8 Questions Your Lender Should Answer About Mortgage Rates

Simply checking online for today’s posted rate may not lead to your expected outcome due to the many factors that can cause each individual rate and closing cost scenario to fluctuate.

We can preach communication, service and education all day long, but it’s our ultimate goal to earn your trust so that you can be confident in our ability to successfully lead you through this complex mortgage process.

Since mortgage rates can change several times a day, the following questions will help determine whether or not your lender truly knows what to look for so that they can provide you with the best rate once you’re in a position of locking in your loan:

Who determines mortgage rates, and what are they tied to?

Mortgage interest rates are determined by the pricing of Mortgage Backed Securities or Mortgage Bonds. The media often implies mortgage rates are based off the 10-year Treasury Note, which is incorrect.

While the 10-year Treasury Note has been known to trend in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions.

How often do mortgage rates change?

Mortgage rates may change throughout the day, however they only change on days when the Bond markets are trading securities since mortgage rates are based on Mortgage Bond prices.

Think of a Mortgage Bond’s sales price similar to that of a Stock that trades up and down during the course of a day.

For example – let’s assume the FNMA 30-Year 4.50% coupon is selling for $100.50. The price is 50 basis points lower from the previous day’s closing price of $101.00.

In simple terms, the borrower would have to pay an additional .50% of their loan amount to have the same rate today that they could have locked in the previous day.

What causes mortgage rates to change?

Mortgage Bonds are largely affected by various market forces that influence the changing demand for bonds within the market.  Some of the key economic factors that have the greatest impact are unemployment percentages, inflationary fears, economic strength and the overall movement of money in and out of the markets.

Like stocks, most fluctuation is caused by consumer and investor emotions.

What do you use to monitor mortgage rates?

There are several great subscription based services available to monitor Mortgage Bond pricing.

The key is to make sure the lender is aware they should be monitoring Mortgage Bond pricing, such as the Fannie Mae 30-Year 4.50% coupon… and not the 10-Year Treasury Note or the news media.

When the Fed changes rates, why do mortgage rates move in the opposite direction?

It is a common misconception that when the Federal Reserve implements a rate cut it is immediately correlated to a reduction in mortgage rates.

The Federal Reserve policy influences short term rates known as the Fed Funds Rate (“FFR”). Lowering the FFR helps to stimulate the economy and increasing the FFR helps to slow the economy down. Effectively, cutting interest rates (FFR specifically) will cause the stock market to rally, driving money out of bonds and creating potential for inflation.

Mortgage Bond holders need to obtain a higher rate of return on their money if inflation is increasing, thus driving up mortgage rates. With the Federal Reserve Board meeting every six weeks, this is an important question to ask. If your lender does not have a firm understanding of this relationship, they may leave your rate unprotected costing you thousands of dollars over the life of your mortgage.

Do different programs have different interest rates?

Conventional, FHA and VA loans can all carry different rates on a 30-Year fixed mortgage. FHA and VA loans are insured by the Federal Government in the event of defaults.

Conventional mortgages are insured by private mortgage insurance companies, if insurance is required.

Typically, FHA and VA loans carry a lower rate because the investor views the government backing as less of a risk. While rates are usually different for each program, it may be more important to compare the monthly and overall cost during the life of the loan to determine which program best suits your needs.

Why is an Adjustable Rate Mortgage (ARM) rate lower than a fixed rate mortgage?

An Adjustable Rate Mortgage (ARM) is usually fixed for a specific period of time. The period is typically 6 months, 1 year, 3 years, 5 years or 7 years. The shorter time period the rate is fixed, the lower the interest rate tends to be initially.

This is due to the borrower taking the future risk of increasing interest rates. The only instance where this would not be true is when there is an inverted yield curve where short-term rates are higher than long-term rates.

Why are rates higher for different property residence types?

