Mortgage Matters

Wesley Knight 0:00
This is a Kun V 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.

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

Heidi Griffith 1:05
well, good morning. Roland, happy Sunday. I'm good. How are you Sunday? I am fantastic. Well, that is good to hear I am. Heidi Griffith, I am also a mortgage advisor and your Director of Client Services. My NMLS number is 2247754, I so let's before we jump into everything today, let's talk about the class we had last Monday. It was awesome. It was awesome. It was awesome. It was a class that we held with Nevada Rural Housing that was at the Whitney library. It was first time that we've done a class with both Nevada Rural Housing and at the Whitney library. They had a great facility for us.

Roland Daniels 1:39
Yes, they did. Yeah. It was great. Great participation. We

Heidi Griffith 1:42
did and we didn't. We got to stand next to Kevin Hickey. He was able to share valuable insights about rural housing, but he also explained how rural areas can include parts of Vegas, something that really it surprised a lot of people. It did, because there's a lot of areas just within the valley that can be used with rural housing programs,

Roland Daniels 2:01
there is that we have Whitney right, we do. We have Winchester right, and Summerlin south, and

Heidi Griffith 2:06
there's a few other little pockets sprinkled about. Obviously, it's going to be based on loan amount and that kind of stuff. So does the area work for the program? But yeah, Whitney was a great place to be. That area itself, where the library was does qualify for Nevada rule. And it just was. It was a fun class. We had a great group of people that attended. If you're listening this morning, thanks for coming. It was a pleasure meeting you. And there were some really great questions in class, something that I really enjoyed talking about, outside of the down payment assistance, and we're gonna pass it along as soon as we I'm really as soon as we get the notification, I know, I know. So he talked about the mortgage credit certificate he did, and understanding that just a little bit more really piqued a lot of interest in people, because it really is. It's one of those little hidden gems. We talked about it with him on the radio. We talked about it with him in class, and it's not only for people who need down payment assistance, right, right? You can use it outside of down payment, as long as you're within the Rural Housing guidelines, so if you're in the areas that they work with, so that would be those little pockets that we just talked about here in the valley that could potentially be pretty much anywhere else in Nevada, right? So, Pahrump Laughlin, mesquite up north, Searchlight, Boulder City, yeah. So all of these little areas can utilize this mortgage credit certificate. Yes,

Roland Daniels 3:31
you do have to be a first time home buyer, though,

Heidi Griffith 3:33
right? And what is, and that's, that's great that you say that, because when we say first time homebuyer, and a lot of down payment assistance programs may have a first time homebuyer requirement. The majority of them. First time homebuyer doesn't mean you've never owned a home before death, right?

Roland Daniels 3:49
It just means that you haven't owned a home in the last three years.

Heidi Griffith 3:52
Yeah. So, so you can utilize this with that they've got the income requirements, but rural housing's income requirements are really generous. I mean, you can make up to $165,000 a year that is correct, and not only utilize their programs, but utilize this mortgage credit certificate. So let's really talk about what that is and what that looks

Roland Daniels 4:13
like and and if you are a veteran, you don't have to have the first time home buyer requirement

Heidi Griffith 4:19
that is correct. And if you're in, I believe, I believe he said, if you're in a targeted area, yep, right. And that was an area where they deemed that home ownership was lower, yes, underserved communities, right, right here in the valley, exactly, exactly. So that's waived as well, but veteran, obviously. And so let's talk just for a quick second about what the mortgage credit certificate is. So you purchase a home, yes, and you're in one of these areas, and you're able to utilize that whether or not you use down payment assistance, because you don't, they're not synonymous. You don't have to use the down payment assistance with the mortgage credit, right, right?

