9 Dos and Don’ts For Avoiding Common Mortgage Mistakes

The mortgage procedure can be confusing, with numerous twists and turns to guide. But it doesn’t require to be rough. It doesn’t matter whether you are just starting to think about purchasing a new home or actively exploring; you have to understand the mortgage in Stillwater.

Dos For Avoiding Common Mortgage Mistakes

❖    Do have your finances in order

Ensure your documentation is complete and accurate to give your loan team everything they need to help you. Paperwork alters based on your mortgage lender but typically contains:

• Loan application
• Debts and assets documentation: bank statements, credit reports, investment accounts.
• Financial proof documents include W2s, tax returns, pay stubs, alimony, and child support documents.

❖    Do respond as fast as possible

Try to be as responsive as potential when working with your loan team. Your team will be better able to keep moving forward and close your loan quickly if you can respond within 24 hours.

❖    Keep your current employment throughout the loan process

If you want to make a job change, wait to move on to your next gig until after your loan has closed. Your work, and the income it brings, play a significant role in the mortgage procedure. Moreover, inform your loan team of any changes to your employment promptly.

❖    Do ask questions

It is possibly the most significant of all! Throughout the procedure, your Mortgage loan originator will do their best to make everything clear. However, do not hesitate to ask your team questions if anything is undefined.

Don’ts for Avoiding Common Mortgage Mistakes

• Don’t wait until you find the best house to apply

When you know you’re ready to start looking, apply for pre-qualification instead of when you’re “finished” searching. You will be better set with the seller and avoid possible heartbreak when you are preapproved for the price/type of the house you are examining for. If you don’t go via the preapproval procedure, you’ll be behind and may miss out on that house you fell in love with.

• Don’t give incomplete photos and documents

Time is at the core of the present housing market. Don’t let incomplete documents slow your loan method down. Ensure everything is in order before sending your documents to your loan inventor. Also, ensure you’re providing your loan inventor with the documents they need to finish the procedure. For instance, photos of documents are generally useless.

• Don’t apply for other forms of credit before or shortly after your loan procedure
  
  

Numerous credit inquiries simultaneously could harm your credit score and also the cost. You’ll save thousands of dollars by avoiding credit card inquiries and double-dipping on your mortgage.

• Ignore marketing calls offering mortgage “deals.”

A sad reality of running your credit score is that it triggers a shower of calls from firms looking to sell you a mortgage or steal your information. Don’t allow these calls to shake you.

The points listed above are some of the essential ones to consider when comparing mortgages. But, finding a lender who meets all these factors may be difficult. So, choose the Mortgage in Stillwater, which is best suited to your needs and the business’s financial health. 

Benefits of a Long-Term Mortgage

Many people have a misconception about housing loans, leaving them in doubt about opting for a long-term mortgage in Stillwater/Hudson. Of course, shorter mortgage loans have interest-saving benefits, but long-term mortgages come with many positives that can put your mind to rest from doubts. Even if your income is low, you can approach your bank in Stillwater, Hudson/MN, WI, for a long-term mortgage. You only need a good credit score to apply for it, and you can get them through e-banking in Hudson/Stillwater. Check out some of the benefits of a long-term mortgage here.

Benefits of a Long-Term Mortgage in Hudson/Stillwater

1. Building Equity

People buy a house to build equity. Then, you can liquidate it for wedding or education expenses whenever you need. Getting a long-term mortgage does not lower your equity. Instead, it has minimal effect on the overall equity of your house.

Take an instance:- You buy a house for $400,000 with a $50,000 downpayment. For the rest amount($350,000), you take a long-term mortgage paid in 30 years at 4%. Your downpayment is the initial equity. If your house value grows at 3% per year, your property becomes worth $722,444 after 20 years. Even if you can pay just $200,000 of the initial amount ($350,000), the difference of $572,444 is the overall equity built on your house.

You can easily deduct the remaining loan amount ($150,000) from the total worth of your house and still build equity irrespective of the size of your mortgage in Stillwater/Hudson.