Mortgage interest rates are based on risk-based pricing. Risk-based pricing allows adjustments to par pricing for risk factors such as; FICO scores, Loan-to-Value percentages, property type (SFR, Condo, 2-4 Units), occupancy (Primary, Vacation or Investment) and mortgage type (Interest Only, Adjustable Rate etc).

This allows the investors who lend their money for mortgages to receive additional compensation for taking additional risk.

If the borrower encounters a financial hardship, are they more likely to make the payment on the home they live in or the one they rent out?

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Related Mortgage Rate Articles:

• Mortgage Rate Overview
• Top Five Market Factors That Influence Mortgage Rates
• What’s The Difference Between APR and Note Rate?
• How Are Mortgage Rates Determined?
• How Do Mortgage Rates Move When The Fed Lowers Rates?

A mortgage is generally the largest debt most homeowners have to manage.  It’s a good idea to give your personal real estate finance portfolio a check-up at least once a year. Since there are many reasons a homeowner may choose to refinance, we’ll take a look at the four most common.

1)  Mortgage Rates Drop

Typically, the most common reason that homeowners refinance their mortgage is to secure a lower interest rate. Interest rate and loan amount determines the total cost that a borrower will pay. The lower the interest rate, the less the overall cost will be. Interest is calculated on a daily basis and usually paid back to the lender on a monthly basis.

2)  Lower Payments

Lowering a mortgage payment can be achieved by lowering the mortgage rate, lengthening the loan term, combining two or more loans or removing mortgage insurance.

3)  New Mortgage Program

Refinancing an Adjustable Rate Mortgage (ARM) to a new Fixed Rate Mortgage (FRM), combining a first and second mortgage or paying off a balloon loan are three possible reasons to explore a refinance.

4)  Debt Consolidation

If there is sufficient equity, sometimes paying off consumer debt by combining all debts into one lower monthly mortgage payment can significantly reduce the short-term deficits in a budget.  However, it’s important to keep in mind the total cost of that debt by adding it into a 30 year mortgage payment.

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Frequently Asked Refinance Questions:

Q:  Do I have to refinance with my current mortgage company?

No, you may choose any company to refinance your mortgage since the new loan will replace the existing mortgage.

Q:  Is it easier to refinance with my current mortgage company?

It is possible your current mortgage company may require less documentation, but this could add additional cost or a higher interest rate. Do your homework and shop around to make sure you’re getting the best deal.

Q:  Will I automatically qualify if I’ve never made any late payments?

No, you will have to qualify for your new refinance. However, certain programs will allow for reduced documentation like a FHA to FHA Streamline Refinance.

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Related Article – Refinance Process:

• Refinance Process Overview
• Mortgage Approval Process
• Calculating The Net Benefit Of A Refinance
• Should I Refinance Or Get A Home Equity Loan To Make Improvements?
• What Do Appraisers Look For When Determining A Property’s Value?
• Understanding The Difference Between Appraised Value vs Neighborhood Listing Comps
• Five Myths About Home Values

Let’s start off by saying that purchasing price aside; it is obvious that a new Las Vegas home will be relatively free of the aging problems that require maintenance in older homes. Kitchen and laundry room appliances will be under temporary warranty for a year or so, the a/c system may be under a manufacturers warranty for five to ten years, the hot water heater is usually under warranty for about five years, sometimes longer.

In regard to purchasing however, due to the higher costs of land today, the price per square foot of new construction will be considerably higher than in an older home. The interior design of new homes, however, makes more efficient use of space than most older homes.

A builders warranty covers structural defects, and the buyer’s homeowner insurance adds further protections. New, energy-efficient appliances, Energy Star windows and improved insulating materials make for lower utility costs than older homes.

Older homes, those that are in move-in condition, and are about five to ten years old may have added amenities that might be very expensive to add to a new home.  Older homes than that may have architectural features that are more pleasing to the eye than many of the newer “cookie cutter” designs seen in many communities.

