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 I'm here this morning, as always, with my fantastic co host, Heidi Griffith, good morning.

Heidi Griffith 1:05
Heidi, Well, hello there. How are you? I'm good. How are you this Sunday, fantastic. You are always fantastic. I try. That makes me happy.

Roland Daniels 1:14
Week after week, day after day.

Heidi Griffith 1:16
Absolutely. Good morning everyone. I'm Heidi Griffith. I'm also a mortgage advisor, and I'm your Director of Client Services. My animal s number is 2247754, so obviously, we're going to talk about rates today, right? We're going to talk about the Fed rates we are, yes, we are. Before we get into that, let's, let's talk about E really is an awesome opportunity to learn about some really great down payment assistance programs that are available to us right here in the state of Nevada. So tomorrow, tomorrow, tomorrow, Monday, September 22 we're actually going to be online with Josie from the Nevada housing division, and we're going to be going over all of the home as possible down payment programs and other tools that make home homeownership possible right here in Nevada, they've got several down payment programs. I've been hearing a lot of not great information about down payment programs as of late. We have, unfortunately, you know, I think a lot of people try and put everything into one bucket, and that's not the case. There are so many different assistance programs available, and yeah, some of them aren't always the best choice. Some of them might not be the best program for a lot of people. However, when we take a look at making folks successful homeowners, right and since saving for the down payment is the number one barrier homeownership, even with a minimum of three or three and a half percent down, right? Because sometimes it's tough to save up 1012, $15,000 for your down payment and then cover your economy closing costs, right? Because, yeah, you're right. Bills have gone up, right? So these types of programs, they don't have second payments. The rates aren't ridiculous. Some programs out there, they have high rates. They have second payments. These don't these really do set Nevadans up to be successful homeowners. So we're going to have this class. It's online, so it's super easy to join. You can join from your phone, from your laptop, from your PC, you know, whatever that looks like. It's only an hour. It's an hour and a half with questions and answers, because we usually take the last 30 minutes to to answer any questions anyone on the on the Zoom might have. So if you're interested, that's going to be 330 that's tomorrow, Monday, September 22 330 to about five o'clock. If you'd like to register, you're more than welcome to reach out to us. Our how do they register? They'll reach out to us. They'll call or text us,

Roland Daniels 3:45
and that number is 702-210-2057 once again, that's 702-210-2057

Heidi Griffith 3:55
you're being silly this morning. You can also head over to our Facebook page, mortgage matters radio. And there's actually a link there that you can find to register as well. We'd love to see if you have any questions about the class, we'd be happy to answer

Roland Daniels 4:07
those. And like Heidi said, we will be covering the different down payment assistance programs, the lending process, and what's happening in the current real estate market.

Heidi Griffith 4:16
Yeah, yeah. They'll actually be a real estate agent on the call, and she'll go over, you know what we're seeing in the valley? Because, you know what? I we probably won't have time to touch on it today, but it really is a tale of two real estate markets. I've been reading a lot, I've been talking to other agents a lot, and we really do have two separate real estate markets happening right here in the valley right

Roland Daniels 4:36
now. We do. And is that due to prices?

Heidi Griffith 4:39
Well, you know, it's due to the types of markets we have. You know, we hear a lot, all over the feeds, all over the news that, you know, you hear two different sides of the story. We're short on housing. That's affordable housing, in my opinion, right short on housing. But then Las Vegas is the fastest, you know, the fastest declining market. For sellers in the country? Well, it's a really interesting kind of thing. You know? Why aren't prices going down? I hear that all the time. I'm waiting for prices to drop. You know, I don't have a crystal ball. I can't tell you if prices are going

Roland Daniels 5:11
to go down. We've been hearing that now for over two and a half years, probably longer

Heidi Griffith 5:15
than that. I mean, in my real estate career that, I mean, that's, that's the hot topic. When are prices coming down until you own the home, then we don't want the prices to come down, right? But, but real estate markets, I don't care where they are in the country, they're cyclical, right? There's highs and lows, but statistics show that they continue to rise way more than they ever drop, even, you know, during