Roland Daniels 4:56
You can use an outside loan, and let's say, if you were doing. Just a regular FHA loan, no down payment assistance. As long as you're in one of those areas or a targeted area, you can utilize the mortgage credit certificate, and that's what the MCC is. So it provides qualified home buyers with the annual federal income, and it gives you a credit, roughly around 20% that can be written off on your

Heidi Griffith 5:25
taxes, so of your tax liability, so 20% of your liability, and that's usually early on, right? Because as you stay, as you live in your home, and you continue to make mortgage payments, right, the more years that you live in your home, the less an interest you're paying, obviously, those first few, few years you're paying mostly Right, right? So that's where it's really going to help. When we talked about numbers, he had mentioned a loan amount of 300 RF, purchase price of 350, 45 was it 345,

Roland Daniels 5:53
with the interest rate of about seven and a half percent, and that gives you a tax credit of about $5,100,

Heidi Griffith 6:00
and that's a real credit. That's real dollar for dollar. So you could then use that towards whatever your liability is, whatever you owe, right? The IRS, and he had also mentioned that in the event your liability is less than your credit, yep, you can actually hold on to it for up to three years, carry it over and buy it for the next year or the year following. Yes, that's free money. That is free money, and we can use that to help qualify

Roland Daniels 6:30
you say, if you're tight on your debt to income ratio. So we can use that say, if it's $5,000 divided by 12, we can use that as

Heidi Griffith 6:40
income, additional income. Yes, we can. So if you have any questions about that, you're you know, you're always welcome to reach out to us before we get into today's show. Let's just really take a quick moment. Tomorrow is Martin Luther King Day, right? It is. His legacy reminds us how essential housing equality is to building strong, thriving communities, one of his key efforts during the Civil Rights Movement was a push for fair housing, wasn't

Roland Daniels 7:05
it? It was, and it's so important in today's world. It

Heidi Griffith 7:10
and that portion of the movement right. It led to the Fair Housing Act of 1968 I really believe it's a great reminder of why we do you you and I, what we what we do, help families achieve their dreams of home ownership while promoting equality and opportunity for all, for all, for all.

Roland Daniels 7:29
Very important. And let's not forget, like you said, Tomorrow is the parade that is correct, and it starts at 10am downtown. It's always a fun parade. It is speaking of which we've got a packed show. Today we'll be talking about upcoming classes, how to avoid getting flooded with sales calls when applying for credit using your 401 K for home purchase, understanding good debt versus bad debt, and answering a great question from one of our listeners regarding closing costs,

Heidi Griffith 8:04
absolutely. So let's get started. We have a couple of upcoming classes. Right? First opportunity to learn more about home ownership and down payment assistance will actually be this Thursday, January 23 this is an online class. It is. It's an online class with the Nevada housing division. It's a quick one hour session. It's going to be from four to 5pm and you're going to gain insight, but you're going to also receive your home buyer education certificate, right? We need that. We do qualify for these programs, and here's a little insiders tip. With the Nevada housing divisions home ownership certificate, we can actually utilize that with the Nevada rural housing programs.

Roland Daniels 8:43
So that means I don't have to take another class. So you wouldn't utilize Nevada Rural Housing.

Heidi Griffith 8:47
That is correct. That is correct. So if, for whatever reason, you attended the class, you got out, you were looking for homes, and you happen to fall in one of the areas that we talked about earlier that we could utilize the Nevada Rural Housing down payment assistance programs, than what we would do after meeting with you and going over options, is we would kind of let you see what was available, and then you could make the best decision for you as to which program you wanted to use. Right?

Roland Daniels 9:13
You come to the online class, you get your certificate, and it's good for both Nevada housing division and Nevada, rural house, and

Heidi Griffith 9:21
it's only an hour, and it's only an hour, and you can do it from the comfort of your sofa. Unfortunately, because it's online, there will not be snacks. No snacks. Well, you can bring your own snacks. I mean, if you really want snacks, okay, now I feel bad. Don't

Roland Daniels 9:34
feel bad. I'll make sure I get you snacks so you can attend, like Heidi said, from the comfort of your home, and the information that you will gain is priceless, especially for first time homebuyers. Yeah,