Many older homes were made with sturdier building materials than today’s homes, and the exorbitant costs involved in building a home today has forced builders to compromise in certain expenditures affecting the home’s construction.

Older homes will unquestionably require more maintenance and a home owners warranty would be a sound investment. Well-kept older homes are usually on larger lots and have mature landscaping, that lends ambience to the property. Shrubs and trees on new property may take years to mature, and the expense of lushly landscaping a new property can be cost-prohibitive.

Some buyers look for quiet, well-kept and stable, established neighborhoods where older homes are located. Others may prefer a modern sub-division with amenities such as a clubhouse, tennis courts, and a workout room.

As it can be easily seen, age of the buyers, number of children, if any, overall family lifestyle – active or sedentary – financial resources, etc. will generally dictate the preference for housing type and neighborhood.

As with any purchase, “let the buyer beware.” What that means is if you are buying a new home, check the builder’s reputation and net worth, and make sure it is the builder and not some subsidiary you are dealing with.

An older home’s overall health should be verified by a certified home inspector before you take the plunge.

 If you have any questions about buying a home in Las Vegas, feel free to give us a call at 702-376-0088.

Although every situation is unique, it is not uncommon for home-buyers to qualify for a mortgage on a new home while still living in their primary residence.

Perhaps you are outgrowing your current house, or have been forced to relocate due to a job transfer?  Regardless of the motivation for keeping one property while purchasing another, let’s address this question with the mortgage approval in mind:

So, Do I Have To Sell?

Yes. No. Maybe. It depends.

Welcome to the wonderful world of mortgage lending. Only in this industry can one simple question elicit four answers…and all of them may be right.

If you are in a financial position where you qualify to afford both your current residence and the proposed payment on your new house, then the simple answer is Yes!

Qualifying based on your Debt-to-Income Ratio is one thing, but remember to budget for the additional expenses of maintaining multiple properties. Everything from mortgage payments, increased property taxes and hazard insurance to unexpected repairs should be factored into your final decision.

What If I Rent My Current Property?

This scenario presents the “maybe” and the “it depends” answers to the question.

If you’re not quite qualified to carry both mortgages, you may have to rent the other property in order to offset the mortgage payment.

In that scenario, the lender will typically only count 75% of the monthly rent you are proposing to receive.

So if you are going to receive $1000 a month in rent and your current payment is $1500, the lender is going to factor in an additional $750 of monthly liabilities in your overall Debt-to-Income Ratios.

Another detail that can present a huge hurdle is the reserve requirement and equity ratio most lenders have. In some cases, if you are going to rent out your current home, you will need to have at least 25% equity in order to offset your payment with the proposed rent you will receive.

Without that hefty amount of equity, you will have to qualify to afford BOTH mortgage payments. You will also need some significant cash in the bank.

Generally, lenders will require six months reserve on the old property, as well as six month reserves on the new property.

For example, if you have a $1500 payment on your old house and are buying a home with a $2000 monthly payment, you will need over $21,000 in the bank.

Keep in mind, this reserve requirement is incremental to your down payment on the new property.

What If I Can’t Qualify Based On Both Mortgage Payments?

This answer is pretty straightforward, and doesn’t require a financial calculator to figure out.

If you are in this situation, then you will have to sell your current home before buying a new one.

If you aren’t sure of the value of the home or how your local market is performing, give us a ring and we’ll happily refer you to a great real estate agent that is in tune with property values in your neighborhood.

As you can tell, purchasing one home while living in another can be a very complicated transaction.  Please feel free to contact us anytime so we can review your specific situation and suggest the proper action plan.

Seller Strategies

When a Las Vegas listing agent and a client talk strategy, there is one question the agent does not have to ask his/her client: “what are your priorities?” And the reason the agent doesn’t have to ask is because the answer is already known: “Sell my house quickly and at the highest possible price!”

In today’s market that is a tall order, even if the house is exceptional and the pricing attractive, although a property such as just described would certainly sell quicker than most.