Roland Daniels 5:36
the average right? Because, on average, it's about a 4%

Heidi Griffith 5:40
increase, right? You know, anywhere from three to 6% is it would be the national average for for an increase in value year over year. But, you know, covid 24% year over year. And we've, I've, you know, as long as I've had my real estate license, I've seen double digits, a lot more than statistically below single digits. Yeah. But where we are in the valley right now with prices, you know, everybody's like, well, how is our median value, you know, and depending on what numbers you pull from the MLS. But you know, between 450, and 485, is our average price home. I saw an article just this week that said, you know, you would have to work if you were working minimum wage an average of, like, it was like 190 hours. I don't quote me on that one, but it was an article that you would have to work 190 hours a week if you were making minimum wage to purchase home. And, yeah, prices are high. We know that we need more affordable housing, but the stuff that the articles aren't talking about is, you know what? What price are we looking at? Because I know we not this week, but last week, I actually pulled listings, and there was over 900 properties in the valley, right? So that's Las Vegas, Henderson, North Las Vegas, that were under $300,000 now, yeah, a lot of them are one bedroom condos, but, but there, there's not just $400,000 houses. Are we seeing increases? We sure are. But when I talk about the tale of two different markets, you know, we have a big luxury market here. We do. We have a very big luxury market. And when we're talking average price homes, we're stacking those into the mix. We're including those. You know, the highest priced home that sold in August was was somewhere around $8 million No, no, no, no, that that was somewhere around $12 million okay, highest price listing is somewhere at the $26 million price point.

Roland Daniels 7:42
So the luxury market right now is doing a lot better than the hours. Just say, the normal market

Heidi Griffith 7:48
depends on where you 500 depends on where you look. I was talking to one of our Realtors just today, and she was having a conversation about a buyer who's looking in that 350 to $400,000

Roland Daniels 8:01
range, which is probably the most popular range at this

Heidi Griffith 8:04
point, absolutely, and so are there more houses today than there were six months ago for her to show? Yes, absolutely, there are. There is a bigger selection. But are they sitting for 90 120 days? No, they're not, you know, unless, unless something's not right with the property, or if it's just completely overvalued and the seller is not willing to negotiate. But those homes are selling rapidly. It's not something that you can wait six months and continue to go back to that property, because what these buyers are finding out is that, let's look at a house, and I'm not telling you not to. You know, make great choices and really think about your purchase. It's potentially the largest purchase you're going to make in your lifetime. But don't just assume that that property is going to just be there when you are whenever to look at it, whenever you know. Something that I used to say often, because it was the facts, was that, you know, we want to go home and we want to sleep on things. Absolutely no sales, you know, push, none of that. But what we're sleeping on tonight or next week, somebody slept on last week, right? You know, and they made me bait, yeah, they may be making their decision now. So just food for thought. It really is an interesting market that we're in, and not everybody has just, you know, tons of money to be able to save for that down payment to get in before any potential increases.

Roland Daniels 9:30
And don't forget, as well, you have closing costs as well as your down you've got your down payment

Heidi Griffith 9:34
and closing costs. And the great thing about the market that we sit in today, because we know this as a fact, and we talk about it on the show every single week is that we are seeing sellers contribute towards buyers closing costs. We call those seller credits, seller concessions. But so when you can couple down payment help that could cover your down payment and then get some seller credits, you could come in with, in a lot of instances, less than you could. Rent an apartment when you're considering first last in deposits,

Roland Daniels 10:03
right? Because we just got a contract in and we're using Nevada housing divisions down payment assistance program using

Heidi Griffith 10:10
the 4% so that's the first time home buyer program, it is.

Roland Daniels 10:13
And then we also got seller credits that's covering the entire closing cost for the property.