Heidi Griffith 9:47
absolutely. So when we talk about Nevada housing, I think we work with about 16 different down payment assistance we do and they come and go, right, right, but right now we've got about 16 Nevada. Housing tends to be the one that gets utilized the most. It is our flagship. It is just because it covers first and foremost the entire state. There are no restrictions as to location. In Nevada, they've got programs that work for both first time homebuyers and like we talked about, right first time homebuyer doesn't mean you haven't ever owned a home before. That is correct. They've got, they've got down payment assistance, anywhere from 2% to 4% for the first time homebuyers, right? But we can go from 2% to 5% is their maximum, right? For their down payment assistance. Hopefully they'll get some new programs coming up as well. And then, if you're let's just say you're a veteran, right? We do have vets that call us and ask about down payment assistance. Here's the thing, if you are either active duty or retire, retire if you're a veteran, even you know, if you're a vet, really think about using your VA loan. And with that being said, VA loan has no down payment, many advantages, right? Because you don't have any mortgage. And I mean, it just really is great. I think it's one of the best benefits,

Roland Daniels 11:10
and that are very underutilized. Only about between 10 and 15% of the veterans actually use that VA benefit, and

Heidi Griffith 11:18
those are people that have actually purchased homes, yes. So a if you are a veteran, or you know a veteran, thank you for your service, or make sure you thank you. But a great benefit that Nevada housing does offer to veterans is a lower than market interest rate. Yes, a reduced interest rate, reduced interest rate. So if you're not needing down payment assistance, then our vets have that available to them as well. And in these classes, we'll actually have a representative from Nevada housing division who's going to go over all of the down payment programs that they have, because there's, you know, there's teacher programs, there's all kinds of stuff that they do, and that can be available to people, then you'll actually be doing the the mortgage portion of that class. I will

Roland Daniels 12:07
and then remember, there's also a the hip for home buyers that allows you to utilize the assistance even if you own, say, another property or multiple properties in another state.

Heidi Griffith 12:19
That is correct. So let's just say you're moving to Vegas from California or Arizona or wherever, right? But you're moving to Vegas you've got a home somewhere else, yes, and you really don't want to sell it, maybe you want to rent it. Yep, you can actually utilize down payment assistance here in Nevada, as long as it's your primary residence, right, that you're going to move in, that you're going to move in and live in that home is your primary you can still keep that additional property and utilize down payment assistance. Now, with Nevada housing, you can't reuse those benefits. So if you've used them before, you can't use them again, right? It's just a one time right now, with Nevada Rural, over and over and over, can actually reuse their down payment program. So yeah. So there's just some little quirks with both. But it's a quick class. Roland is going to be doing the mortgage portion, so he'll explain how you qualify, what you're going to be looking for with debt to income credit looks like all of that good stuff. And then we'll have a realtor there who will go over all of the real estate stuff. So what you need to do once you have gotten your pre approval, you know what you're doing when you're looking for homes, the current affairs in the real estate market. It really is a great class that's packed into just an hour, just an hour of your time, well worth it. In my opinion, it

Roland Daniels 13:33
is. So if you like more details about either or either of these classes and you would like to register, all you need to do is call or text us. That number is 702-210-2057 that's 702-210-2057 or you can visit our brand new Facebook page, mortgage matters radio, yeah,

Heidi Griffith 13:58
it's exciting. I'm glad that we have that up and going, Yes, we actually have our classes. We've got a link to our classes that you can register for directly on the Facebook page. I've posted some photos. There's a little outtake that will probably make you giggle when you see it.

Roland Daniels 14:15
So yeah, you'll have to let us know your thoughts on that outtake. I'm turning red. It should be quite funny.

Heidi Griffith 14:25
We also have another class coming up following this class, right? And that's our monthly class that's going to be on Saturday, February 1. It is. That's the monthly HUD certified Freddie Smart Home Ownership workshop that we hold alongside CPLC. They're the nonprofit HUD counseling agency that we work with right that workshop runs from 830 to three, and it covers really, I mean, it really does cover everything from A to Z with the home buying process. It goes over all of the down payment assistance programs, budgeting, plus, wish, yes. Yes, talk about the wish program is a four to one match, four to one match. Explain that. So for an example, with the wish program list, last year, the minimum was $3,000 that you had to have in your checking or savings account. And they'll give you time to develop that $3,000

Roland Daniels 15:15
so they'll match it four to one so you have 3000 multiply that by four. Now you have $12,000 in addition to your 3000 so now we have $15,000

Heidi Griffith 15:28
to work with. And is that a down payment assistance program? It is not. It is not it is not. So when you sell your house or refinance, do you have to pay that back?