2. Low-Interest Rates

Any bank in Stillwater, MN/ Hudson, WI might offer a 0% interest rate credit card for six months. But after that, the interest rate shoots to 18%, and if you borrow a hundred thousand dollars at such a high rate, it will be impossible to pay back over 30 years.

If you can demonstrate your bank’s ability to repay the loan in the stipulated time (15 or 30 years) with a positive credit score, they might lower the interest rate. Whereas in long-term mortgages, risk on the part of the bank is minimal. Bank knows it can claim your house in case of non-payment, so they give you lower interest rates automatically.

3. Tax Savings

Your mortgage interest rate is tax-deductible if you buy a house up to $1 million. For example, if you are in the 33% tax bracket and invest an amount at 5%, the profits would get taxed at 20%, allowing you to keep just 4% profit after tax. Whereas, if you acquire a mortgage at 5%, then the cost of the loan would be 3.35% after taxes. It indicates your investment earns lesser than the long-term mortgage loan, making it more profitable through tax savings.

4. Easier EMI in Long Run

When you have a fixed-rate long-term mortgage loan, even if initially you find it difficult to bear, in the long run, it gets smoother. The EMI stays constant, but your income rises steadily over 15 or 30 years. Moreover, the house value also grows substantially over time, letting you liquidate the equity easily.

Conclusion

If you are buying a house, consider the benefits of taking a long-term mortgage in Stillwater/Hudson. First, talk to your bank officials in Stillwater, MN / Hudson, WI, and get them at inexpensive rates. Then, utilize its benefits for an intelligent financial decision.

Get a Home Loan with No Credit

Its true credit can be a crucial component to qualify for a business loan or home loan in Stillwater and Hudson, but it’s not everything. You can get a home loan with little or no credit from banks, but you have to go a little extra mile for that. That extra mile effort depends on factors like your credit history and the type of home loan you want from a bank in Stillwater, MN /Hudson, WI.

Home Loan-FSBT

3 Ways To Get A Home Loan With No Credit

1) A Creditworthy Cosigner

A cosigner could be anyone with a higher credit score and not necessarily the one living with you or helping with making the monthly payments. For approving the loan, banks consider the cosigner’s income in the affordability calculation. You make all the payments after loan approval, but the cosigner becomes responsible should you stop paying. Therefore, before signing, the cosigner and you must clearly understand all the pros and cons of the arrangement.

2) Larger Down Payment

Whether taking a business loan or home loan in Stillwater/Hudson, putting a larger down payment makes lenders and banks apprehend you have more skin in the game. It lowers the loan amount, equating to lesser risk for the lender. It is also a popular way of getting a home loan with no credit.

3) Manual Underwriting

Nowadays, most lenders rely on fintech tools like automated underwriting systems to consider borrowers’ qualifications for a loan. The manual underwriting process enables banks to examine their risk level. They analyze details like your income, employment, existing debt, and monthly expenses to deny or approve a loan application.

 Easy Tips to Build Your Credit Profile History

●     Timely Payment of Monthly Bills

If you have monthly bills, including utilities, car loans, or student loans in your name, pay them on time each month. It helps the bank in Stillwater, MN/Hudson, WI evaluate your payment history, assuring them and building your credibility.

●     Have A Credit Card in Your Name

Apply for a low-balance credit card in your name using e-banking in Stillwater/Hudson. When you pay their balances off by their due dates, it builds your credit profile.

●     Get Rental Payment Data

Check if your property manager has reported rental payments to any credit bureaus through platforms like Experian RentBureau. Ask them and get the rental payment data. Such valuable data supports your payment history evaluation to lenders and banks. Use programs like Rental Kharma and Chime for rent payment through apps and build your credit profile.

●     Be an Authorized User of Someone else’s Credit Card

Like a cosigner, you become responsible for any debts you accrue. While timely payments build your credit profile, any missing ones (even by the account holder) impact your credibility equally. Therefore, choose a responsible account holder for such an arrangement. They must understand all the pros and cons before agreeing to such a deal.

