will allow for up to $165,000 in income, in income. We hear it all the time. People think that when we're talking about down payment programs, that you've got to be low income, that you've got to make under a certain dollar amount, not true, make up to 165 grand a year. And qualify for these programs, you can own a home in a different state, with the home as possible program. You can literally own it, you know, if you're moving from out of state, or maybe you just have a property, a rental income property in another state, you can have that still utilized. We find the home is possible. Let's talk about that for a second.

Roland Daniels 6:09
Well, for the veterans, they're waiving all of the fees when it comes to the Nevada housing division, which can save you probably just close to about 1000 bucks,

Heidi Griffith 6:18
absolutely. And you know when we talk about VA loans coupled with down payment assistance, because there's no down payment, no down payment, there's no down payment with a VA loan. But what about some help for closing costs? Yep, so we got you covered there. You can utilize that. There's no additional fees or costs to do that. It's free to attend. So if you'd like to attend or want some more information, you're more than welcome to give us a call or text us. Our telephone number is 702-210-2057, again, that number is 702-210-2057, you can also find the link to register on our Facebook page at mortgage matters radio. It's an afternoon, and it could completely change the way you think about what might be possible for you and your family.

Roland Daniels 7:05
All right, now let's get into what this new buyers market actually looks like. Let's do it, and how all of these changes are creating more opportunities than we've seen in a very long time. Heidi, I agree. So let's talk about what we're really seeing right now, because the market looks and feels different than it did even just six months ago.

Heidi Griffith 7:30
It does, does? It? Does it really does. You know, we've watched it shift we talked about earlier. You know, balance market versus clearly a buyer's market is what we're seeing right now. Homes are sitting longer. Days on market are longer. Sellers are adjusting pricing, you know, maybe they're doing some price reductions along the way, right, and they are offering things that we just weren't seeing before, like credits and concessions. Yeah, exactly, exactly. So seller concessions, those that you know that's going to be a credit to you that can go towards your closing cost. It can go towards prepaid items, even helping buy down an interest rate, right? You can, and they're really becoming a normal part of the conversation. You know, we've been talking about it for a long time, especially if you are, you know, in one of those positions where you want to buy a house, but you just don't have the money to close. It's been a technique we've been using, but I'm seeing more and more contracts written with those being approved, right?

Roland Daniels 8:31
It's definitely one of the better strategies out there, yeah. But before we continue, could you please break it down? What is a seller concession? Well,

Heidi Griffith 8:40
that's a great question. Roland, so a seller concession, a seller credit, they're kind of used interchangeably, right? A lot of buyers will go in and ask for a reduced sales price, right? We understand that if the house is offered at 400,000 and you go in and offer 390 that's a reduction in sales price that's negotiating. You can also ask for a seller credit, so it could be $1 amount or a percentage that the seller credits you upon a successful closing. In many instances, like with FHA, we can go up to a 6% seller concession, so they could give you at closing a 6% credit that you could then use that money to apply towards closing costs and prepaids and those kinds of things that I was talking about,

Roland Daniels 9:28
right? And it can make a huge difference, right? Yeah, absolutely, to say a five or $6,000 reduction in sales price, that may not help a lot on the on the actual mortgage payment, but a 6% towards the closing cost makes a huge difference in out of your out of pocket expenses, 100%

Heidi Griffith 9:49
because what usually like, you know, what would $5,000 in a reduction of sales price? I mean, what's that going to be? Maybe five six bucks a month. Yeah, we're talking dollars. Yeah. A month, and we're not telling you don't get the best deal, because absolutely we want you to get the absolute best deal. And you know, with this shift that we're seeing, it might not be a bad idea. You know, you might find yourself in a position where you're able to get a lower sales price and some credits or concessions from the seller, but you're absolutely right. Those those concessions, that's hard money at closing. So if let's just say you got $5,000 from the seller, that's $5,000 you're keeping in your

Roland Daniels 10:32
pocket, because every dollar that the seller contributes is one less dollar that you have to bring in cash or to the

Heidi Griffith 10:39
table. That's it. That's it. So I talked about the FHA Max concession being 6% right, right? Each loan program actually has a cap on the amount you can receive from the seller, don't they,