Roland Daniels 15:38
You do as long if it's less than five years, if it's less than five years, but after five years, five years, it is forgivable. Forgivable, yes. So can you imagine, I think the maximum you can get up to $30,000

Heidi Griffith 15:50
for that program. And can you use Down Payment Assistance alongside that?

Roland Daniels 15:55
You can, and the funding will start again. This April, we'll have new guidelines for 2025 usually every year, they'll increase the income limits, the income limits, and we should know sometime right around March. And we will make sure that you guys are informed. Yeah,

Heidi Griffith 16:13
we'll keep you up to date about that, and we'll go over that in the class. Right? We will, again, you do that portion, it's an hour long mortgage portion you talk about really, I mean, this is really in depth. You talk about everything, up to and including all of the down payment assistance programs we offer, we do and we always run out of time. The the HUD counselors go over credit they go over true budgeting, yes, they go over how to manage credit card debts, yeah. I mean it. You hear from a Certified Insurance agent who talks about homeowners insurance. You hear about home inspections, what they cover, what to look for. It's one of those classes that, yeah, you commit to. You know, from 830 to three, so pretty much your whole day you're committing to this class. But in my opinion, especially if you've never owned a home before, it's certainly well worth it. Are there snacks? There are so many snacks, and we also provide lunch. Yeah, so there's there's granola bars, there's fresh fruit, there's coffee, there's water. They have sometimes danishes, plus pizza. So

Roland Daniels 17:22
what do you bring? All we ask is you bring an open mind and a willingness to learn. That's all we ask of you. Fill your

Heidi Griffith 17:30
belly and your brain. That's right, I love it. So again, Roland said earlier, if you have any questions about either of these classes, or if you'd like to register, please feel free reach out. We're at 702-210-2057, again, that number is 702-210-2057.

Roland Daniels 17:50
So let's talk about a common frustration that we hear from clients. Okay, actually, I just got a call last week, unwanted sales calls after you apply for credit, right? Oh,

Heidi Griffith 18:03
it can be such a bummer, right? And we're not just talking about, you know, you apply for a certain type of anytime your credit is pulled, anytime you get a hard credit pool. Here's what's happening under the Fair Credit Reporting Act, facr, for short, that's the acronym under this act, credit bureaus are actually allowed to include your information on list for what's called firm offers for credit or insurance. So that means that they are legally able to sell your information. Yep, I'm sure that we've all gotten those calls and they're not happy calls, are they? They're not they are not happy

Roland Daniels 18:41
calls. Actually, we pulled credit last week and I got a call. How many? He said they called him. He was received over 70 calls in less than 48

Heidi Griffith 18:53
hours. No joke, no joke. Yeah, not, not a fun thing to have, and especially for people like us, right? We have to answer our phone. We do because we get phone calls from unknown numbers all the time, and if it's you calling, you want to, you know, you want to know that we're going to be able to answer our phone and not be worried that it's a spam call. But not everybody have that luxury to not answer. And even if you don't answer, it's just a pain. It has a pain, it's a pain, it's annoying. But there is good news, right? There's a way to kind of circumvent it.

Roland Daniels 19:21
Yes, and they are trying to pass a bill in Congress right now to stop those robocalls. I'm keeping my fingers we are too, and we'll keep you informed of that as well. Yeah, I'm keeping

Heidi Griffith 19:32
my fingers crossed on that one, but, but there is also a kind of workaround. So if you know that you're going to be applying for credit so you're gonna, you know, think about purchasing a home. Think about purchasing a car. There is a website that you can go to that is opt out pre screen.com opt O, P, T, out pre screen.com and that will stop your information from being shared. Yeah, or

Roland Daniels 20:00
you can call the number. There's a 188856786, looks like eight, eight as well. Oh, okay,

