Not every state requires home inspectors to obtain a license to do home inspections. Before you hire someone, check the home inspection requirements in your state. Your real estate agent will likely recommend a few inspectors, but you should call and interview them before hiring. Ask for references and a sample inspection report. Find out if they are bonded and insured. Also, examine their website and read reviews on Google, Yelp and Angie’s List™.

Inspections should be thorough with final reports often 25-80 pages long. Key areas that should be included are structural components, exterior features, electrical, plumbing, heating and cooling systems, insulation and ventilation, fireplaces, roof and crawl space. Don’t be afraid to ask questions and insist these areas be examined before they turn in their final report. Most home inspections cost between $350 and $600. If they ask for significantly more or less, that may be a red flag.

Know Your Home Inspection Options

Depending on the home’s age and condition, you may want to perform additional inspections. For instance, properties that do not have access to public sewer systems should have the septic system inspected. Similarly, a home that is not connected to public water should have the well and water tested. A pest inspection to check for termites or other wood destroying insects is also valuable. While all of these inspections may cost money up front, they may save you thousands of dollars in future repairs.

Understand the Benefits of Home Inspection

A thorough and professional home inspection allows you to examine any red flags before you decide to purchase a home. Sewer and drainage issues, such as standing water in the yard, erosion and heaved walkways may indicate the need for expensive fixes in the future. Check to see if the home is in a flood zone and look closely for any water damage or mold. Find the source of the mold or water damage and assess the costs to repair it before making a decision to buy. Foundation and electrical issues are also red flags in any inspection. Electrical issues may increase the chance of fire and major foundation issues may cost up to $10,000 to repair.

Negotiate Repairs that Protect Your Home  

If you feel confident in the results of the inspections and are ready to move forward, another round of negotiations will likely occur to discuss fixes or buyer/seller cost responsibilities. How these negotiations play out depends on the issues discovered during the home inspection. Remember, very few inspections are perfect. You may ask the seller to repair the issues before closing, however sellers are not always motivated to have high-quality work done. Instead, you may want to ask for a price reduction for repairs. You may also ask for a home warranty to cover the first year in case you need to repair the 25-year-old water heater or other appliances. Work closely with your realtor to determine how to approach repairs.

Lenders at RCB Bank are happy to help answer questions even if you are not a customer. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.  For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply. Equal Housing Lender, Member FDIC. RCB Bank NMLS #798151.

‘Tis the season for shopping, gifts, cheer and scams. Scams? That’s right; every year fraudsters prepare to take advantage of unsuspecting shoppers. Fake ads and websites try to lure you into spending for items you may never receive. Imposter charities tug on your heartstrings to get a donation. Gift cards are duplicated or stolen before they are used by your loved ones. Learn how to sniff out these common scams and limit your risk this holiday season.

Debit Card Details Phishing

Fraudsters are smart and know that during the holidays we utilize our debit cards often. To seem “helpful,” scammers are calling debit card customers pretending to be Fraud Department employees to verify a customer’s debit card details. The fraudsters already have the 16 digit card number and expiration date. They are then asking you to confirm the 3 digit security number. Once they get that from the customer, they are then running free making purchases with the card. Remember, the RCB Bank Fraud Department will never ask for such information when they call. While this type of phishing scam is happening currently, it can happen year-round. Stay vigilant, friends!

Online Shopping Scams

During this holiday season, more people than ever are buying gifts online. Scammers prepare for this influx of web traffic with several schemes to steal your money, personal information or both. A common tactic fraudsters use is to create fake social media campaigns and websites that imitate major brand ads, but with great deals. According to the Better Business Bureau (BBB), be wary of ads that promise “last minute deals,” “flash sales” or “limited quantities.” In many cases, you will not receive the item you ordered or you may receive an inferior counterfeit item. Your credit card information can also be stolen, used to commit identity theft or sold on the dark web.

Gift Card Scams

The most common gift card scam involves tampering with the racks of gift cards displayed in stores. The criminals will use handheld scanners to get the barcode information and periodically call the retailer to see if they have activated the card. Once the card is purchased and activated, they either order material online or create a counterfeit card. The less sophisticated fraudsters will simply scratch off the PIN, record the barcode and wait for the card to be activated. Other gift card scams will create fake websites that offer gift cards to major retail chains in exchange for giving them information.