But the more houses on the market the more hesitation enters a buyer’s mind, like somebody in a singles bar who sees an attractive girl and strikes up a conversation, but always has one eye on the door, wondering if someone better might come in.

How then do you, the seller, overcome the hesitancy of the buyer, the neighborhood competition and the prevailing buyer’s attitude that even if the home looks good and is priced right, will prices continue to fall, and will I be able to buy this home at an even lower price in a few months or less?

There is no question that selling your home at the present time represents a real challenge for you and your agent. A challenge, yes! An impossibility, NO!

There are strategies to implement and things to be done that can turn the odds in your favor. Keeping a confident mind set and a belief in your strategy is the way to set about marketing your home with determination.

In boxing, a fighter with the determination and the will to win can often overcome superior skill, by causing the less determined fighter to lose confidence. Don’t lose confidence in yourself or your agent.

The first things to do are no-brainers to anyone, either buyer or agent who has done the research, and knows the basic procedures required prior to putting the property up for sale, and that is:

• Fix the place up! Clean, straighten, neaten, organize, that’s known as “staging.” An important part of staging is making the home spotlessly clean and eliminating ALL clutter everywhere, including the garage.
• “Curb appeal” means getting the lawn mowed, shrubbery trimmed, potted flowering plants strategically placed, clean, uncluttered driveway, etc.
• Make all necessary repairs recommended by the house inspector you should definitely hire.
• Your agent knows this, but you should be aware that equally important to the above steps to take is to price the home properly in accordance with current market conditions.
• In order to arrive at a figure that will lure buyers and leave you a decent profit, your agent must do a comparative market analysis, taking into consideration many factors that influence fair market values.

If you want to sell your home in Las Vegas quickly and at the best possible price, give us a call at 702-376-0088 as we have the expertise and negotiating skills that you need in an agent.

Property “flipping” earned a bad reputation is some areas such as Las Vegas, when speculators descended on the Valley a few short years ago, and bought houses at prevailing rates and immediately resold for much higher prices as the demand for housing remained strong. The practice soon resulted in the rapid escalation of residential housing market prices, sending them soaring sky-high.

However, there is nothing wrong or illegal about flipping, except in fraudulent cases, when an unethical flipper in collusion with an equally unethical appraiser conspires to artificially inflate the market value of a property.

When the flipping market was strong, due to the demand for housing, flippers were for the most part selling homes in ready to move in condition. These were homes that received multiple offers as soon as they were put up for sale.

In today’s market flipping has become a greater gamble, since homes in good condition are selling at market price, with not much-if any- profit margin left for the flipper due to housing prices continuing a slow but steady downward spiral.

In fact, because of the unpredictability of today’s housing market, the flipper may buy a house today that will have lost value by tomorrow.

Additionally, if the home is in need of repair, depending upon the extent of the repairs and the time and expense involved, the flipper might be better off holding and renting until the market trends become more favorable. If that strategy is followed the flipper will then be a long-term “investor” and landlord as well.

The flipper who converts to a long-term investor is aware that many properties on the market today are undervalued, and healthy profits will be had in the near – or possibly distant – future, when demand is greater than supply.

Certainly, the cost of buying and repairing a property, the time required to find a tenant, as well as overhead costs as compared to rental income must be considered by the careful flipper/investor before making a commitment to purchase.

Good timing is a very important factor in any real estate investment, but even more so for the investor who specializes in flipping. How much risk is the flipper willing to take? Is the flipper confident in his/her ability to read and forecast market trends? Is the flipper willing to become a temporary landlord?

Another factor to consider, is that a home that seems suitable for flipping may not be as suitable as a rental property for one reason or another.

Another most important consideration in any real estate investment is the exit factor. An exit strategy must be considered before purchasing any property. Since no one can predict the future, market trends can be evaluated intelligently, but it all still amounts to guesswork.