Conclusion

Don’t let your financial situation be an obstacle to homeownership. Consult a trusted loan advisor with any bank in Stillwater, MN/Hudson, WI discuss your unique financial condition and goals. They can help you choose the best possible way to get a home loan with no credit.

2022 Tax Season: How Taxes Influence Your Business?

Another year is gone, and it’s time for filing taxes!

The 2022 tax season started on January 24th and will be till April 18th. If you need a tax extension, apply now before the April 18th deadline ends. It will permit you to file your returns as late as October 17th, 2022. Filing your taxes on time accurately and honestly helps you secure business funding easily from any bank in Stillwater, MN,/ Hudson, WI, or through Ebanking in Hudson/Stillwater.

2022 Tax Season

According to IRS, businesses have several forms of taxes like income, estimated, self-employment, employment, and excise. You have to pay them annually without any inconsistency to understand your business’s financial health and sustainability. For it, you must understand how taxes influence your business.

Two Critical Ways Taxes Influence Your Business

●     Taxes have a direct impact on your cash flow and investment plans.

Do you have plans in 2022 to expand into new territory, take risks, pay off debt, purchase large equipment, handle employee payroll, or make long-term investments?

If you do, then any lender or bank in Hudson, WI,/ Stillwater, MN, would demand to see your financial documents. It includes documents like bank statements, credit scores, personal credit scores, and a copy of your previous tax returns. 

Adjusting depreciation and taxes from your cash flow statement shows an accurate financial picture of your business for the financial year. It directly influences your long-term investment plans and helps you secure funding for your business.

●     Taxes spotlights the bottom line of your business’s profitability.

When you want potential purchasers, lenders, and investors to compare the financial performance of your business to others in different industries, with varied capitalization structures, in different tax jurisdictions, you can show EBITDA (Earnings before interest, taxes, depreciation, and amortization) statements.

However, it gives a misleading impression, especially if you need to mortgage in Hudson or Stillwater. The US Generally Accepted Accounting Principles (GAAP) do not conform to EBITDA as it masks potential problems in businesses like excessive debt, poor cash flow, and high borrowing costs. 

EBITDA helps lenders and investors to compare the profitability of businesses, but it doesn’t indicate your company’s financial position. Deducting interest, taxes, depreciation, and amortization from your earnings allows you to see the bottom line of your business’s profitability. It lets you know how sustainable your company is in this financial year.

Conclusion 

Whether you need an exact picture of your business’s profitability or want to secure funds from any bank in Stillwater, MN,/Hudson, WI, you must file taxes timely in the 2022 tax season to structure all your business financial plans. Consult with a professional financial advisor to know further how various business taxes precisely influence your company before taking any mortgage in Hudson/Stillwater.

Process of Getting a Personal Loan to Consolidate Debt

Various debts you take from banks like a car loan, business loan, or a home mortgage in Stillwater and Hudson come with some collateral backing it. For such secured debts, a bank in Stillwater, MN, and Hudson, WI, can take or reprocess the collateral when you stop paying the debt.

Unsecured debts like credit cards, student loans, or personal loans are the ones you are liable to pay and agree to pay to the bank in Stillwater, MN, or Hudson, WI. But they cannot foreclose your home or throw you in jail to recover the debt. They cancel your credit cards, impacting your credit score that affects your chances for a business loan in the future in Hudson or Stillwater.

Banks will always try to get their money back, and a lower credit score will impact your financial health more. Therefore, if you have a lot of unsecured debt with high-interest rates, it is wise to get a personal loan and consolidate your debt.

What Is Loan Consolidation?

Combining multiple unsecured debts into one personal loan debt is called loan consolidation. It helps you avoid the headache of multiple debt payments each month. Personal loans available under ebanking Hudson or Stillwater are as low as 5.99% or even lower. But, most of your credit card or other debts have interest rates of 18-24% or higher.

A personal loan is an installment loan. It has a fixed end date, and with its fixed-rate loan, the monthly payments remain the same for the duration of the loan period. Getting a personal loan to consolidate debt can simplify your life and benefit you with lower interest rates to clear your debt.

