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Mary Kennedy's Blog from Las Vegas

"Helping YOU Find Your Way Home in the Las Vegas Valley"

By Mary Kennedy | Agent in 89135
  • 15 & 30 Conforming, Doctor, Construction & Jumbo ARM Mortgage Products

    Posted Under: Financing in Las Vegas, Property Q&A in Las Vegas, Credit Score in Las Vegas  |  August 9, 2014 1:00 PM  |  104 views  |  No comments

    Freddie Mac chief economist, Frank Nothaft, says that
    affordability, stability and flexibility are
     the three reasons homebuyers overwhelmingly choose a 30 year term.  However, for those who can afford a higher payment, there are three additional reasons to choose a 15 year term: save interest, build equity and retire the debt sooner.

    First-time buyers have a higher tendency to use a minimum and are very concerned with affordable payments.  It is understandable that the majority of these buyers select 30 year, fixed-rate mortgages.

    Consider a $200,000 mortgage at 30 year and 15 year terms with recent mortgage rates atand 3.31% respectively. The payment is $433.15 less on the 30 year term but the interest rate being charged is higher.  The total interest paid by the borrower if each of the loans was retired would be almost three times more for the 30
    year term.
     

    Another interesting thing about the 15 years mortgage is that more of the payment is going to principal than interest from the very first payment.  It would take over 13 years on the 30 year mortgage for the Freddie Mac chief economist, Frank Nothaft, says that affordability, stability and flexibility are the three reasons homebuyers overwhelmingly choose a 30 year term.  However, for those who can afford a higher payment, there are three additional reasons to choose a 15 year term: save interest, build equity and retire the debt
    sooner.

    First-time buyers have a higher tendency to use a minimum down payment and are very concerned with affordable payments.  It is understandable that the majority of these buyers select 30 year, fixed-rate mortgages.

    Some people might suggest getting a 30 year loan and making the payments as if they were on a 15 year loan.  That would certainly accelerate amortization and save interest. The real challenge is the discipline to actually make the payments on a consistent basis if you don’t have to.  Many experts cite that one of the benefits of homeownership is a forced savings that occurs due to the amortization that is not necessarily done by renters.

    For more information on Loan Products for your New Home, print out this Product Matrix and give Mardell Wylie a call at Talmar Bank & Trust. She will expalin your best options and get you Prequalified.

  • Indecision Not The Wrong Decision Could Cost You! Let's Take a Closer Look

    Posted Under: Home Buying in Las Vegas, Financing in Las Vegas, Rent vs Buy in Las Vegas  |  July 22, 2014 9:45 AM  |  164 views  |  No comments

    More money has been lost to indecision than
    was ever lost to making the wrong
     decision.

    The economy and the housing market have caused some people to take a “wait and see” position that could cost them in lost opportunities as well as almost certain higher costs in the future.

    To illustrate what the opportunity cost might be, let’s compare what the value of the down payment two years from now would be if it was invested in a certificate of deposit, the stock market or used to purchase a home today.

    A 3.5% down payment on a $175,000 home is $6,125.00.  If it was invested in a CD that would earn 2%, a person would have $6,372 in two years.  The earnings would be taxed as ordinary income tax rates.  It wouldn't earn much but it would be safe and secure.

    The same amount would grow to $7,013 in the stock market if you picked the right stock or fund and it yielded 7%. The earnings would be taxed at the long term capital gains rate.  The return could be greater but so is the risk involved.

    If this person were to purchase a home today that appreciated 2% in value over the next two years, the equity in the home would grow to $18,769 due to value going up and the unpaid balance going down.

    The question, we all must ask ourselves is “where should our money be invested?”  Try Your Best Investment to see the difference it will make based on your price range, down payment and earning rate.