Investors need to have exit plans A, B and C in order to be able to adapt and adjust to any changes and variations in housing supply and demand, as well as the kind of properties that will be most in demand now and in the future.

Certainly, most people involved in the business of real estate are honest and hard-working but, as in any business, or enterprise if you will, there are “bad apples.” And, when times are tough, and economic hardships prevail, bad apples proliferate.

Fraudulent real estate practices are nothing new, of course, but in the last few years, unsuspecting people are being victimized in unprecedented numbers, directly as a result of the housing crisis we are now experiencing.

There are “vultures” in every walk of life that prey upon the misfortunes of others, and when people are in a difficult situation they will often turn to anyone who offers a ray of hope.

Famed bank robber Willie Sutton was once asked why he robbed banks, and his answer was, “because that’s where the money is!” So it is with the robbers who commit real estate and mortgage fraud.

Mortgage and real estate fraud are multi-million dollar enterprises, and since there is much less of a chance to be shot at, mortgage and real estate fraud is a lot less risky than bank robbing.

Real estate scam artists often focus on desperate people who are facing foreclosure, and don’t know where to turn for legitimate help. The scam artist will try to convince the property owner that the only way to save the home is to deed it to another person -on a temporary basis. The intent, of course, is to steal the property.

Mortgage fraud, as opposed to real estate fraud -even though there isn’t really much of a difference- involves the misrepresentation of information. For example, the use of false appraisals which are designed to fraudulently increase property values, falsifying loan applications and the like.

False documentation and identity theft are often part of a real estate scammer’s methods of operation as well. Delays in the processing of deeds and other relevant documentation often give these thieves the opportunity to actually sell a single property a number of times before the paperwork on the original sale has been recorded.

Scammer’s recruit unethical notaries who conveniently “overlook” the verification of signatures, and allow blank spaces on documents that can be filled in by the scammer at a later date.

To qualify for a mortgage loan, other types of fraudulent practices often employ such schemes as falsifying assets by disguising rental property as owned property, counterfeit pay stubs, and adding their names to the credit cards of accomplices with excellent credit in order to increase credit scores.

There are countless variations of real estate and mortgage fraud scams, and they all pose a serious threat to the functioning and integrity of the real estate industry as a whole, as well as to individuals who are honest buyers, sellers, and investors.

If you or someone you know has been victimized by a fraudulent real estate scheme, you should contact the FBI and/or the HUD Inspector General.

Although the market value of a property is largely determined by the comparison between similar properties in a given area, the value of a home is, in the long run, determined only by what a buyer is willing to pay.

This means that, if a seller asks $300,000 for his/her home, but the best offer received is for less than that, then the value of the home is actually less then $300,000, regardless of the studies that were done to establish the home’s fair market value at $300,000.

There are a number of factors that can influence a buyer to pay fair market value, location being among the most important of influencing factors.

Good school districts are a powerful influence on market value, and are most likely of greatest importance in considering location relevance.

Convenience to the workplace, shopping, major thoroughfares, public transportation, entertainment districts and recreational facilities offer other location factors that can have an impact upon a property’s desirability, and as a result, market value.

Condition of the home and property is another strong influencing factor in establishing a selling price. Size of the home and lot, as well as upgrades and amenities are still more influencing factors.

Interest rates, time of the year, high or low inventories of available homes, number of distressed properties in a given area, specific neighborhood conditions, proximity to beaches or mountain areas, proximity to industrial areas, high or low crime areas; any or all of these factors will positively or negatively affect home values

Certainly, it is unlikely that any particular area or neighborhood will meet all of a homebuyer’s criteria, so it is important that the homebuyer look at needs versus wants in location and neighborhood amenities, and consider those options along with affordability; home prices, property taxes, etc.

Real estate agents rate a good location as one with high dollar value and an excellent prospect for substantial appreciation. Buyers have a more complex formula for deciding if a home’s price is suitable and its location is what they are searching for.