Charity Scams

Don’t let scammers take advantage of your generosity. Similar to real non-profits, scammers will solicit you through email, letters and phone calls. They may even have a website that looks legitimate. It is a red flag if any charity pressures you to donate right away or asks you to donate through a wire transfer or in gift cards. If you are unsure, check the BBB’s Wise Giving Alliance or Charity Watch to verify the organization.

What can shoppers do to protect themselves?

• Does the holiday deal seem too good to be true? Make sure you know the merchant when shopping online. Research the BBB rating for the business and stick with direct manufacturer websites for products.
• Do not click on a link in an advertisement or email as it could contain malware or take you to a cloned website where fraudsters steal your card information, address, etc.
• Giving is always a wonderful, positive and uplifting thing to do. Plan to give to certain organizations that you know, especially so you can see the fruits of your good work!
• If you feel you have been a victim of identity theft, put in a fraud alert immediately. Details on how to file a fraud alert can be found here. Then report it to the police, your bank and credit card companies. If you feel that you lost your identity due to online activity, please file a report with ic3.gov.

Sources

Scam, Fraud Alerts – Protect Your Digital Identity (aarp.org)

Inside the FBI: Holiday Scams — FBI

Internet Crime Complaint Center(IC3) | Home Page

Scams and Safety — FBI

What is Escrow?

As a homeowner, you are responsible for expenses beyond your mortgage payment such as property taxes, homeowner insurance and mortgage insurance. Put simply, an escrow account is set up by your lender and helps you budget for these expenses by including them in your monthly mortgage payment.

How Does Escrow Work?

First, your lender adds up your additional home-related costs outside your mortgage payment, including property taxes, homeowners insurance, mortgage insurance and flood insurance. Then, they divide the total cost of these payments by 12 months and add it to your monthly mortgage payment.

With an escrow account, you make one monthly payment that includes your mortgage principle and interest, plus a percentage of your insurance and tax expenses. Every time you make a mortgage payment, your escrow account grows. When insurance and tax payments are due, your lender uses the money in your escrow account to pay those bills.

Is an Escrow Account Required?

Most lenders require escrow accounts on mortgages where you pay less than 20 percent down. Your escrow account is set up at closing and allows you to pre-pay the required insurance and taxes for the following year.

If you put more than 20 percent down and decide not to open an escrow account, you will need to pay your property taxes and insurance premiums as lump sums. Depending on the value of your home, these payments can cost several thousand dollars each year. Make sure to budget for these costs so they do not catch you by surprise.

Escrow Management: Can my payment change over time?

Yes, if there are changes in insurance costs and taxes, your escrow payment will also change.

Your lender will review your escrow annually. The review looks at updated taxes and insurance costs to ensure the amount paid into the account is enough to cover costs. If costs have decreased, due to a change in insurance for example, there may be an overage and you will be issued a refund. If costs have increased, you will be required to make up the difference.

There are two ways to manage escrow payments if costs increase: 

1. Pay the difference in one lump sum. Your full payment covers the past payments and brings your account to balance. An increase in monthly payments is still necessary to cover the increased costs in the future, but you will not have to pay the shortage in future payments.
2. Divide and pay the amount over the next 12 payments. Paying back your shortage over time will increase your monthly payment because you are paying the shortage plus the increase in costs over the next year. This option will increase your payment by twice what the previous option would increase.

Financially Fit Tip: Shop Around for Insurance

To reduce how much your escrow fluctuates from year to year, review your homeowner’s policy and insurance plans. It is always a good idea to comparison shop and request quotes. If you find a better deal, contact your lender to update your escrow account information.

Lenders at RCB Bank are happy to help answer questions even if you are not a customer. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.  For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply. Equal Housing Lender, Member FDIC. RCB Bank NMLS #798151.

It is the season for giving thanks, so why not give back to your home. With these inexpensive updates, you can increase the resale value of your home and create a space you love even more.

Break Out the Paint

A little bit of paint can go a long way. While it is expensive to replace kitchen cabinets, sanding and painting them costs much less and can make the room feel brand new. The same goes for other rooms in your home. Just remember that neutral colors are better for resale value because they appeal to the most people. Paint can also refresh your old front door and add a pop of color to your house.