Heidi Griffith 10:20
And that's certainly not the first time that we've seen that we're still seeing seller credits. They're giving pretty much the entire closing cost to the buyer, so all she's going to be out is her earnest money and her home inspection. Yeah. So again, if you're interested in joining us on Monday, we'd love to have you there. You can reach out. You can register by giving us call or texting us, we're at 702-210-2057, again, that number is 702-210-2057, or you can visit us on mortgage matters, radio, on Facebook, there'll be a link there to hit the Eventbrite and register there. So let's start so it was an interesting week. A lot of good information, a lot bad information. A lot of people waiting, you know, to see, because the Feds met this week,

Roland Daniels 11:07
didn't they? They did on Wednesday, when September the 18th? Was it the 18th? It was the 18th.

Heidi Griffith 11:12
Okay, so, yeah. So Jerome Powell spoke. He did. He's the Fed chairman. He had some interesting news, not really, not much outside of what we already

Roland Daniels 11:20
knew well, it was expected for them to reduce rates by a quarter of a percent,

Heidi Griffith 11:25
by a quarter, because he'd already said that that was the plan. Yes, he did. The previous month, he'd said that that was the plan to see the first reduction we've seen all year, right?

Roland Daniels 11:35
Three in 2024 we had one in September, November and December, right?

Heidi Griffith 11:39
But we hadn't seen one yet. Yeah, 25 this is our 2025 Yep, because we were kind of raising those rates throughout 2025 so we had, we had a lot of telephone calls, right?

Roland Daniels 11:52
Telephone calls, of course, tick tock, Instagram, Facebook. We've seen it all.

Heidi Griffith 11:58
We well, and it was interesting because you actually showed me a video that you'd seen that a real estate professional would put out. But so we got a lot of calls, because when we hear rates are going to be dropped, rates are going to be cut, a lot of people don't really grasp the difference because between the long term and the short term, right? So when Jerome Powell talks about interest rates. He's talking about short term rates, right. He is right. So that was a short term rate. Let's talk about why that move doesn't automatically affect your mortgage rate.

Roland Daniels 12:30
Most importantly, it's the bond market. So when the Fed speaks and they say, well, rates are, they're going to be a probability of rates are going to be reduced. If the bond market or the stock market hears that most of the time, there's anticipation, and those rates are already built in to the current market, to the current mortgage market, current mortgage market,

Heidi Griffith 12:55
because, because in the mortgage world, right when, when the mortgage companies are looking at rates. They're paying very close attention to what's forecasted. That is great. They're paying close attention. So, so we had a good idea that the feds were going to reduce the short term rate. We had a good grasp that it was going to be point two, 5%

Roland Daniels 13:16
yes, and it was talks that it was going to be a half a percent, but the percentage was probably like 40 60% but there was like a 95% chance that the rates were going to be reduced by a quarter of a percent. Yeah.

Heidi Griffith 13:31
And as we moved through last month, there was because of jobs reports, right? Because of economy inflation, because we're we're looking at inflation right now. That's where that talk of maybe we'll do a half a percent, but more than likely, you know, we're definitely going to do a quarter. That's where we are. A lot of people assumed that that was mortgage rates too, that, you know, we were going to see mortgage rates start to fall. I'd heard the video that you showed me showed someone talking about she spoke to her lender, her lender told her that the feds were going to reduce rates. I don't know whether the lender told this person or not that this isn't directly tied to mortgage rates, so we don't know what's going to happen.

Roland Daniels 14:12
Well, during the talk on one of the social media channels, they were saying, well, rates could drop anywhere from a half a percent to three quarters of a percent in just one day.

Heidi Griffith 14:22
And she was talking about mortgage rates, right? And I, when you showed it to me, she actually made the comment that she anticipated, based on what this person had told her, that they were going to be in the fives again, yes. And that was, you know, not great wishful thinking. Well, yeah, we all want, we'd all like that two and a half and three and a half percent back, but no, we knew going in that, you know, hopefully the market responds well to what the Fed has to say, and we do see an improvement in rates, but that's not what happened, is it? And the answer is no, no, no, that. Not what happened.