Heidi Griffith 20:09
so you want to give that again, 1-888-567-8688,

so that's opt out, pre screen, and I would recommend that if you plan on making a purchase like that and having your credit pulled in, I'm gonna assume that most of us know a couple weeks in advance that this is something we're going to do. If you have that capability, I would give it a couple weeks because it doesn't happen instantaneously. I know that we've recommended what, between five and 14 days, I would you know, the the sooner you can do it, the better, because we all know that those calls can be a pain, and also really consider registering your phone number with the National Do Not Call Registry, right? It's not going to block all of the calls. It's going to reduce them, though, and you're going to and you're going to get less of those robo calls. So if, in fact, you do register on the Do Not Call Registry, remember this, right? And you continue to get calls, especially if it's from the same company, place, people, right? And it's not ever the same number anymore, because now they use these rolling numbers, but you can actually report them to the FTC, and

Roland Daniels 21:20
that website address is do not call. So that's D, O, N, O, T, C, A, L, l.gov,

Heidi Griffith 21:29
G, O, V, right. Do not call.gov and

Roland Daniels 21:32
I also have a phone number for them as well. And that's 1-888-382-1222,

Heidi Griffith 21:41
that's excellent. I really believe it's small steps like these that are actually going to make your process smoother, less stressful, all of that good stuff. So really quickly, let's talk about something that a lot of people don't think about when thinking about purchasing a home. And what is that? How about using your 401 K to help with your down payment.

Roland Daniels 22:03
That is an awesome idea. Yeah, as long as it works for you, we want to make sure that you speak with a tax professional before doing this or while you're going through the process. Okay, we want to make sure you check with your employer as well to see how much are that's available to you to use,

Heidi Griffith 22:21
and that's usually just a call to your HR department,

Roland Daniels 22:23
right, right? Yeah, and you would just want to make sure what you're going to use. And if there's any penalties, usually there's some type of waiver for using it as a first time homebuyer.

Heidi Griffith 22:33
So if you haven't purchased a home before, you may be able to access your 401, K to borrow against the account, right? And in a lot of times, it's pretty favorable terms, because it's your money. It is. You're virtually borrowing from your money, and you're gonna have to pay yourself back. And

Roland Daniels 22:52
don't forget, in addition to 401, K, there's also the conventional IRA, Roth, Ira and an inherited IRA. So those are all assets that you can utilize for as a first time home buyer to purchase a home, say, if you're short on funds when it comes to your checking and savings accounts, right? And

Heidi Griffith 23:12
a lot of people, I mean, when we're when we're looking at getting people pre approved, and we're talking about the money, because that's always the scary part, right? The money is always the scary part. And we start talking about assets, a lot of people completely forget

Roland Daniels 23:27
that they have that 401 case sitting right there, and maybe it has 10 or $20,000 for use, yep,

Heidi Griffith 23:33
yep. And so we end up seeing a lot of people utilizing their 401 Ks, yep. It sure does to become

Roland Daniels 23:39
homeowners, yeah, or just using it for assets, right,

Heidi Griffith 23:43
right? And it's not a one size fits all solution, obviously. So you're going to want to make sure that you consult with your financial advisor or lender and determine if this is actually going to be the right move for you. Just know, again, there's

Roland Daniels 23:55
options. Right name of the game is to have to have options. Yes, it is. So if you're curious about using your 401 K to help with down payment or closing costs, feel free to call or text us. That number again, is 702-210-2057 that's 702-210-2057 and we'll be more than happy to discuss all of your different options. Yes.