Bathroom Basics

There are plenty of ways to update your bathroom without breaking the bank. Bathtub looking a little worn? Paint it with epoxy. This gives the tub a fresh look and immediately improves the look of your bathroom. You can also replace outdated fixtures such as the sink and bath tub faucets to add a fresh touch. If you have old brass fixtures, a bottle of brass darkening solution can give them an antique look for less than $20.

Shine a Light

Every room in your house can benefit from new light fixtures. The first step is deciding what areas need an upgrade. Take an inventory of your lights and choose which ones to replace based on their positive impact.  A new chandelier above your dining room table adds a focal point to the room, while adding track lighting to a living room creates ambience and focuses attention on the furniture. In the kitchen, adding track lighting to the bottom of the cabinets makes tasks easier and adds a sophisticated finish. Just remember to choose something that reflects your style and matches the other lighting in the house.

Curb Appeal

You don’t have to hire a professional landscaping company to give your outdoor space a fresh look. If you already have patio furniture, buy new all-weather pillows to refresh the space. Brighten up a sidewalk or pathway with wire-free battery powered lights. Not only will it make the path safer, it is warm and welcoming. Other simple landscaping tasks include adding a border or edging material around your garden beds, building a fire pit or planting inexpensive perennials.

No matter what home improvement projects you choose, there is a simple and inexpensive way to make old spaces look new. Not only will you enjoy the updates now, they can also improve the resale value of your home in the future.

Opinions expressed above are the personal opinions of RCB Bank personnel and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply.  RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.

While most of us know saving money is a good idea, we often struggle to save for the future. Saving is not a one size fits all solution, but building a savings plan for your future is an important step to becoming financially independent. Talk with a wealth advisor about your personal goals. Your future self will thank you.

Build an Emergency Fund

Set a reasonable goal. Start by trying to save a small amount, such as $1,000. Don’t feel pressure about how much you are saving, just save something.

Take the next step: Track your spending and develop a budget. Do everything you can to stay within your budget. Little things will help you succeed, e.g., set up automatic savings with your bank, create a grocery list (and stick to it), cut coupons and save change.

Save for Education

Consider education investment programs. A traditional savings plan is good, but you also may want to consider an investment account.

Take the next step: Look up your state’s options for 529 plans or speak with a wealth advisor on interest-earning, tax-advantage plans. Some education plans allow you to use earnings on tuition and fees (including K-12 public and private), books, computer equipment and room and board.

Retirement Planning

Save today for your future self. There are four primary ways you can fund your retirement: personal savings (e.g., IRAs and investment accounts); Employer retirement plans; Social Security benefits and retirement income (rental property, part-time job).

Take the next step: Talk with a wealth advisor who can help you build a retirement savings plan and income strategy to maximize your savings.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Investment products are not insured by the FDIC. Not a deposit or other obligation of, or guaranteed by the depository institution. Subject to investment risks, including possible loss of the principal amount invested. Ask for details.

Understanding Closing Costs

Now that you have found the perfect home, it is time to tie up all the loose ends and finalize the sale. Part of this process is to pay your closing costs. Closing costs can be a surprise, as they are more than most buyers expect, especially first-time homebuyers. With a good banker and real estate agent on your side, you can better understand and prepare for these costs. So, what is included in your closing costs?

What’s Included in Closing Costs?

Closing costs can be made up of multiple items. Costs from the lender may include origination fees, points, underwriting, processing, appraisal and a credit report, among other fees. These costs can vary from lender to lender and depend on several factors, but generally cost between $1,000-$6,000. Fees from the title company, such as a closing fee, title insurance, abstracting and the survey, can range between $1,000-$5,000 depending on the title company, state and individual transaction details. There will also be money needed at closing for your prepaid items. These consist of prepaid interest from the day you close through the end of the month, one year of homeowners insurance, as well as reserves deposited into your escrow account for taxes and insurance. Realtor fees are also included in closing costs. The exact amount varies from company to company, but generally they earn about 6%.

Know the Market

In the right market conditions, you may be able to get some or all of your closing costs paid for by the sellers. If homes aren’t selling as quickly or the market is slower, you have a stronger chance of the seller taking on some or all of the closing costs. In a market where houses are selling quickly and there are multiple bids on a property, the chances are slim that a seller will take on closing costs. Certain loan types as well as down payment programs will allow or limit the amount the seller can pay in closing costs.