     

  • Here's Another Down Payment Option for a Home

    Posted Under: Home Buying in Las Vegas, Financing in Las Vegas, Rent vs Buy in Las Vegas  |  June 2, 2014 7:44 AM  |  389 views  |  No comments

    Most taxpayers know that they will pay a 10%
    penalty if they withdraw funds from their IRA before they turn 59.5 years old.  There is an exception for first-time home buyers that allows a penalty-free withdrawal of up to $10,000 per person if they haven’t owned a home in the previous two years.

    This would allow a married couple who each have an IRA to withdraw a lifetime maximum of $10,000 each, penalty-free for a home purchase.

    In many cases, the money would be used for a down payment or closing costs.   However, some buyers might consider this source to increase their down payment so they could qualify for a loan without mortgage insurance.

    If the taxpayer qualifies for the penalty-free withdrawal, there may still be taxes due.  Contributions to traditional IRAs are made with before-tax dollars and the tax is paid when the funds are withdrawn.  Since Roth IRAs are made with after-tax dollars, there is no tax due when the funds are withdrawn.

    Another interesting fact about this provision is that the taxpayer making the withdrawal can help a qualified relative which includes children, grandchildren, parents and grandparents.

    When considering using IRA funds for a home purchase should get expert advice from their tax professional concerning their individual situation.

  • It May Be Time to Come in From the Cold if You've Had a Bankruptcy, Foreclosure or had to Short Sell Your Home.

    Posted Under: Home Buying in Las Vegas, Financing in Las Vegas, Foreclosure in Las Vegas  |  May 18, 2014 9:52 AM  |  330 views  |  No comments

    Going through a Bankruptcy or Foreclosure can be one of the most stressful times in a homeowners life, leaving you numb and feeling defeated.

    I'm writing this blogpost today to invite you in from to cold to begin your fight to home-ownership again. That's Right! You don't have to rent for the rest of your life. You may be able to own a home again if you have had a good credit history for 12 months after a credit event directly tied to the bad economy.

    Let's review the Seasoning Requirements for Borrowers (As of Today!) that have been through a Bankruptcy, Foreclosure or have had to Short Sell Your Home.

    If you've been through a Chapter 7 Bankruptcy

    The waiting period before applying for a new loan is 
    • 2 Years for FHA
    • 2 Years for VA Loans up $699,900
    • 4 Years for VA Loans from $700,000 to $1.5 Million
    • 4 Years for Conventional Loans
    • A buyer with more than 1 bankruptcy filing in the last 7 years will have to wait 5 years.
    A 2 to 4 Year waiting period is required, and is measured from the discharge date or dismissal date of the bankruptcy. A 2 year waiting period is permitted if your extenuating circumstances can be documented.

    If you've been through a Chapter 13 Bankruptcy

    The waiting period before applying for a new loan is 
    • 2 Years for FHA
    • 2 Years for VA Loans up $699,900
    • 4 Years for VA Loans from $700,000 to $1.5 Million
    • 7 Years for Conventional Loans
    • A buyer with more than 1 bankruptcy filing in the last 7 years will have to wait 5 years.
    A 4 Year waiting period is required for a Chapter 13 dismissal date of the bankruptcy. A 2 year waiting period is permitted if your extenuating circumstances can be documented.

    If you've been through a Foreclosure

    The waiting period before applying for a new loan is 
    • 3 Years for FHA
    • 2 Years for VA Loans up $699,900
    • 4 Years for VA Loans from $700,000 to $1.5 Million
    • 7 years for Conventional Loans.
    For Conventional Loans, a 7 year waiting period is required, and is measured from the completion date of the foreclosure. A 3 year waiting period is permitted  if your extenuating circumstances can be documented and the equation (Loan to Value) rules are applied and you are purchasing a principal residence.

    If you had to Short Sell Your Home

    The waiting period before applying for a new loan is 
    • 3 Years for FHA
    • 2 Years for VA Loans up $699,900
    • 4 Years for VA Loans from $700,000 to $1.5 Million
    • For Conventional Loans, 2 Years if the Subject Loan is 80% LTV, 4 Years if Subject Loan is 90% LTV or Less and 7 Years if Subject Loan is over 90% LTV
    A big piece to this equation is your Extenuating Circumstances which is non-recurring events that are beyond your control that result in a sudden, significant and prolonged reduction in income or a catastrophic increase in financial obligations.