Roland Daniels 15:00
So when it comes to rates and the market, there's something I want you to know. When the stock market is at an all time high, that means that our economy is doing great, yep. Which means interest rates usually go up, mortgage rates, mortgage

Heidi Griffith 15:18
rates, when the economy is great, we're all making cash. We have life is good.

Roland Daniels 15:23
Yes, we have equity in our properties. The equities are going up. Rates are going up. When the economy is doing poorly, interest rates usually go down.

Heidi Griffith 15:34
So strictly speaking, from the mortgage world, the mortgage world tends to look for these bumps in the economy. They tend to look for these, these things. And they really do put on, you know, rosy little sunglasses when things aren't fantastic. And, you know, I'm sure we all sit here, and we've all had something impact us recently, whether it's the price of eggs, it's, you know, whatever that looks like. I know that everything in my grocery cart is higher, yes, some slightly, some ridiculously. I know that when I'm shopping for my essentials, I'm paying a lot more attention to prices today than I was, let's say, two years ago. I know that I thought I knew prices until I really took a look. And I'm going to keep saying this, because it's just mind boggling to me. The coffee that I drink, I drink a, you know, it's a, just a espresso, roast coffee, right? And it's a brick of coffee. I don't think it's 10 ounces. 10 ounces used to pay 299, all day, every day. And where are we? 299, 699. Is the least expensive I can get it. So now I'm looking for sales, and I'm stocking up when I see it, but that's you know, across the board, we're seeing that, whether it's a couple of cents here and there or dollars, we're feeling it economy we are and the mortgage world is taking a look and saying, Well, if things continue to get worse, we might just see an improvement in rates, long term rates. So this isn't your HELOC, right? So HELOCs follow the short term rates,

Roland Daniels 17:07
like your interest rates on your credit cards, interest rates on your auto loan, car payments. Those are affected by what the Fed says when it comes to the short term, but when you're looking at long term, like mortgage rates, those are affected by the bond market, right? 10 year, the 10 year bond market usually is what we follow.

Heidi Griffith 17:27
And there's a lot of, I mean, there's a lot of nuances that are with that, right? There's a lot of things that come into play.

Roland Daniels 17:32
Well, you have risk that comes into play. You have uncertainty, probably uncertainty in the market, or what's going on. The economy within the world has a great impact and affects long term interest rates.

Heidi Griffith 17:47
Yeah, yeah. And you know, because mortgage rates follow the bond market, like we said, you know that Treasury note, when investors are worried about the economy, they're going to want a higher yield. They do. So that's when they're pushing to the bond market,

Roland Daniels 18:00
right? They're putting their money in the bond market, which, in return, lowers the yield, and then that allows us to lower long term interest rates, right?

Heidi Griffith 18:11
And the Feds actually are the ones that can move this right. Change the kind of feeling the market, yeah, and, but they're not in direct control of

Roland Daniels 18:22
mortgage. They're not but what they say has a direct impact on day to day movement in the interest rate. So the best analogy that I can give you if you pass by your favorite gas station, maybe today, the gas prices are at 429 well, you drive by there tomorrow morning, and it could be 430, or 427, interest rates move throughout the day depending on what's going on in the world, what's going on in the market. What are they saying? There's many, many factors

Heidi Griffith 18:56
involved. Oh, absolutely. So let's talk about this along the same lines, right? We see a lot of people quoting rates, and we normally don't. I mean, we don't, you know, we don't. We have a mortgage show. We're mortgage advisors. We don't quote rates. And it's because every person has a different scenario. They do. They have a different story. Yeah, yeah. So when you see the mortgage rates being quoted, you're probably not getting the full story. You're not, you know, you're not getting the full story. Your personal financial story, really is what determines your rate. So let's talk about those conversations that adds and sometimes people aren't telling you, you know, we're we're a very rate sensitive society, and I'm not telling you that we shouldn't be. The lower the rate, the more we afford, the lower the payment, all of that kind of stuff, right?