Roland Daniels 10:50
right? So just like Heidi was saying, when it comes to FHA, it is 6% of the purchase price, along with USDA loans as well, right? When you're looking at VA loans, they are they even have some more flexibility. You can basically have all of your closing costs and fees covered by the seller up to two discount points, and can include debt payoff and prepaid items up to 4% so I know it's kind of confusing, but that's the way it is with BA loans, then we have conventional loans for owner occupied homes. Sellers can contribute up to 3% if you're putting less than 10% down, 6% if you're putting anywhere between 10 and 25% down, and then if you're putting more than 25% down, you can actually get up to 9%

Heidi Griffith 11:46
and that's for owner occupied. So that's not for investments. And with that, the great thing about that is, if you thought, you know, I want to do a conventional loan, I do have, you know, some money saved. I want to put as much as I can down reduce that payment, right, right? It might be a great idea to get seller concessions, because you're going to be able to put a

Roland Daniels 12:04
little bit more down, right? And we always ask for seller concessions. We do. We ask our

Heidi Griffith 12:08
real estate professionals that we work with. You know, why not ask, especially as we see this shift in the market,

Roland Daniels 12:15
right? If you don't ask, you won't get them anyway, right? The answer is always going to be no, no. So you might as well ask, I agree. I agree. So what about investment properties? Investment properties are capped at 2% for conventional loans, but outside of conventional loans, some of the more. How should I say creative financing loans, sometimes we can get three or 4% even on investment properties as well,

Heidi Griffith 12:39
right? So with FHA, you can get the most with the with the smallest down payment, you can get up to 6% right? With a minimum of three and a half percent down. So I know that we've got a story that goes along with that, a client success story. So let's talk really quickly about and you'll know who I'm talking about, right? She was able to purchase a home using FHA, right? She did three and a half percent down the house was about $500,000

Roland Daniels 13:06
and we utilized Nevada housing's home as possible program,

Heidi Griffith 13:10
right? So she got, she got 5% she did the 5% she did 5% so the way that works is, with FHA, your minimum down payment is three and a half percent, yes, because she got 5% from the home as possible program, which was around 25,000 right, she was able to use three and a half percent of that for her entire down payment. So she didn't pay the down payment. Then that additional one and a half percent went towards closing cost, right? Right? Then the seller, the realtor, negotiated with the seller and get, get this, she got all 6% that doesn't always happen, you know, it's real estate is kind of a negotiation, and a lot of times you're going to go back and forth and hopefully come to a meeting of the minds, you know, something that both parties are, you know, agreeable to and is favorable to both. In this instance, they were able to get the full 6%

Roland Daniels 14:04
so imagine that, yeah, 5% for the down payment and closing costs, and another 6% from seller concession. And what was her EMD, or earnest money deposit?

Heidi Griffith 14:17
I believe it was $5,000 $1,000 so she did an earnest money deposit really quickly. Let me just pause right there and talk about what an earnest money deposit is. So in real estate, when you put an offer in on a property, right, and your offer is accepted, there's typically a deposit that goes along with it. It's called the earnest money deposit, or, you know, in the industry, we call it an EMD, right? What that is, is it's kind of a good faith deposit. It's you telling the seller, hey, I really like your home, and I'm going to give you this dollar amount to take it off the market. Now you're not actually giving it to the seller. You're not giving it to. Realtors, you're not giving it to any lenders. What's happening is, in Nevada, that money is going to the title company, right? Title and Escrow, it's held in an escrow account. Title and Escrow are third party uninterested. They're just following the rules of the of

Roland Daniels 15:17
the contract, right, and it's still their money, right? 100%