Process of Getting a Personal Loan to Consolidate Debt

1) Compare different bank lenders in Stillwater, MN, and Hudson, WI, to see what types of personal loans they offer.

2) Understand all collateral requirements or prepayment penalties if you choose to pay off the loan ahead.

3)  Consolidate all your debts to calculate your loan amount. Let’s say you have multiple debts like

• Private student loan of $ 10,000
• Credit card debt on card X $ 8,000
• Credit card debt on card Y $ 10,000

You owe an XYZ bank in Stillwater, MN, or Hudson, WI, a total of $23000 that you pay each month with three different payments.

4) Pick a personal loan with a longer-term and larger loan amount to lower your interest rates.

5) Now, use the debt consolidation loan to pay off the three debts. Such a personal loan effectively condenses those debts into one single debt of $28,000 with a lower interest rate.

Conclusion

A personal loan from a bank in Stillwater, MN, or Hudson, WI, does not have any form of collateral other than your promise to repay. Loan consolidation helps in financial decluttering and allows you to clear your high-interest debt through personal loans with lower interest rates or terms.

Variables That Affect Your Mortgage Interest Rate

When taking a mortgage in Stillwater or Hudson, it is understandable that you want lower interest rates. But, often, you find it puzzling to figure out how your mortgage rate gets determined. Your bank in Stillwater, MN, and Hudson, WI, already knows it, and so you must know it too. Understanding the variables that affect your mortgage rate helps you prepare better for the home-buying process. In addition, it empowers you to negotiate more favorable mortgage deals with the banks.

Variable That Affects Your Mortgage Interest Rate in Stillwater and Hudson

1) Property Utility

If you are a primary residence of the property given for mortgage in Stillwater and Hudson, banks offer the lowest interest rates. But when it is your second home or some investment assets, the interest rate can soar higher.

2) Property Type

The type of your property also plays a significant role in determining your mortgage interest rates.

• Single-family homes and condominiums

 If you put 25% or more in a down payment or equity for such property, you get lower interest rates from banks.

• Condos, multi-family dwellings, and co-ops

You get higher mortgage interest rates if you put less than a 25% down payment.

3) Credit Score

Your credit score is the key variable that affects your mortgage interest rate with any bank in Stillwater, MN, and Hudson, WI.

If your credit scores are higher (like 800), you will receive better interest rates (at least 1.5% lower) than those with lower scores (below 640).

4) Down Payment

The percentage of down payment you make affects your mortgage interest rate directly. So, make a down payment of 30-40% instead of 20% and get a reduced mortgage interest rate in Stillwater and Hudson.

5) Loan Term

While taking a mortgage, consider keeping the loan term short. If you have a short and fixed loan term, say 15-years, banks will offer lower interest rates than longer-term programs like 30-years.

6) Loan Amount and Type

Mostly, banks offer lower mortgage interest rates for conforming loan amounts below $500 000. The high balance conforming loans might vary from one bank to another in Hudson, WI, and Stillwater, MN, but it always attracts higher interest rates. Similarly, the type of conforming loan (FHA, VA, USDA, and 203K loans) also impacts your interest rates.

7) Piggybacks or Second Mortgages

When you take a loan with a concurrent 2nd mortgage, it will get a higher interest rate than any loan taken with 20% with private mortgage insurance (PMI).

8) Rate Lock Period

You can have mortgage interest rates locked in or guaranteed with time coinciding with the closing date. The rate lock period can be from 30 to 60 days. Remember, the interest rate rises with a longer rate lock period. To get lower interest rates, keep the rate lock period short.

9) No-Cost Refinances

The offer might seem tempting while refinancing your mortgage loan, but banks always charge a higher interest rate for it.

Conclusion

Before taking a loan or mortgage in Stillwater and Hudson, consider these variables that impact the interest rate. Go for reliable banks that do not offer one-size-fits-all interest rates but instead recognize individual financial status to determine it.

How To Get Cash for Your Growing Business?

For any company, working capital is its lifeblood that keeps the business running. When cash is not pouring into your growing business every day, it impacts all operations like sales, materials, labor, and overhead. Speak to your bank in Stillwater, MN, or Hudson, WI, to find a solution at once.

