2010. It's finally here. Let's hope that it's better than 2009 or at least as good. New Year's resolutions are always tossed about at the beginning of the year. I read an article that said that 95% of the resolutions that we make, we never achieve during the year. Here are a few financial resolutions that we all should make:
- 1) Credit card debt. Eliminate it! It is a financial hole you will never get out of without some help. At least put a plan together to climb out of the hole and stop buying things that you cannot afford.
- 2) Home mortgage. If you haven't refinanced in the last two years and you have an adjustable rate mortgage, get to it. We may not see rates this low for quite some time.
- 3) Your estate. Take some time to go over your will, trust, or entire estate plan. Death is inevitable. Let's make sure we've covered our bases here. Statistics tell us that 70% of you don't even have a will. Get going!
- 4) Retirement. Yes, even those of you in your 20's and 30's will have to look the grey-haired monster in the eyes at some time. Put a long or short-term plan together depending on your age. You may need some outside help here, so don't be afraid to seek it. You will retire someday; make it as comfortable as possible.
There they are. Resolutions. Let's follow through this time. Happy New Year!
Today I am interviewing Lisa Grover, Vice President of Consumer / Residential Mortgage Lending here at the bank, about interest rates and home mortgages.
- 1) Lisa, what do you do at the bank?
I am responsible for loan production at the bank. We have really focused on Home Lending with interest rates being so low. However, there have been so many changes in the industry lately.
- 2) How have things changed in the past year?
Probably the most challenging change is HOW to quote an interest rate to a customer. Today, the rate you get on a mortgage loan depends on many things, such as your credit score, the amount you are borrowing compared to the value of your home (Loan to Value), the amount of down payment on a purchase, or whether or not you want to get "cash out" if you are refinancing.
- 3) Some of the people in our listening area may be thinking about buying a new house. What do they need to do?
Go to your bank and get Pre-Approved for your loan.
- 4) How does a person get pre-approved for a loan?
All you need to do is call your Loan Originator (names and numbers below) and make an appointment to meet with him or her and they will let you know how much money you need to buy a home, how much you can afford, what your payments will be, what your credit score is, etc. Typically you will need to bring some verifying information with you such as: 2 most recent paycheck stubs, 2 most recent bank statements, and a list of your debts and retirement accounts. If you are self employed, 2 years full tax returns. FIRST NATIONAL BANK DOES THESE PRE-APPROVALS FREE OF CHARGE!
- 5) What about refinancing? When is it the right time to refinance?
When to refinance can depend on many things. Your current rate, the amount of your loan, and the remaining term of your loan.Typically, because closing costs are so reasonable now, you should contact your Loan Officer to discuss refinancing if you can decrease your rate by 0.75% to 1%.This decrease will save you enough money monthly to justify the cost of refinancing or if you choose not to reduce your payment, can decrease the life of your loan significantly, which save you thousands of dollars in interest.
For more information, please check out our website at http://www.bankatfirstnational.com/, or call our toll free number 1-800-667-4401.
Lisa Grover 608-363-8034
Toni Ingle 608-313-8394
Lisa Moore 608-313-8395
Heather Nieves 815-624-1270
Ann Jordan 815-624-5983
Sharon Phillips 608-328-5130
Donald Freund 262-882-5580
Mortgage rates are down! The stimulus package offers up to an $8,000 tax credit to first-time homebuyers. Low rates make refinancing or buying a new home more appealing, but what does it take to get a loan these days?
Credit scores now play a huge role in mortgage rates. You probably need a credit score of 680 to get approved, but with that, you may not get the best rate. A credit score of 740 is the new benchmark for the lowest possible rates combined with an 80% loan to value ratio for refinancing or at least a 5 to 10 percent down payment for first time mortgage financing.
Lenders make adjustments to an individual's interest rate based on their credit score and loan to value ratio. Private mortgage insurance companies can have their own, even stricter guidelines which will affect what you can borrow or what you can purchase. For example, mortgage insurance companies in Illinois have declared Winnebago County a restricted market. That means starting in March, 10% down will be a must for homebuyers.
So what alternatives are there for less-qualified borrowers? Mortgages insured by the Federal Housing Administration offer easier qualification standards. Also credit unions and community banks can be resources. Though they typically sell mortgages to Fannie and Freddie and must meet their guidelines, they also keep loans on their books. That means they have more freedom in deciding whether to take on greater risk even as they practice their typically conservative due diligence.