    For the consumer, some of what your read above can be hard to understand and create that stressful churn in your stomach again... So I know reputable people that can help you translate all this into answers that you can understand... Better than that! It costs you nothing and if not now, it could be the beginning of a future plan to build stability back into your life.

    Contact me today at 702-324-5390 or Click to Contact Me and we'll get you the help that you need to get back on track.

    Mary Kennedy
    RE/MAX Central
    Las Vegas, NV.
  • A Lower Payment is Now Your Choice!

    Posted Under: Home Buying in Las Vegas, Financing in Las Vegas, Home Ownership in Las Vegas  |  April 24, 2014 9:41 AM  |  494 views  |  No comments

    94% of purchasers last year opted for a fixed-rate
    mortgage at some of the lowest rates in home buying history.  Yet, some of them will pay more in interest than necessary based on the time they’ll own the home.

    If a person only plans to be in the home a few years, the adjustable-rate can offer significant savings.

    Not only is the interest rate on the adjustable-rate lower than the fixed in the initial period, amortization on a lower interest rate amortizes faster than a higher interest rate.

    In the example shown below, a $200,000 mortgage for 30 years is compared using a 4.25% fixed-rate to a 3.25% 5/1 FHA adjustable rate.  The first five years of the ARM generates a $113.47 a month savings which accumulates to $6,808.20.  In addition, due to faster amortization on lower interest rate loans, the unpaid balance at the end of five years will be $3,001 lower on the ARM for a total savings of $9,801.

    Assuming the adjustable-rate mortgage was to escalate the maximum allowed at each period, the breakeven would occur in 8 years and 6 months. If a person were to sell the home prior to this point, the ARM would provide a lower cost of housing for the homeowner.

    For some people, the uncertainty of how the interest rate may change is not acceptable.  On the other hand, for the risk tolerant individual who may be more confident in financial matters or who may know when they’ll be moving next, the ARM can be a smart choice.

    To make projections using your individual numbers, see the Adjustable Rate Comparison.


    If you have anymore questions, feel FREE to contact me at anytime and I'll put you in touch with one of my outstanding Mortgage Brokers to find the best solution for you.

    Mary
  • Is the Window Closing in the Las Vegas Valley? No Way! But Let's Look At the Numbers!

    Posted Under: Home Buying in Las Vegas, Financing in Las Vegas, Rent vs Buy in Las Vegas  |  April 10, 2014 10:45 AM  |  564 views  |  No comments

    With interest rates lower than they’ve been in over
    40 years, it may be difficult to think of a
     “window of opportunity” closing.  However, it isn’t difficult to understand that it may very probably cost more to live in a home in the near future due to rising interest rates and prices.

    Zillow recently reported results from a nationwide study that home values are expected to appreciate by 4.5% through the end of the year.  Coupled with Freddie Mac’s projection that rates are going up, the cost of housing for buyers by the end of the year will be higher than it is now.

    While uncertainty of the future can stagnate some people, the fear of loss can be much more devastating when a person realizes that the amount they pay to live and enjoy a home could have been considerably lower had they acted when prices and mortgage rates were lower.

    The following example considers a $250,000 purchase today with a FHA mortgage compared to what it might be at the end of the year with a higher price and interest rate as discussed earlier.  The net effect is that it will cost $191.87 to live in the very same home based on the cost of waiting to buy.

    To see what the cost might be for your price range, use this Cost of Waiting to Buy spreadsheet.