Heidi Griffith 15:19
that that money goes into escrow, and as long as all the contractual obligations have been that money is in many instances, in most instances, it's credited back to you at Close of Escrow, unless anything in the contract changes and is signed by both parties, the buyer and the seller, if you fall out of contractual agreement, right? Because there's many stipulations in a purchase agreement you stand to lose that. That's why you really want to pay attention to what's in your contract. There are due diligence periods that have to be met. And as long as, for example, you know, I'll go with what we have we've got, there's a loan contingency, right in your purchase agreement. As long as you meet that loan contingency, that money is credited if, for some reason, you end up not qualifying for the property. And I'm going to use one that we have a story for too, you lose your job, unfortunately, right? Because sometimes life does happen. It does unexpectedly. So there's a loan contingency date, and that date is going to vary from purchase agreement to purchase agreement. You know, it's usually in the 20 to 25 day mark in most contracts, as long as that happens prior to that loan contingency date passing your earnest money is still refundable, right? So we had a situation. We had a gentleman who was purchasing a home. He lost his job in the middle of the transaction. Unfortunately, he didn't let us know we were not notified. He felt that he was going to be able to still purchase the home. He was retiring, and he thought he didn't need a job. Well, just an FYI. Your lender is going to check at the end to make sure that you're still employed. They will. And we went back and forth trying to get a hold of the employer. For several days, he gave us some bad information, unfortunately, and come to find out, he was no longer employed with that company. He was no longer employed with that company. I've happened it does, it does. And had he have told us when that occurred, right? We were still inside that loan contingency period. He would have got his earnest money back, right, but because he didn't, because he withheld that information, he ended up losing his earnest money deposit, right? So we want to make sure that you as a buyer are protected. So you want to make sure that you're really paying attention to those dates, because there are dates like a due diligence so inspection, contingency period, right then there's an appraisal contingency period. So if the home doesn't appraise for what was agreed upon in the offer, and seller doesn't want to come down in price, or you don't want to come out of pocket with additional you're not gonna lose your earnest money, as long as it's within that timeframe. So you want to know when that contingency is up, so that you are protecting yourself.

Roland Daniels 18:31
So you need to pay attention absolutely so if you're coming up with all of the money, which is your down payment and closing costs, and that's what's been stopping you from purchasing a home. Now might be a great time to start having that conversation again. Programs like the Nevada housing Nevada rule, along with seller concessions make it so you won't have to spend every dollar that you've saved just to get to the closing table. Yeah,

Heidi Griffith 19:01
and you know that's, that's the part that I love about this shift. It's not just numbers on paper, right, right? It's about real people getting into homes with less stress, less financial strain, and certainly more breathing room, right?

Roland Daniels 19:12
If you have any questions or have a topic that you would like us to cover, feel free to reach out. You can always call us or text us. That number is 702-210-2057 that's 702-210-2057

Roland Daniels 19:31
So Heidi, along with the down payment programs and seller credits, let's also talk about something most people have never even heard of another way to keep more money in your pocket, which is the mortgage credit certificate, or better known as the MCC it's

Heidi Griffith 19:51
a program that's through Nevada Rural Housing. It's going to give buyers a tax break, and not just once, but this tax break. Actually goes on every single year as long as you live in the home,

Roland Daniels 20:03
right? It does, and here's how it works. Tell me the MCC or the mortgage credit certificate gives you a federal income tax credit equal to about 20% of the mortgage interest that you pay each year. For an example, let's say you got a loan for $345,000 with a seven and a half percent interest rate. That could mean that you're saving about $5,100, in tax savings just in the first year. And that's real money, right? Real money. And it doesn't just stop there. This tax credit, keeps applying every year for the life of the loan, plus when you're getting approved for your loan, we can take estimated tax savings and count them as extra qualifying income. Let's say you're on the borderline.

Heidi Griffith 20:56
So that's going to be extra income that can be the difference between somebody qualifying for the house or having to settle for just a little bit less. That is correct. So this was designed for first time home buyers, right? Yep. And if you're a veteran, I believe that you're actually exempt from the first time requirement you

Roland Daniels 21:13
are and remember, first time home buyer doesn't mean that you've never owned a home before. It means that you haven't owned a home or been on title or deed in the last three years, right? And there are some rules that you have to meet income and purchase price limits, and it can only be issued at the time that you buy the home, so you can't add it on later, right? We've seen buyers get the MCC and not only save 1000s over time, but also lower their debt to income ratio enough to finally get approved for the home they really wanted.

Heidi Griffith 21:52
Man, that's the kind of stuff that we like to talk about, that we'll walk through with you, right? Because if you're buying in an eligible area, Nevada, rural housing has eligibility areas right some right here in the Valley. It's not just rural. It's not just horse properties. It's not just Pahrump or up north, we actually have pockets right here in the city. So if you're buying in one of those eligible areas where you think you might be, I really believe it's absolutely worth asking about the mortgage credit certificate, I agree 100% you know most people don't know it exists, but once you can see what it can do for your budget, it's a game changer.