Roland Daniels 19:44
It does matter, and from a do, the perspective of a borrower, they've only been taught to ask, what is the rate, right? There are more important factors, like the cost over time, how much interest can I save? Which program? Program will allow me to save money? What will allow me to have more cash flow, more money in my pocket? Not just the rate, right? Because when you look at a raise, there's many factors involved. You have your credit scores, how much you're going to put down, what program that you're actually going to use. There's many factors

Heidi Griffith 20:23
Absolutely, and that's where that, you know, quoting rate gets kind of askew, don't you think?

Roland Daniels 20:28
I think so, because they'll say, All right, the rate today is 5.75 for FHA, and then maybe six, six and a quarter for conventional but how do you know, without looking at someone's personal profile. You don't, right?

Heidi Griffith 20:42
You don't. So they're basing it on an average. They're typically using a 720, plus for credit score. They're using a very specific loan amount when they're quoting those rates right, because loan amount matters to what the rate is total, you know, purchase price, I mean, all of these things play a role in what rate you're going to get. So I know, and I do it all the time. You can actually go on Google, you know, if you've ever thought about purchasing a home, you've probably done this right. And go on Google, or whatever search engine you use, and you can look up what are today's rates, right? And you'll get a list of 10 or 20

Roland Daniels 21:16
different lenders. It could be national lenders, or you can narrow it down to local vendors,

Heidi Griffith 21:21
and there'll be interest rates that are posted, yep. And like so many things, when we want something and when it sounds good, a lot of times we we're not looking at the picture. Picture not looking and we're not reading the fine print.

Roland Daniels 21:34
We're just looking on the left side, where it gives you that rate five and a half or 5.25 interest rate. But if you look to the right and look at the bottom in that small print, it'll tell you how to get that potential lower rate.

Heidi Griffith 21:48
And in many instances, especially with these advertised rates, there's cost associated. I agree, 100 there's cost associated. So that's the kind of stuff that we're not hearing when we're hearing rates quoted. In many instances, we as lenders, if we quote a rate, we have to quote an APR along with that, yes. So they're giving you the APR. They're not telling you how much that rate costs to get side of that APR. And I had this conversation a lot last week, when people were talking about rates dropping, and, you know, maybe looking at refinancing. I'm working with a family member right now, and he's a veteran. He's got a VA loan, and we're looking at doing just an interest rate reduction when it makes sense. So we've been watching that really closely his profile. We've been paying attention to what's going on, and he got an email from his current servicer, person who's servicing his loan, and it just basically said, time to refinance. You know, we can get your rate down, and you can skip two payments. And that sounds great. Yeah, everybody wants to skip payments. Shoot, I want to skip

Roland Daniels 22:51
something, but do they really skip payments?

Heidi Griffith 22:54
No, no, no, no, no, no, no, no. First of all, usually your first payment isn't due until 30 days after you close. Right? Then there's, they're tacking that, that second payment, onto the back end, that's right, which is the interest, right, right? And then what are you doing? You're paying money on that, right? You are so, so does it make it? And was that rate that they quoted them? No, there was a cost associated. And in his situation, doing a VA URL, right? You, you, there's guidelines that you have to have right the rate has to be at least a half a point better than your current rate, and the cost to close on that loan has to be able to be recouped in what 36 months. I believe, I think so. You know, it has to be that cost has to be able to be recouped within 36 months, or the VA doesn't even allow it. But in other conversations with people. We've been taking a look at what the rates are and kind of following that stuff, and they're not looking at the big picture. Hey, I heard so and so say that, you know, rates are five and a half percent.

Roland Daniels 23:51
Now, no, right? Well, I saw an advertisement that came in my email box, and it was with a builder, and they were advertising the low, low rates, like the three point, something, something two, one buy down. But looking at the fine print, you had to have a FICO score of 760, or higher, and they wanted you to put down 40% so you have to read that fine print to actually take advantage of the advertised rates that they're posting. You had to put down 40% 40% Wow, incredible. What was the price of those homes? They started out at $560,000