Working capital is obtained from the difference between your current assets and current liabilities. It indicates your business’s short-term financial health. Cash frozen up in your inventory or accounts receivables creates a shortfall that causes you to miss growth opportunities.

Common Ways To Get Cash for Your Growing Business

Lines of Credit

Lines of credit are a form of debt that a bank in Stillwater, MN and Hudson, WI, provide. To get it, you must qualify for it first. The tricky thing is – when you don’t need one, you qualify easily.

It is among the cheapest forms of outside working capital, but it can quickly turn into a debt trap if your inventory or accounts receivables do not convert in cash faster. As a business owner, access your cash needs and then take credit which you affordably payback.

Exercise discipline and maintain tight controls to make effective use of a line of credit. If your company has a strong cash position, it allows you to exploit exponential growth opportunities.

Merchant Cash Advance or Business Loan

Many respectable companies offer a business loan in Stillwater and Hudson that often gets approved within 24 to 36 hours. You must be cautious while taking such a business loan in Stillwater and Hudson.

Such companies review your bank statements and transfer funds in your account the same day or the next without any collateral. But, it’s a tactic to lure you into paying fees above 50% or 70% of the effective interest rate.

If you want smaller business loans and have a good payment history, it is not an issue, as you can pay back with daily withdrawals. Stay away from these predatory credit providers when you need a large sum of cash.

Factoring

Factoring or Accounts Receivable (AR) financing allows you to secure funds by using the value of your invoices. It is a faster method than applying for a line of credit with a bank in Stillwater, MN, and Hudson, WI.

In it, a factor (the company that agrees to provide cash to you) purchases your receivables and collects the payment when your client pays. If a client fails to pay, the factor will come back to you, and you have to pay back the uncollected amount.

Compared to other methods, you don’t incur any debt in it. You merely trade out a stale asset AR for a liquid one: cash. It is a self-liquidating type of financing and protects you from any debt trap. However, it is an expensive option as it’s a close-ended agreement (usually for a year). It involves a small initial fee that varies with each invoice making it difficult for you to know your all-in cost.

Conclusion

Always prepare financial plans to protect your business. Use self-financing options and focus on high-margin, quality customers that pay up on time. Talk to your bank in Stillwater, MN, and Hudson, WI, for better terms in lines of credit.

Credit For Your Retirement Plan

Retirement plan credit is a credit that helps qualified retirement savers offset their federal income taxes. The credit for retirement plan can range from 10-50% for eligible savers, with the highest percentage going to taxpayers with the least income.

This credit for retirement plan was introduced as an incentive to encourage retirement savings, under the Economic Growth and Tax Relief Reconciliation Act of 2001. The credit is non-refundable, i.e., the amount you claim for credit can never be more than the amount you owe for a particular year.

Who Can Take the Credit?

You can check with your financial or tax professional to know whether you’re eligible for retirement plan credit or not. In 2020, you may be able to contribute to retirement plan credit if you contribute to SIMPLE, 401(k), 403(b), SARSEP, government 457(b) plan, or traditional or Roth IRA and your MAGI is less than $64,000.

You can claim 10%, 20%, or even 50% of your eligible contributions on your taxes depending on your MAGI, your filing status, and many other factors. The maximum credit amount is $2,000 for single filers, qualifying widowers, heads of household, and married couples who file separately. However, your maximum credit is $4,000 if you’re married and file jointly.

Other requirements to qualify for Minnesota retirement plan credit are:

• You’re 18 years old or above
• You are not a full-time student during the calendar year
• You don’t claim yourself as dependent on another person’s income tax return
• Your income falls within the limits established by the IRS in 2018

Questions to Ask Before Choosing a Loan Officer

From owning a house to investing in a business, it is easy to do by getting a loan. But the process of applying for small business loans in MN is tedious and intimidating. It can be significantly improved by having an honest and efficient loan officer to help you. The lenders have representatives, known as loan officers, to help you with the application and underwriting process.

