ON THE TRAIL OF FUTURE LAS VEGAS HOME LOAN INTEREST RATES
A few weeks ago, two pieces of incoming information crossed my screen—items that related to the possible direction in which Las Vegas home loan interest rates might be heading. The first came from a big national listing aggregator. It seems that once this outfit gets the idea that you are interested in homes in Las Vegas, they conclude that it’s your wish to establish an ongoing relationship. They then display all the energy and persistence a large corporation can muster to share their meditations about this and that. They will continue to email you with regularity until you call a halt. Along with other communications, they sometimes send attention-grabbing questions to everybody on their list—then share the answers from the “community” (that is, everyone who hasn’t begged off yet). Last week’s question was, “Is it better to buy a house right now or wait until 2017?” Since Las Vegas’s current home loan interest rates are one of the prime reasons today’s market is so affordable, the posted responses would surely be relevant. Some were confused (“When interest rates rise, this puts pressure on affordability, which then slows rising house prices…then is the best time to buy”). This commenter apparently hadn’t taken into account the fact that higher home loan interest rates mean higher mortgage payments—definitely not a more attractive time to buy. A crank in Upstate New York complained that houses around those parts were too spooky and expensive (“housing and all these old, some hunted houses costs easily over 500K”). Other answers were more philosophical (“it is ALWAYS a personal matter whenever a large purchase is contemplated”). Some claimed dubious expertise (“BUY NOW>>>NEXT YEAR THE PRICE WILL BE GOING EVEN HIRE”). Others were observant (“You should go to grammar school and get some spelling lessons. Seriously”). All in all most did subscribe to the majority view that low home loan interest rates make the current environment genuinely inviting. One writer was defiantly emphatic (“Buy now; waiting for costs you more for interest rate and purchase price”). Answers like that (there were lots of them) made the second source of home loan interest rate news all the more relevant. It came from a source that should supply the most reliable clues to the future direction of rates: the financial press. Unfortunately, after reading many different takes on the breaking news, clarity was in even shorter supply. The breaking news was the unsealing of notes from the Fed Governors’ discussion in March about this month’s possible interest-rate hike…or non-hike. As Bloomberg summarized, the takeaway from the minutes of the FOMC’s meeting had “…several officials leaning against such a move because it would send the wrong signal and others saying it might be warranted.” If this sounds like a muddy kind of clarification, even that’s too definite: “The debate, by flagging a potential April rate increase that’s nevertheless unlikely…shows the FOMC is prepared to move in a meeting, if necessary…” Or perhaps not. If Bloomberg is right that a rate hike IS unlikely, that would mean continued low home loan interest rates and smooth sailing for our Las Vegas’s residential market. And another good reason to give me a call. Come to think of it, if the opposite happens, it’s also a good reason!
LAS VEGAS ACCIDENTAL INVESTORS A POORLY NAMED GROUP
Las Vegas real estate investors include a subset that’s more common than you might think: the unplanned ones. The press calls them “accidental investors”—but that’s unfortunate. Let’s face it: when you read “accidental investor,” it conjures up mental images of a car crash. Or falling down stairs. Or failing to smell a gas leak… The phrase is inappropriate. When you think of accidents waiting to happen, the last thing you think of is Las Vegas real estate. Yet the phrase “accidental real estate investors” continues to pop up to describe individuals made property owners through happenstance—even though that turn of fate does, in fact, turn out to be beneficial. More than anything, that’s a happy accident! Accidental real estate investors can be created because of any number of common situations. Sometimes, inheritance plays a role. If a family home is willed to children whose careers have taken them far from Las Vegas, time may need to pass before a clear-headed decision is best made about the disposition of the property. Perhaps the accidental investor will ultimately choose to sell. In that case, because distance can cause a special complication, it’s important she or he team with a REALTOR® who knows how important prioritizing communication can be. In some cases, the “accident” involves a sudden promotion or other unanticipated life change calls a homeowner away from Las Vegas for an extended stretch of time. Whether or not it’s clear that the owner will return, the best course of action could be to become an accidental landlord. That’s eminently doable when there are reliable property management professionals in the Las Vegas—and our Las Vegas is fortunate in that regard. From rehabbing, painting, and renovating to screening potential tenants and handling emergency calls 24/7, I can help assure that potential landlords—accidental or not—have access to professional property management services that not only remove the burdens of remote ownership but provide consultation services aimed at improving the ROI of ownership. Las Vegas’s accidental real estate investors would better be described as fateful, or fortuitous, or even providential real estate investors—but that’s not going to happen any time soon. What might happen any time at all is your own decision to join the prosperous ranks of the Las Vegas’s intentional real estate investors. A deliberate, premeditated first step is to give me a call to check out the inviting possibilities that are out there this spring. They’re waiting, right now!
LAS VEGAS HOME LOAN APPLICANTS AND THE IDEAL CREDIT SCORE
Something is being offered that is actually for free. No, really. It is truly the case that lately some banks and credit card companies have been including a new benefit for their Las Vegas clients: free access to their current FICO credit score. This isn’t the same thing as the ads we’ve been deluged with for years—the ones for “free” credit reports. Most of those wound up not really being completely free—at least not if you value your privacy (as in your email and other personal information). Most of them were bent on pitching you on surprisingly pricey subscription credit monitoring services. For anyone who placed value on the time it took to tell them “no” a half-dozen ways, these weren’t really “free.” But if you are a lucky Las Vegas client of one of the outfits now providing continuous access to your FICO credit score, it IS interesting to click on it now and again. The score goes down and (we hope) up as various information flows into the FICO computers. “FICO” is shorthand for the Fair Isaac Corporation, which is by far the dominant credit rating creator. But don’t be fooled: not all FICO credit scores are the same because there are three different companies (Equifax, TransUnion and Experian) who collect the data. They pay FICO to furnish their branded versions of the scores. Each one has FICO assign different weights to different parts of your history—and the result is to create three different FICO scores. That’s why when you read a headline like Tulia’s “Magic Number: The Ideal Credit Score For Securing A Mortgage,” you’re right to be a bit skeptical, since an “ideal” credit score for Equifax and TransUnion and Experian would be unlikely to be the same. Nonetheless, the number given as “ideal” was probably pretty much about the best rule of thumb number you could realistically come up with: 740. If 740 or higher is the ideal FICO number (considered to be in the ‘perfect’ range for mortgages), another (sort of) (mostly) correct number for Las Vegas mortgage applicants was 660—which they thought was a credit score that would “land a better rate and avoid jumping through additional hoops” than would 620—the basic requirement “for most lenders” looking to originate a conventional home loan. The “most lenders” qualification, along with the differences in the credit scores offered by the different companies, means that there is a lot of wiggle room that can affect not just whether or not an applicant is successful in being offered a loan for their new Las Vegas home, but what the terms of the mortgage will be. Given all that, it’s really impossible to take any one credit score number and say definitely what that will mean to your loan originator. Who doesn’t appreciate being given free access to their FICO score—even if you aren’t quite certain what the rises and falls are going to mean? The only time you actually get a real-world answer to that is when you are ready to buy a home and submit your application. That’s another time I’m here to help!
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