First Time Home Buyers in Las Vegas: Q & A
Buying your first home in Las Vegas can appear to be an overwhelming endeavor at first glance. Loan applications, home inspections, title companies and unfamiliar jargon are often daunting to the first time home buyer. This is why it’s so important to work with a buyer’s agent who can help address the many moving parts of a transaction and expedite the process seamlessly. Let’s explore a basic overview of this process.
What type of loan is best?
A fixed rate mortgage is exactly what it sounds like, the interest rate will remain unchanged over the life of the loan. Regardless of what happens to interest rates over the years, your rate will remain the same. Obviously this is the most appealing choice for home buyers in Las Vegas, because they know what their payment will be every month. Financial planning is much easier with a fixed rate mortgage. For those looking to stay in their home for a long time, this generally makes the most sense.
Fixed rate loans are 15-30 years in length. While the 15 year rates are at a lower rate, the payments are higher. Although the flip side is the home gets paid off earlier and you pay much less interest over the life of the loan. I'm partial to the 15 year loan for these reasons. I'd rather cut back on something else each month in order to pay off my home quicker and for less cost.
Adjustable-rate mortgages, or ARMs, are also pretty straight forward. The rate you pay to borrow money, changes based on fluctuations in the market. Interest rates are usually lower for these loans because the borrower is assuming more of the risk. In terms of payments, ARMs can work both ways. In other words, if interest rates go down, then your monthly payment would drop. But the opposite is also true, which means an increase in interest rates could send your payment higher than a traditional fixed rate loan. This is not something that could happen overnight, as interest rates shift more gradually over time. But you could end up with an entirely different mortgage payment two years down the road. If you’re on a strict budget, this would not be a good option of you.
How important is a home inspection?
During the housing boom, people often waived home inspections. They felt that the less contingencies, the better chance they had of getting the home. Although that may have seemed like a good idea at the time, I certainly would never have advocated such a thing. The last time I checked, 350 dollars for an inspection was a lot less than $200,000 (our current median price for Las Vegas) for a home that was falling apart. The money spent for an inspection is worth every penny in my opinion. Have an experienced Las Vegas home inspector check out the heating, plumbing, electrical, roof and foundation before you buy your home.
What should I expect on closing day?
Generally you should expect two things: Final walk through and closing at the title company.
A final walk through is a common part of all residential real estate contracts in Las Vegas. It stipulates that on the day of close, the buyers may walk through the home to ensure the property has remained in good condition and that any requested repairs have been made. This is not a lengthy inspection; however buyers should carefully look through the home to make sure everything is the same as when they originally viewed the proeprty. In addition, be sure to bring a copy of the sales agreement and a checklist of items that are of particular interest.
In very simple terms, the settlement is when title is transferred from the seller to the buyer. This is usually performed at a title company.
The title company is a neutral third party that will order the title searches to ensure there are no liens or encumbrance on the property prior to close. The closing usually takes an hour and may include several people. The seller and buyer, with their brokers, a title agent and possibly attorneys, may all be present. This is when you'd bring your money to the table (certified check) for down payment, home owners insurance, HOA dues, closing costs and any other possible fees.
Finally
These are just some of the issues, for first time home buyers to tackle. An experienced buyer’s agent in Las Vegas can help keep things running efficiently, while protecting your interests at the same time.