Is now the right time to buy a house in Las Vegas? Here’s tips on getting a mortgage

With interest rates the highest they’ve been in decades, and a housing market pinched for supply, buying a home right now is probably scarier than ever. However if you are still thinking of taking the plunge, there are some things a local mortgage broker and Realtors want you to take into consideration before inking a long-term financial deal.

Assess your ‘hopes and dreams’

The first thing to do is assess your “hopes and dreams,” said Matt Hennessy, a Las Vegas-based certified mortgage advisor who was ranked in the top 1 percent of mortgage professionals in the U.S. by Mortgage Executive Magazine.

“The objective in initially reaching out to a mortgage advisor should not be based entirely on getting pre-approved to purchase a property, but rather to discuss their current and future real estate goals,” he said. “The pre-purchase consultation will help them discover whether they should or should not purchase a home at that time by taking into account their comfort level for a desired total monthly payment based on their indicated cash-to-close amounts.”

He added this is the time a prospective buyer should “share any concerns they have about the current real estate market and what might keep them up at night about the home-buying process.”

What’s your long-term strategy?

Hennessy explained finding the right mortgage rate isn’t always about finding the lowest possible number, but the right rate with the right long-term strategy.

“There is a tradeoff,” he said. “Would they like a lower interest rate and monthly payment with higher costs or would they prefer lower out-of-pocket costs with a higher interest rate and payment? If this is not properly illustrated they can miss out on a better loan program or strategy.”

Understand the local economics

Tim Kelly Kiernan, a broker and branch manager for Realty One Group, said it is important to understand the macro world we live in, and where the state sits in terms of overall cost of living and tax rates. This all plays into how one should look at financing a mortgage, making sure they’re not getting caught up in national headlines or stories about other states with different financial parameters.

“Here in Nevada we are a no-income-tax state and that appeals to many new residents and buyers coming from other states,” he said. “In addition, we also have some of the lowest property taxes rates which is why buying a home in Las Vegas makes perfect sense for many potential homeowners. I relocated from New Jersey where the property tax rate is more than double what we have here in Nevada. Property tax rates vary from 2.3 percent to 3.4 percent per $100 of assessed value.”

Understand your financial situation

Figuring out one’s own financial situation is also crucial, Hennessy said.

It’s important to note that getting “pre-qualified” to purchase a home is not the same as being “pre-approved” and you should talk to your mortgage broker specifically about this point, he said. This is also the time to dive into your own financial history and make sure you are in a good spot to make what is usually the largest purchase of anyone’s life.

“Having your credit report analyzed early in the process can save you money,” Hennessy said. “Typically once a credit report is accessed by a mortgage company it is valid for 120 days. A mortgage advisor should take the time upfront to provide guidance on specific ways to optimize their FICO scores (credit score) in order to obtain the best terms. This can be as simple as paying their credit card balances down or more complex advice on the removal of derogatory items if necessary. A FICO score not only impacts the interest rate and cost of the loan but also plays an important role in the cost of PMI (private mortgage insurance) if required. A FICO score may also impact the home insurance premium they pay.”

Use a local lender

Amy Allen, a real estate agent with Leading Las Vegas Realty, who has been licensed for five years and has sold more than 125 homes, said it’s always best to match a local Realtor with a lender they have worked with in the past and trust.

“Selecting a local lender simplifies the process, as a reputable Realtor will typically have a list of trusted lenders with whom they have worked successfully,” Allen said. “This collaboration eliminates uncertainty and provides clear guidance on the qualification requirements. Many lenders offer sophisticated tools, such as simulators, to analyze your credit and advise on potential improvements, giving you precise insights into what is needed to enhance your credit score.”

Contact Patrick Blennerhassett at pblennerhassett@reviewjournal.com.