Homeowner’s Insurance

While your real estate agent or banker may have a company they recommend to use for homeowner’s insurance, you should shop around and compare prices. Often, you can get a better deal or bundle your car and home insurance for savings.

Buying a house is a complicated process, but the more you know about closing costs, how much they cost and whether  you can get any of them paid for by the seller can make the process that much easier.

Opinions expressed above are the personal opinions of RCB Bank personnel and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply.  RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.

“There are a lot of ways to do the same thing,” says RCB Bank Treasury Services manager Keith Moyer. After 25 years of helping businesses with their banking needs, Keith has learned that success is more than the products you offer. “Many banks offer similar products, but for us it is about relationships. Our goal is to find the best solution for each individual client.” A good banker will first want to get to know your business, your leadership and your goals, says Moyer. “This consultation allows us to present financial solutions that add efficiency and value to your business.”

Discussing your current systems and future goals with your banker before making decisions will help them recommend products that streamline deposits, payments and day-to-day cash flow.
This saves time, improves the accuracy of your records and helps regulate the budget, according to Moyer. “We want to give clients control over their success,” he says. “Sometimes this is as simple as converting a manual process to a system that does it automatically.”

For example, PosPay is a service that authenticates payments and validates vendors against your approved list. Not only does this make the business more efficient, it reduces the risk of losses due to fraud, Moyer explains. Nearly as important as having the right product is having a stellar treasury support team backing you up. Find a bank that provides on-site installation and training to ensure everything is set-up correctly and is available to answer questions, according to RCB Bank Treasury Support Specialist Brianna Davenport. “We want to make our customers’ lives easier, not more complicated,” she says.

A good treasury support team works in tandem with the business sales representative to ensure everything runs smooth. They also work with the business owner to help them maximize their new service. “We work closely with our sales team,” notes Davenport. “We talk with customers about the technical side and help them understand the product better.”
She adds, “We want our business customers to know they have a relationship with a whole team, not just an individual.”

When choosing a bank to partner your business with, there is more than just comparing the cost of services. Relationships, tailored financial solutions and great support services should be at the top of your list.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. See a business representative for specific questions regarding product details, qualifications, fees and restrictions for your personal situation. Call us at 855-BANK-RCB, Member FDIC. RCB Bank NMLS #798151.

Even if you have student loan debt, there are viable paths to homeownership. The process is easier if you understand debt-to-income ratio, the importance of your credit score and the possibility of refinancing your student loans.

Understand your Debt-to-Income Ratio (DTI)

To determine your debt-to-income ratio your lender divides all your monthly debt payments by your monthly gross income. Debts may include student loans, auto loans, credit card debt, child support payments and your potential mortgage payment. For example, if you make $3,000 per month and owe $1,100 in debt per month, your debt-to-income ratio is roughly 37% ($1,100/$3,000 = 36.667). Depending on the lender, they will likely want to your debts to be less than 45% of your income.

If your student loans are in deferment, the mortgage lender often considers 1% of your total student loans as the monthly payment. However, if you have a document from the student loan lender that indicates you will be on an income-based repayment plan or will pay less than the 1% amount, your mortgage lender may adjust the monthly debt amount.

Increase your Credit Score

Before you apply for a mortgage, you should check your credit score with Equifax, TransUnion and Experian. Generally, if your credit score is below 640, building up your score before you apply for a mortgage can help. One thing that can impact your credit score is your outstanding credit card balance in relation to your card limit – known as credit utilization. When you pay down credit card debt, it helps improve your credit utilization amount. Other ways that may improve your credit score include paying your bills on time, asking for higher credit limits and disputing any inaccuracies in your credit reports.

Refinance Your Student Loans

Another way to lower your DTI ratio is to refinance your student loans and get a lower monthly payment. If you have a strong credit score and meet the refinance qualifications, you may get a lower interest rate on your student loans, which usually means a lower monthly payment. However, you should talk to your mortgage lender before refinancing. Refinancing does appear as new debt on a credit report and may negatively impact your credit score in the short-term.

Even if it takes a little longer than you expected, you may still fulfill your dreams of owning a home. Talk with your lender to find out what you need to do to get started.

I am here to help, even if you are not an RCB Bank customer. You can find my contact information below.

Opinions expressed above are the personal opinions of RCB Bank personnel and meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply.  RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.