A buyer’s real estate agent can be a valuable resource in not only finding the kinds of homes that meet the buyer’s criteria, but can be additionally helpful in obtaining data relative to the neighborhood’s school district, shopping and commuting information, crime statistics, etc.

Since location is so important in so many ways, when the potential buyer finds a property of interest he/she should look over the neighborhood BEFORE making an offer.

Drive around during the daytime and at night, during the week and on a weekend to get a good indication of the noise factor, and overall condition of the neighborhood homes. Look for the number of occupied stores as compared to empty, and check with your real estate agent as to rising or declining neighborhood home values.

It has been a long road in fighting Bank of America (BofA) over the past few years while trying to help Las Vegas homeowners settle their debt through the short sale of their homes. Bank of America steadfastly refused to release almost every seller here in Nevada because of its status as a recourse state, even if it meant that seller would not cooperate. The home would then needlessly become a foreclosure.

I am going into my 3rd straight year of managing the short sale division here for the Sena Team and tried many different tactics in dealing with BofA. There had been rumors that Bank of America was going be more open to releasing deficiencies for some time. I had even seen one of these infamous letters myself, but now, I got to enjoy seeing my own clients’ name at the top of the letter! It was so rewarding to know that we had not only found a willing buyer but also that the seller is being fully release from their loan obligation.

Potential sellers should be aware that Bank of America is not releasing deficiency as a standard policy. The actual holder of your loan (known as the investor) is and who is fighting your battle will go a long way in your deficiency being successfully released.

Las Vegas homeowners should be heartened that by this development and if interested in a short sale, should contact an experienced REALTOR for an assessment of the situation and potential for deficiency release based on who holds their mortgage note. Your agent should have a minimum of of at least 25 closings to their credit. Every short sale is unique and therefore you need a wide variety of short sale experience to contend the vast number of roadblocks that may prevent a successful closing.

Sellers who may be considering a short sale in Nevada may call 702-376-0088.

The current real estate inventory here in Las Vegas has been steadily creeping up over the past 5 months. At present there are 15,063 homes on the market which are not yet under contract. Of those 7,400 are short sales. That is a pretty good sized inventory in itself. Foreclosures make up 3,000 and that number is expected to climb.

This has an effect on sellers who are trying to short sell as properties take longer to get an offer due to the higher competition. Short sales have increased in popularity as an alternative to foreclosure. This is a good thing, but unfortunately, the numbers of buyers in the real estate market have not.

There is good news. Short sale processing times have come down significantly as the government has encouraged short sales and lending institutions have been moving quicker on approvals. The most important information sellers should take away from these trends is not waiting to long to get their home on the market. You can’t assume it will get an offer right away. You may eat up valuable time waiting for an offer and be left with a very short time to get a short sale approval before foreclosure.

Paul Rowe is the managing agent for the short sale division with Team Sena and can be reached at 702.376.0088.

Silverstone Ranch is a master planned golf course community situated on the fairways of the Silverstone Golf Club, a 27 hole championship course.    Construction began in 2003 and has mostly been completed; however, some new homes are still being built by Pulte.  This community is located in the northwest area of Las Vegas near Grand Teton and Buffalo Drive in the foothills of the Sheep Mountain range.

Silverstone Ranch features six different collections of homes including town homes to estates with views of the mountains and city.   The amenities offered to the residents are a swimming pool, six acre family park, playgrounds, basketball and tennis courts, picnic and barbecue areas, walking trails and lush greenbelts.

As of this writing, current resale home prices for the last three months range from around $125,000 to $420,000.  Median selling price is approximately $194,000.  A number of these resales are foreclosures or short sales.

The Princeville Collection at Silverstone Ranch is comprised of single family homes ranging in size from 3,064 to 3,744 sq. ft. selling for $416,990 to $459,990.  These homes, located adjacent to the Silverstone Golf Club, offer 3 to 4 bedrooms and 2.5 to 3.5 baths.