Heidi Griffith 24:28
so it sounds to me like they're trying to capture cash sales. They probably own the mortgage company. They're trying to capture people who would normally pay cash. They're trying to offer them a big enough deal that it makes sense to finance because, I mean, really, that's what wealthy people do, right? If freights are super low, like they were during that whole covid timeframe when they were two and a half and three and a half percent, people who normally would buy cash were actually financing, because it was like free money to them. That cake, right? Freed up their liquid, right? And, yeah. So yeah, that sounds

Roland Daniels 24:59
so we just want you to. Careful when you hear those rates, because it's very we think it's a disservice for somebody to quote your rate without pulling your credit, knowing your income, what program you're going to use, how much money you're going to put down. These are all factors, debt to income ratio, all different factors that affect the actual interest rate that you'll be paying. And when it comes to the interest rate, the interest rate is usually only when you're getting ready to lock that is the interest rate that says. Interest rates change throughout the day. They change daily, they change weekly, monthly,

Heidi Griffith 25:36
yearly, right? Right? We call it repricing, right? And in our industry, and that's that actually is the best point. So if I asked you today, what's the rate, and let's just say you ran my profile and you gave me today's rate based on me and based on the house that I'm looking for, right? But I don't lock for another week. Well, we don't know what the rate is until I have a contract and I'm getting ready to lock. That is correct. So that's the rate. So you can have an idea of what's going on the market. But if, if you're out there and you're looking at homes, and you're thinking, What's the best thing to do, is talk with a professional and when you when you do get quoted these rates, and if you are purchasing a home, you're in the middle of purchasing a home, make sure that you ask for a loan estimate, especially if you haven't locked on your interest rate, because you want to make sure you're looking for those things that are, you know, associated with cost, right? There's just, we could talk about this for days, because there is just a lot of, in my opinion, bad information out there. And I think that as we go into purchasing home, whether it's our first home, or our, you know, 20th home, that we should have the best information.

Roland Daniels 26:39
And I understand that people are trying to, how should I say, get people excited, but with bad information, we don't think that's the

Heidi Griffith 26:46
best thing. Well, no, because then it kind of feels like you've been, you know, it's kind of that whole bait and switch thing where, you know what you told me it was five and a half. Well, that was on Wednesday, and I, you know, now it's two weeks later, it's gonna cost you three points, right? And three points is, you know, the amount of the loan, 3% of 3% of the loans. Yeah. So it could be hefty. It could be hefty. So before we get out of here today, I want to talk about something we always talk about, right? And that's Silver State Fair Housing, yes. So Silver State Fair Housing Council, they're a private nonprofit agency that's been working to ensure equal housing opportunities for all Nevadans since 1989 they've been around for a long time. They combat housing discrimination by assisting those who feel they've been victims, answering questions, and they work with housing providers and local governments, while Silver State Fair Housing Council helps individuals prepare and submit administrative complaints federal or state agencies like the US Department of Housing and Urban Development, that's HUD or Nevada Equal Rights Commission. They actually just to help you file a claim. They're not the person you go to with the complaint, right? So you know, in one of the key parts of the Silver State Fair Housing councils program is actually working with tester programs right to help battle housing discrimination, right? So it's, it's kind of like mystery shopping, like being a secret shopper, where you pose as a buyer or a renter, and what they do is they send in two different people, same kind of, you know, they have the same needs and wants and all that kind of stuff. They might just have a different background, one may have a disability, one may not, just really depends so that we can make sure that everyone is being treated equally and fairly. Maybe it's different gender, whatever that looks like, we're just kind of trying to get a model and a base so that we can make sure that that housing is being treated equally. They are actively looking for volunteers to join this tester program, and it really is one of those important things that we need to make sure that everyone, all of us, have access to fair and equal housing. If you'd like more information, you can reach out to them directly. They're at 702-749-3288, you can also visit them online at Silver State Fair Housing. So s, s, f h c.org, again, that's s, s, f h c.org,

Roland Daniels 29:11
if you have any thoughts or questions about what we've covered here today, feel free to reach out at 702 to 102057 once again, that's 702-210-2057 we'll be back next Sunday morning at 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. Oh.

Music 29:39
You.

Transcribed by https://otter.ai