You may not feel comfortable getting your teen a credit card right now, but it is never too early to talk about the benefits and risks of having one.

Credit Cards Are Not Free Money

Credit cards are a line of credit. This means they are debt until the bill is paid. Read the fine print on your credit card bill with your teen. Explain how quickly interest and late fees add up, and the burdens of long-term debt. “Teens need to learn the risks of credit cards,” cautions RCB Bank Mortgage personnel. “They need to learn how to be responsible and not over extend credit.”

Learn How to Budget Expenses

“Before you discuss credit cards, teach your teens how to create a budget,” says RCB Bank Wealth Advisor Cathy Sang. Talk about bills and monthly expenses and how you manage them. Better yet, create a budget with your teen using an average beginning career income. Determine how much can be spent on bills and extras, such as shopping or eating out. This will teach them how to plan for and manage their expenditures, so they don’t overextend credit.

Credit Reports & Credit Scores Matter

Talk to your teen about credit reports and how they offer details on how people manage money. This is important for when they want to buy a car, for example. Explain how credit scores impact their ability to get lower loan and insurance rates. “Kids need to understand the importance of building a good credit history early,” says RCB Bank Wealth Advisor Mary Wood. “Using a credit card wisely, by paying off the balance each month, can help improve their future credit score.”

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Member FDIC.

Do not assume that just because you are self-employed you can’t get a mortgage. While there are different requirements, you can still work with your lender to buy the home of your dreams.

First Steps

A good way to prepare for the mortgage application is to improve your credit score. Paying off consumer or credit card debt should be a top priority. Banks also like when people who are self-employed have cash reserves to pay the mortgage for six to 12 months. A larger down payment of 10-20% may also offer lenders assurance when applying for a mortgage.

Documentation

Your biggest hurdle to getting a loan when self-employed may be income verification. Since your tax return likely has significant deductions, it may not show the amount of income needed to qualify for a mortgage, you will need additional documentation to show your banker. Your banker may ask for proof of any debts or assets you own, your business taxes for the last two years, earnings statements, savings and retirement balances and profit and loss statements may be required when you apply. Many lenders may also want to see that you have been in business for two years or more and have a low debt-to-income ratio.

Ways to Plan Ahead

• Remember to keep your business and personal finances separate. This will make it easier for the lender to evaluate your liabilities and examine your business profit and loss.
• If you have trouble getting a mortgage on your own, a co-borrower may improve your chances for approval.
• Do not be afraid to call and ask your mortgage lender questions about how to make the process easier. Even if you are not initially prepared to get a mortgage, they can talk you through the process and make suggestions as you prepare to buy.

If you are self-employed, getting a mortgage may be a challenge. This does not mean you cannot get a mortgage, it simply means you may need to prepare differently to buy a home.

Opinions expressed above are the personal opinions of RCB Bank personnel and meant for generic illustration purposes only. With approved credit. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. Some restrictions apply. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. 

I challenge you not to accept your financial life as it is. This coming year, aim to get ahead — start an emergency fund, build your retirement savings, pay off your debt or take control of whatever money situation is causing you stress.

The key to getting ahead is to get started. Here are some tips to help you make a financial change.

Invest in you

To build your wealth, start paying yourself first. When you receive money, before you spend a penny, put some of it in your savings account or retirement fund. Set up automatic deposits and watch your savings grow with little effort.

Changing your saving habits may require changing your spending habit, but the payoff – not worrying about paying your bills, taking a trip you’ve been dreaming of and retiring on your terms – is worth it.

Stop throwing money away

Paying late fees is like pulling money out of your wallet and throwing it into the wind. Start paying down debt, beginning with the highest interest debt. Pay your bills on time. If need be, call the company and see if you can adjust your due date. Never hurts to ask and it could save you from paying late fees.

Try the 50/30/20 budget plan

Harvard bankruptcy expert Elizabeth Warren suggests splitting your monthly income into three categories:

1. Fixed expenses – survival needs – should total no more than 50 percent of your income.
2. Non-essentials – wants like TV, morning coffee, hair appointments – should total no more than 30 percent.
3. Savings – emergency fund, retirement – should be 20 percent or more.