Pinehurst is a gated community built in 2004-2006, adjacent to the Silverstone Golf Club, and offers single and two story townhomes ranging in size from 1,345 to 2,015 sq. ft. with 2 – 4 bedrooms and an attached two car garage.  Some feature an island kitchen, great room, fireplace, covered patio and golf course or mountain views.  Other options include a split floor plan and master bedroom down stairs.

The Palms is a guard gated community comprised of single story and two story homes built in 2004-2009 with some lot sizes up to one third acre.  Home sizes range from approximately 1,900 to 4,050 sq. ft. offering 3 to 5 bedrooms and 2 to 3 car garages.

Some options include golf course or mountain views, wet bar, bonus room, den, fireplace in courtyard and other features.

Silverlake is a gated community of single story homes built in 2004-2006.  Home sizes range from approximately 2,025 to 2,825 sq. ft. featuring 3 to 4 bedrooms and 2 to 3 car garages on lots approximately 7,000 sq. ft to one quarter acre.  Some home options include an island kitchen, great room, courtyard fireplace, golf course view and split floor plan.

A popular amenity is the Silverstone Golf Club which is open to the public as well as community residents, featuring a 34,000 sq. ft. club house with restaurant, valet service, golf school, pro shop and locker rooms.  The club offers a state of the art practice facility with driving range, putting green and short game areas.

The club’s Mountain Course hole #3 is the longest hole in Nevada – a par 5 for 653 yards.   The club does not close in September for overseeding as do other courses in town and is available all year round – weather permitting.

For more information on homes in the Silverstone Ranch master planned community call 702-376-0088.

There are literally zillions of pros and cons that come to mind when discussing whether it is better to be a renter or a home owner, and guess what? There is no right or wrong answer to the question, because each individual’s financial situation and lifestyle preferences are inherently different.

A basic overview of rent versus buy pros and cons can provide guidance, but not answers. The answers can only be found by analyzing these pros and cons within the context of one’s own individual circumstances.

For example, for some people, purchasing a Las Vegas home is out of the question, either temporarily or not ever likely. These persons may have poor credit, low income, have no down payment money and no way to raise money for one reason or another.

On the other hand, there are those renters who are financially stable, have good credit and a healthy bank account, but just don’t want to deal with what they feel are the “hassles” of overall expenses and long-term financial commitment that go hand in hand with home ownership.

Obviously, there are no rights and wrongs here, it just depends on individual circumstances, as well as likes and dislikes.

What are some of the pros and cons of renting or buying?

• Renters have the flexibility to freely change residences without having to sell –once the lease has expired – with moving expenses, first and/or last month’s rent, and a new security deposit constituting the major up-front expenses.
• Renters have limited responsibility for maintenance.
• Renters monthly insurance premiums are much lower than a home owner’s insurance policy.
• Renters can call the landlord to fix a plumbing leak or A/C problem.
• Homes provide a better environment for children.
• Home ownership builds equity over time (when home values are on the rise.)
• Home ownership offers tax benefits (property tax and mortgage interest deductions for example.)
• Fixed rate mortgages offer reasonably stable monthly payments  as opposed to  annual increases in rental costs.
• Many retirees have paid off their mortgages and are now only responsible for property taxes.
• Renters are never free of monthly payments to the landlord.
• Home ownership offers more privacy and the option of decorating in any way you may choose.
• A mortgage can be considered a “forced savings” in some ways due to the equity build up in the property as the mortgage is paid down. That definition is open to argument, and there is not enough space to cover that subject here.
• Home improvements can increase the value of your investment. Improvements to an apartment can only be made with the landlord’s permission, and would only benefit the renter aesthetically.

So, as you can see, owning or renting is a judgment call if you have the option to buy or not, and if you don’t qualify to buy then there are no options.

If you have any questions about buying or renting a home in Las Vegas, feel free to give us a call at 702.376.0088.