  • Senator Harry Reid Answered Me Back About Extending the Mortgage Debt Forgiveness Act thru 2014

    Posted Under: Market Conditions in Las Vegas, Financing in Las Vegas, Foreclosure in Las Vegas  |  February 6, 2014 5:16 PM  |  791 views  |  No comments

    A couple of weeks back, I wrote and email to Senator Harry Reid, encouraging him and his fellow lawmakers to extend the Mortgage Debt Forgiveness Act through 2014. I have inserted the copy from his response below with some additional comments:



    Mrs. Mary Kennedy

    10257 Independent Laterina Ct
    Las Vegas, NV 89135-2527

    Dear Mrs. Kennedy:

    Thank you for contacting me regarding extending the tax relief for the discharge of debt associated with a person’s principal residence. I appreciate hearing from you on this matter.

    I have always been a supporter of the Mortgage Debt Forgiveness Act and worked hard to get it extended through last year. During the final weeks of the 112th Congress, leaders in both parties worked together to avoid the so-called “fiscal cliff” of drastic spending cuts and tax hikes.

    The negotiations were long and difficult, but in the end, the compromise provided certainty to taxpayers and businesses. The American Taxpayer Relief Act of 2012, which President Obama signed into law on January 2, 2013, prevented tax increases on 98 percent of Americans and 97 percent of small businesses by permanently extending the middle-class tax cuts. Additionally, this bipartisan legislation extended the mortgage debt forgiveness relief through December 31, 2013.

    This tax relief was initially enacted for two years as part of the Mortgage Forgiveness Debt Relief Act of 2007, and offers relief to homeowners who would otherwise have owed taxes on forgiven debt. This change generally allows taxpayers to exclude income from the discharge of debt on their principle residence.

    Without this change, debt reduced through mortgage restructuring and debt forgiven after a foreclosure or short sale would have been treated as income and been subject to income tax. The Mortgage Forgiveness Debt Relief Act, which was extended by the Emergency Economic Stabilization Act of 2008, also created a temporary exception for debt forgiveness discharged between January 1, 2007 and December 31, 2012. I am proud to have supported these efforts to provide meaningful relief in the housing market.

    As you know, this important mortgage debt forgiveness relief expired at the end of 2013. Congress is currently considering several bills that could extend this provision.  The Senate Finance Committee has jurisdiction on taxes and is exploring various tax proposals, including debt relief for distressed homeowners who cannot afford more in taxes.  Should mortgage debt relief be included in any bills before the full Senate, I will be sure to keep your thoughts in mind.

    Again, thank you for taking the time to share your thoughts with me.I  look forward to hearing from you in the near future.

    My best wishes to you.

    Sincerely,

    HARRY REID
    United States Senator

    HR:BK

    To learn more about my work in the Senate on behalf of Nevadans, or to contact me, please visit reid.senate.gov, sign up for my e-newsletter, The Reid Report, or connect with me on Facebook and Twitter.
     
     Additional Comments:

    1. You may ask: Why am I for extending the law? At the beginning of 2013, 65% of Las Vegas Valley homes with mortgages were underwater. That means that if a seller wanted to put their home on the market, the value was less than what was owed on it. At the end of 2013, only 35% of the homes were still underwater.

    2. By extending the law through 2013, it helped the values of the homes come back as underwater homeowners could short-sell their homes and not have to pay income tax on difference between what was owed and what the home sold for. Extending the law did 4 things:
    1. It helped stabilize a Housing Market where home values dropped 45% back 2007 and 2008.
    2. Because the market dropped into such a deep depression, we were able to increase values by bounce back by 29% in 2013. Now that may sound like alot, but there are very few Real Estate Markets that took a hit like the Las Vegas Valley did.
    3. Extending the law also helped the home values for the homeowners that have no mortgage. As the market made it's way back, the values improved for all of the homes.
    4. Speeding up the Loan Modification and Short Sale process helped to flush the bad mortgages at an accelerated pace. In the long run that with stabilize the National Housing market sooner.
    As an Independent Voter I have been frustrated with both sides of the isle in Washington. Irresponsible decisions were made by consumers as well as some of the politicians. The National Housing Market is an important part of our economy that very few in Washington want to talk about. I encourage you to write your representatives, especially those on the Senate Finance Committee, to strongly encourage the extension of the Mortgage Debt Forgiveness Act through 2014.
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