Match your spending

Have a hard time sticking to a budget? Try this. Before you spend money on something you want, first put the same amount of money in a savings jar.  You will be able to see exactly how much money you are spending, or how much you could be saving or using to pay off your debt. If you cannot afford to match your spending, you cannot afford whatever it is you want to purchase.

Live within your means

Rich people stay rich by living like they are broke. It is a matter of what you value more, instant gratification or freedom from debt and having money when you really need it.

You work hard for your money. Do not waste it on things you do not really need.

50/30/20 Plan: Elizabeth Warren and Amelia Warren Tyagi. All Your Worth: The Ultimate Lifetime Money Plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. RCB Bank, member FDIC.

Convenience

Life often takes place outside business hours. Need to transfer¹ money into your account before dinner? No problem. At a soccer game and need to make sure the electric bill is paid? Check it instantly. You can also avoid late fees and set up automatic, recurring bill payments². To access these features, call your bank or ask your bank representative to sign you up when you open an account.

Security

Industry standard bank technology protects your money with firewalls, anti-virus protection, encryption, fraud monitoring and automatic logout, among other features. These create a strong defense against hackers who want to access your account. Scammers will also try to get information from you. Phone calls pretending to the be the IRS, emails claiming the bank needs your account information, charity scams, sweetheart scams and wire fraud are only a few of the culprits. Don’t give information to anyone unless you are absolutely sure they are legitimate.

Flexibility

The more time you save banking, the more time you can spend with your family, kids, friends or partner. Technology offers you the ability to customize your banking experience. If you only use your phone to check balances or make simple transfers, text banking³ is for you. Mobile deposit⁴ is perfect for those folks who need to deposit checks, but can’t make it into the bank. Depending on the bank, other services such as person-to-person⁵ payment systems and phone banking are also available.

Disclosures

¹Funds may not settle or be available immediately. ²Some fees and restrictions apply. Ask us for details. ³Standard carrier fees for data and text messaging may apply. ⁴Message, data rates, and fees may apply. All accounts utilizing service must be enrolled in eStatements to avoid fee. Subject to eligibility and further review. Deposits are subject to verification and may not be available for immediate withdrawal. Deposit limits and other restrictions apply. ⁵Available in the RCB Bank Mobile App. $1/transaction fee applies (non-refundable) and will be combined with the transaction amount. Requires an active debit card to initiate transaction. Transaction amount including fee is deducted from available balance immediately but may not settle on the same business day. Insufficient or Bounce fees may be incurred if adequate funds are not available at settlement. Funds may not be available to the recipient the same business day as transfer. Recipient must claim funds within 10 days. Fee is not refunded if recipient does not claim funds. Message, data rates, and transaction limitations apply. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Member FDIC.

Do you want to renovate a home after buying? Are you considering building a new home? In these situations and many others, you will need a construction loan before you start a traditional mortgage. Depending on your situation, different loans are required.

Construction to permanent

With a construction to permanent loan the lender releases money to the builder as phases of the construction are completed.

Upside: Once the build is complete, the loan converts to a standard 15 or 30-year mortgage.

Downside: You have to lock in the interest rate at the beginning of the process. It can take a year or more to build a home and interest rates could be lower by the time you actually move in.

Construction only

Another way to finance the construction of your home is with a stand-alone construction loan. With this loan type, the homeowner take two loans. The first loan finances the construction of the home and the second refinances the construction loan into a long-term mortgage.

Downside: Since you obtain two separate loans, you pay two sets of closing costs and go through multiple loans applications and closings.

Upside: If you want to shop around for mortgage options instead of being locked into one lender’s options, you can secure a lower interest rate.

Renovation construction loans

These loans are available to people who want to do a renovation, but do not have the money to finance it themselves. You have many options to pay for home improvements, including personal loans, lines of credit or government insured loans.

Upside: Renovations can increase the value of your home or reduce your costs in the long-term. Bathrooms, new insulation, kitchens and finishing basements all add value to a home.

Downside: The improvement in home value may not justify the cost of renovations. There is also a chance renovations will cost more or take longer than you expected.

We are to here to help, even if you are not an RCB Bank customer. Connect with a local RCB Bank lender to get answers to your lending questions.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. With approved credit. Some restrictions apply. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.

If you are considering buying a foreclosed property, it is good to familiarize yourself with the process. There are typically three times during this process when it is possible to buy the property: pre-foreclosure, at auction and after the foreclosure.