Heidi Griffith 24:21
So let's talk about the question of the week. We got a great question this week. What is the question? Our question? It comes from Cynthia. She actually text us after last week's show. Okay, she asked, I'm thinking about getting ready to purchase my first home. Yes, I heard you mention closing costs on your show. I think I understand the down payment part. But what are closing costs and how much are they? That

Roland Daniels 24:44
is a great question. It is right. It is so when it comes to closing costs, it could be anywhere from your lender fees, title fees, your upfront Mortgage Insurance. Insurance, insurance premiums, that all plays a part appraisals,

Heidi Griffith 25:03
yeah, so they're just fees that you need to close that is we get a lot of times we will have conversations with folks, especially when we're talking about down payment assistance, right? And the conversation goes like this, okay, so this is going to cover my down payment. Yes, this is going to cover your entire down payment. Oh, so, no money. No, no, you have to have some skin in the game. There's going to be money involved. Yes, there is. There's money involved. You've got to have some money to purchase a home. You do even with down payment assistance, because there are closing costs. And some of those costs associated with closing actually happen prior to closing, right? Yes. So things that you need before you even get to the closing table,

Roland Daniels 25:48
right is that where the earnest money deposit comes into play is where the

Heidi Griffith 25:53
earnest money that's the first bit of money that you're going to need, and your earnest money deposit is going to be about 1% of your sales price.

Roland Daniels 26:02
So what does that look like in say, my sales price is, say, 400,000 if your

Heidi Griffith 26:07
sales price is 400,000 you can expect for your earnest money deposit to be about $4,000 give or take. Everything's negotiable. You know, we've seen plenty of purchase agreements where the sales price was or the earnest money deposit was 3000 on a $400,000 house. We've seen a little bit more. It just, is really going to depend. But 1% is a good number. And what an earnest money deposit is is, it's really a, you know, it's a deposit that you're giving the seller in good faith, and you're not handing the seller the money, you're not handing the realtor the money, you're not handing the lender the money. The money goes to the title company. Is it still my money? It is still your money? Right? Now, however, you always want to make sure to refer to your purchase agreement, because there's lots of things that can happen to that earnest money if we break our contract, right? So you want to make sure you always, always, always, always you want to talk to an expert when you read your contracting. You know most people don't buy houses every day. They're not reading real estate purchase contracts every day of the week, right? So any questions you have, you speak to your realtor about if you need to speak to a professional, if you need to speak to an attorney, if you need to speak to a HUD counselor. A HUD counselor can look over your purchase agreement and give you that information as well. But let's get back to the earnest money deposit really quickly. That money goes into an escrow account and just sits there when you close the transaction. Right at closing, that money is then credited back to you. So if you were supposed to, and I'm just going to use even numbers right now, if you needed $15,000 to close and you gave $5,000 earnest money. All you need now is 10,000 because your 5000 has already been sitting there. Okay, along with the earnest money, before you close, you're going to need your home inspection, because you're gonna have to pay the home inspector to inspect. That's going to be, you know, 400 to $800 depending on the property. Then you're going to need to pay for your appraisal? Do I need an appraisal? You have to have an appraisal. When you're getting a loan, the lender will require an appraisal, and you are responsible for paying for that. So those three things are before you even get to the closing table. So those are some closing costs, right? There are costs associated with closing. Then, like Roland said, you've got, you know, title fees, you've got escrow fees, you've got lender you've got a bunch of different fees that are going to you're going to have to pay. And what are those? Usually run between? We usually tell people, you know, between two and 4% play it safer. Yes. So three, three and a half, three, three and a half percent, three, three and a half for the closing cost. So I know that you're great about telling folks, you know, if you're looking at you're trying to buy a house, what's it gonna cost me? So based on that $400,000

Roland Daniels 28:48
price, right? So 400,000 multiply that by a safe number, is about 7%

Heidi Griffith 28:53
7% that's your down payment engine closing costs combined. So you

Roland Daniels 28:57
need about $28,000

Heidi Griffith 28:59
to make it work, right? And so if you're utilizing down payment along with that, then you would just take the down payment off the back end. Yep, that is correct. So hopefully that answered your question. Thank you so much again, Cynthia, if you'd like to hear your question on air, you can feel free to reach out, be

Roland Daniels 29:15
sure to join us next Sunday at 730 right here on K, U, n, b, 91.5 so until then, we wish you a wonderful week. And as always, we are here to help make your dream of home ownership a reality. Remember, stay true to yourself and your mind.

Heidi Griffith 29:36
Have a great Sunday. Bye.