Loan officers assist with getting a long refinanced or obtaining secured as well as unsecured loans. They need to be up-to-date with the various rules and regulations in the banking industry, lending products, and documentation required.

Before choosing a loan officer, there are a few key questions you must ask.

How much is the fee?

The fee of the loan officer will be included in the overall cost of the mortgage. Depending on the lender and wholesaler, the officer can charge different rates from you. Though there will not be significant variations, it is wiser to know all the charges that you need to pay before getting the mortgage.

The willingness of the loan officer to explain all the charges while procuring Stillwater loans is a great indicator of his integrity and knowledge.

What Experience does he have in the Mortgage Business?

An experienced loan officer will be able to help you better and in an efficient way. However, instead of asking about the experience with the lender, ask how long the officer worked in the industry.

Do not hesitate to ask personal questions such as the number of loans they had underwritten in the past quarter. It is a dynamic industry with everchanging rules and regulations, so you need to ensure that the officer has sufficient knowledge of the latest regulations before applying to Minnesota Bank and Trust for a loan.

How many lenders do they transact with?

Loan officers are not regulated to work with a single lender. They may collaborate with several lenders leading to different price relationships with each. Depending on the price relationship, they are more likely to favor a product over another or charge differently.

Ask about the lenders they transact with and the various products provided by them all. The loam officer should give you detailed information on the products and shortlist the popular ones according to your requirements. Compare the products and their costs yourself to choose the one best suited for you.

What is the Expertise of the Officer?

There are different types of loans, each with their own set of policies. While the basics of applying remain the same, some loans such as Veteran Affairs loans have stricter guidelines and need more documentation.

Look for a loan officer who has significant expertise regarding the type of loan you are applying for.

What Happens to the Loan?

Once you get the money, what happens then? Ask whether the lender holds the loan or flips them to a third party.

In the latter case, understand that you would have no relationship with the lender after the loan is flipped. All future payment and communication will be directed to the third party. Also, ask about the experience of the previous clients of the loan officer during the loan application and repayment processes with the same lender.

Finally…

Trust your intuition while speaking with the loan officer. Choose a loan officer with whom you will be comfortable and who provides you with the information rather than coercing you into a decision.

6 Facts That Most Americans Don’t Know About Credit Score

A credit score is a number that is analyzed depending on an individual’s credit files. The credit score represents the creditworthiness of an individual.

Here are some more facts about credit score that you must know:

Fact 1: 5 Factors Impact Your Credit Score

If you’re trying to improve or maintain your credit score, you must know these 5 factors that impact your credit score:

• Credit inquiries (10%)
• Account balances (30%)
• Credit history length (15%)
• Payment history (35%)
• Types of credit (10%)

Fact 2: You Can Get Your Scores & Reports for Free

You’re can get a free copy of your credit report from three different credit reporting agencies: Equifax, Experian, and TransUnion.

Fact 3: Credit Score Ranges From 300 – 850

According to FICO and VantageScore, credit score ranges from 300 to 850. Good (690 and up) or excellent (720 and up) scores give you better choices and save money.

• 300-629: Bad credit
• 630-689: Fair credit
• 690-719: Good credit
• 720 and up: Excellent credit

Fact 4: Your Credit Scores Won’t Get Merge with Your Spouse’s Credit Post Marriage

You’ve joint accounts doesn’t mean that your credit score will merge with the spouse. Your credit score history will remain independent from your partner.

Fact 5: Improving Your Score Isn’t Impossible

People who’ve filed for bankruptcy or have had their possessions repossessed may think that their credit score can’t improve. However, it’s not true. With proper measures and careful practice, they can improve and maintain their credit scores. But once credit score improves, it’s better for everyone to learn from their mistakes and start working towards healthy financial wellbeing.

Fact 6: It’s possible for you to have no credit score

According to Credit Financial Protection Bureau, “1 out of 10 Americans are credit-invisible.” There are chances that you might fall in this stats. If it happens to you, you can consult the best lender in Stillwater MN.  They can help you build your credit history to get on the radar.

Want more information about credit score? Get in touch with Stillwater MN Banks consultants!