What is foreclosure?

A foreclosure is the process where a bank or financial institution takes ownership of a property due to a variety of reasons, but most commonly because of lack of payments on a loan.

Buying pre-foreclosure

It is possible to buy a home before the foreclosure is finalized and the homeowner has vacated the property. The bank is not involved in the sale yet and allows investors to make the homeowners an offer on the home. The benefit is that the buyer can inspect the home and get relevant details before purchasing. The seller also gets a chance to sell the home quickly and without it affecting their credit rating as much. If the sellers do accept your proposal, be prepared to close quickly. You must complete the sale before the lender puts the home up for auction.

Buying at Auction

Once the legal process is complete, the foreclosed property is sold at a public auction to the highest bidder. This process is completed in-person or online, and you are required to register if you want to bid. If you win the bid, you generally have to pay in full immediately after the auction. The bidding generally opens with an automatic starting price of the amount owed on the property.

To buy a foreclosure at auction, there are some things to keep in mind:

1. Do your research — When you buy a foreclosure at auction, you do not receive any guarantee that the property is free of liens or encumbrances. This means you could potentially buy a property that has claims against the property, such as a tax debt. Do a title search on the property you are interested in to make sure you can afford any additional costs. Title searches can be done at the county courthouse, or a title company can run a title for you for a fee.
2. Condition – Since the property belongs to the homeowners up to the point of foreclosure, you are not likely to get a chance to see inside the property. Look closely at any available pictures and drive by the property to inspect the exterior before the auction.

Buying post-foreclosure

Post foreclosures or real estate owned properties are those that did not sell at auction. To try and cover their loss and fees, banks will sell the properties through real estate agencies. The properties are generally sold “as is” and may need repairs. This makes the home inspection essential since you will pay for any repairs. It is also smart to get an appraisal to ensure the bank price is fair.

Buying a foreclosure requires a little more research and knowledge of the process, but armed with that knowledge you can often get a great deal on your next home. Connect with a local RCB Bank lender to get answers to your lending questions. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of RCB Bank personnel and meant for generic illustration purposes only. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151.

Spring has historically been the busiest time of year for the real estate market. Maybe it’s the brighter weather, greener earth or the sweet smells of blossoms blooming that stir a desire to move. Whether you are buying or selling your home, there are several ways to spring clean your finances to help improve your credit or help you get a better interest rate on your mortgage.

Consider refinancing your student loan debt.

Student loans can have high interest rates, and are frequently set up on a repayment plan based on your current income. In the case of an income-based plan, you are normally paying interest (and maybe not all the interest you accrue on a monthly basis). Some loan programs require a bank to count a percentage of the student loan balance toward your monthly debt if there is not a scheduled payment showing on your credit report. This percentage is typically more than your required payment, which increases your debt-to-income ratio and can potentially cause you not to qualify. Amortizing your loan and setting a specific repayment time will pay your student loans off over time and may boost your credit as you pay down the balance instead of it increasing due to unpaid interest.

Lower your debt-to-income ratio.

Your debt-to-income ratio is an important factor in mortgage qualification. If you have multiple credit cards payments or high interest loans, your monthly payments can be quite high. If you are able to consolidate your credit card debt or loans into one payment and lower your overall monthly cost, then you can lower your debt-to-income ratio as well.

Limit credit inquiries.

When you apply for credit, e.g. credit card or loan, the lender generally does a hard inquiry or “hard pull” on your credit. These hard inquiries may hurt your credit score, especially if you allow several of them within a short time span. When you are shopping for a mortgage, the inquiries from banks or mortgage companies made within a 14-day period should only count as one hard hit. This should not affect your credit score dramatically. It is when you are applying for a variety of credit types (car loan, furniture store, credit card, etc.) in a short time that it may hurt your credit score.

In contrast, when you check your own credit score, it is considered a soft inquiry and does not affect your credit score.

There are many ways to improve your credit, but most are going to be situation dependent. A trusted mortgage lender will be able to help you and offer guidance on how to improve your credit score. This may take a few months to a year, or it could be as quick as a few weeks depending on your personal circumstance.

Opinions expressed above are the personal opinions of RCB Bank personnel and meant for generic illustration purposes only. With approved credit. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. Some restrictions apply. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. 