Roland Daniels 22:28
So before we wrap up today's show, we always like to take a few minutes to talk about something that matters to us on a deeper level, which is fair housing.

Heidi Griffith 22:39
That's right. That's right. Both Roland and I serve on the board of the Silver State Fair Housing Council, and we see every week why this work matters so much. Fair

Roland Daniels 22:49
Housing means more than just that you can't discriminate. It's the foundation of equal opportunity in housing. Whether you're buying, renting or even applying, you have the right to be treated fairly.

Heidi Griffith 23:04
Everyone does, they do. And here's the truth, most discrimination isn't blatant, right? It's subtle. It's a different tone in a phone call. It's a door that doesn't open for someone who's in a wheelchair, right? Sorry, this unit isn't available when maybe it actually is.

Roland Daniels 23:18
That's where testers come in. Testers are everyday people, diverse in age, background and experience, who volunteer to pose as renters or buyers. They document how they've been treated. Help uncover those patterns that might otherwise go

Heidi Griffith 23:36
unseen. Yeah, and you are compensated. There's a small stipend for your time. Most tests only take about an hour or two. And it really, it really does make a difference. It does. You know, you're helping make housing more fair right here in our state,

Roland Daniels 23:50
I agree, fair housing complaints in Nevada often involve disability, and I'm pretty sure I think it's number one. It is. It is things like reasonable accommodations for service animals or accessibility modifications. Silver State Fair Housing Council steps in to help guide people through these situations.

Heidi Griffith 24:12
They also work with landlords, property managers and even real estate professionals to make sure Fair Housing isn't just enforced, right? It's that we understand it, right, right? They actually do continuing education for real estate professionals. They're also a resource for anyone who feels like they've been mistreated or discriminated against. If something doesn't feel right, maybe you were turned away, treated differently, or told no when you suspected the answer should have been Yes. Silver State Fair Housing Council can help you understand your rights and walk you through what your next step might look like. They can explain whether what happened might be a fair housing violation, guide you through filing a complaint, if needed, and make sure you're not left feeling that you have to handle all of this alone

Roland Daniels 24:56
and right now with the federal funding cuts to programs. Support Fair Housing non profits like the Silver State Fair Housing Council need people. We need volunteers. We need testers and advocates more than ever

Heidi Griffith 25:12
100% so if this is something you'd like to be part of and help make sure housing is fair for every one, because we all fall under the Fair Housing blanket, right? We do the Silver State Fair Housing Council. You can call them. They're at 702-749-3288, you can learn more about what they do or contact them online. Also, that's at WWW dot s, s, f, h, c.org,

Roland Daniels 25:42
fair housing is an option. It's not, it's the law and it's worth fighting for.

Heidi Griffith 25:48
I agree. So today's show really highlighted that we're seeing shifts in the market right now, right? Yes, there's more room for negotiation, more help on the table for buyers, and more ways to get into a home without emptying every savings account you have.

Roland Daniels 26:02
And we've talked about seller concessions, about programs like Nevada housing, about the mortgage credit certificate, and about how all of these pieces can work together to make homeownership possible for people who didn't think it could actually happen?

Heidi Griffith 26:21
Yeah, and here's what I'd like for everyone to take away, right? The shift we're seeing. It's not just numbers, it's opportunity. And if you've been sitting back, unsure, even scared, you know where to start. This might be your moment to just ask the question, what would it take for me? Because the answer might surprise you. If you have any questions about anything we talked about today, or you'd like to register for our Monday, August 11, online home as possible, down payment program class you can call or text us. We're at 702-210-2057 again, that number is 702-210-2057 you can also find the link to register on our Facebook page, mortgage matters. Radio,

Roland Daniels 27:01
fair housing, down payment, support, seller, concessions. It all connects, because housing isn't just about keys and contracts. It's about dignity, access and building something solid for the future, and that's the reason we do what we do, right? So we'll be back next Sunday, 7:30am right here on K, U, N, V, 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. You.

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