Wednesday, July 02, 2008

100% Financing for Las Vegas Homes

The Nehemiah program explained courtesy of Adam Kearney, your local Las Vegas mortgage lender and guest blogger.

With the crash of the subprime market, all the conventional 100% financing options disappeared overnight, leaving many borrowers who were already in escrow scrambling to find a way to complete the purchase of their Las Vegas homes. While investors were pretty much out of luck unless they had money for a down payment, primary home buyers were given a reprieve due to an FHA program which has been revived.

The FHA Nehemiah program is a great way to get 100% financing at a great rate. The seller can contribute 3% to the down payment assistance as well as up to 6% towards closing costs.

There are several different options to the Nehemiah program. One very popular option is the 2/1 buydown. This option gives you a start rate of 2% below your "fully indexed" rate. What is a "fully indexed rate?" That is the maximum rate that will be charged during the life of the loan.

For example, if you choose to do a 2/1 buydown, part of your closing costs are going toward "buying down" the interest rate during the first two years of the loan, allowing you to qualify for more home now. This is based on the premise that your income will go up as the payment goes up. If your fully indexed (maximum) rate was 6.5% for thirty years, your rate for the first year would be 4.5%. This 4.5% would only be fixed for the first year . Beginning year two the rate would move to 5.5% and stay fixed for all of year two. On year three you would reach your fully indexed rate of 6.5% and your rate would remain fixed at 6.5% for the remaining 27 years.

Just to give you an example of what your payments would be on this loan program, let's say you need a $300,000 mortgage. Your Principal and Interest payment at 4.5% would be $1,475.00 during year one. During year two your Principal and Interest payment would be $1656.00 at 5.5%. The third year your Principal and Interest payment would adjust at 6.5%to $1847.15 and this payment would stay the same for the remaining 27 years of your mortgage.

The Nehemiah program is a government backed loan and works well in a buyer's market like today, even if you are looking at Las Vegas foreclosures that are bank owned. It is one of the only 100% financing options available to date.

If you have any questions regarding this program, please contact me at the 702-528-3775 or to prequalify, fill out a loan application at: Las Vegas loan application.

Adam Kearney