Imagine your retirement fund as the seat of a stool. Its stability depends on the construction of the legs. Put all the weight on one leg of the stool and you risk a wobbly future. Instead, use multiple funding sources to build a sturdier retirement savings plan. Depending on your desired lifestyle, we suggest saving between 10-20% of your salary to fund your retirement. Use this balanced approach to diversify savings.

First Leg: Employer Plan

If your employer retirement plan offers a match, fund this account up to the full match if not more. If your employer does not offer a match, you will want to contribute more money toward this account.

Second Leg: Social Security

Social Security benefits can vary drastically depending on how long you work, the amount you earn during your highest earning years and when you elect to claim your benefits. The generation retiring now is receiving about 35-40% of their former salary in the form of Social Security benefits.

Third Leg: Personal Savings

This may include savings accounts, IRAs, CDs, investment accounts and your home’s equity. While it is possible to build a solid three-legged stool, you may want to reinforce your retirement fund with a fourth leg.

Fourth Leg: Retirement Income

Income may be in the form of a rental property, part-time job or small home-based business. However you go about it, you have to sit on your retirement stool, so make it is sturdy enough to hold you during your retirement years. Find a wealth advisor you trust to help you plan a retirement savings strategy built for your individual lifestyle goals and needs.

Save now. Save often. Your future self will thank you.

We offer free portfolio reviews at no cost, no obligation. We’d be happy to take a look at your current portfolio and offer a second opinion to ensure you’re getting the most out of your investments.

Connect with an RCB Bank Trust Wealth Advisor in your area.

Invest in your retirement. RCBbank.com/GetFit

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. Investment products are not insured by FDIC or any government agency, Not a bank guarantee, Not a deposit, Subject to risk and may lose value.

A mortgage is one of the most expensive and long-term commitments you will make in your life. So how can you both save money and take years off your loan? It’s actually pretty simple. If you pay just a little extra on your mortgage each month or year, you will owe significantly less over the life of the loan.

Although most borrowers know their home is a valuable asset, they often don’t consider how much interest adds to their overall cost. Your mortgage is amortized, meaning you pay regular installments on principal and interest over the specified period of time. Every time you pay your mortgage, interest costs decrease and the principal increases. If you pay nothing extra on the mortgage, the total amount you owe over the life of the loan will not change. However, pay a little extra and you can take years off your loan and save thousands of dollars in interest.

Let’s look at this closer. If you get a 30-year loan for $250,000 and it accrues 4% interest per year, you will end up paying $179,674 in interest over the life of the loan. This is a big number, but one you can reduce by budgeting some extra money for your mortgage.

Using the example I’ve just described, the monthly mortgage payment is $1193.54 per month. If you can make one extra mortgage payment per year, you can save over $28,000 in interest over the life of the loan! Make it a Christmas present and pay a little at a time or make one lump payment at the end of each year. Paying just a little extra on your mortgage is the gift that keeps giving.

The more knowledge you have about the mortgage process, available loan options and your individual qualifications, the more satisfying your homebuying experience will be. Connect with a local RCB Bank lender to get answers to your lending questions. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.  The monthly payment calculation expressed above is not for any specific loan type and is meant for generic illustration purposes only. For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply. Equal Housing Lender, Member FDIC. RCB Bank NMLS #798151.

If you are preparing to buy or refinance a home, take a look at your VA Loan option, which offers lower out-of-pocket financing than traditional lending options. Here are five benefits of VA Loans.

No. 1. 100% Financing

The U.S. Department of Veteran Affairs (VA) guarantees this loan, allowing you  to finance the entire purchase price of the home. Nearly all conventional and FHA loans require the loan-to-value to be below 100%.

No. 2. No Monthly Mortgage Insurance Costs

Most loans with less than a 20% down payment require you to pay for a mortgage insurance premium (for FHA loans) and private mortgage insurance, commonly referred to as PMI, for conventional loans.

While there is no monthly mortgage insurance, there is a one-time funding fee, which ranges from 1.5% – 3.3%, based on your eligibility and down payment. You may also be exempt from the funding fee if you were awarded a service-related disability.

You are also able to roll your funding fee into the loan to help keep your out-of-pocket expenses lower at closing.

No. 3. More Flexible Underwriting Standards

A VA Loan is the only loan that does not require student loans deferred over  one year to be included in the debt–to-income ratio, which is used by lenders to determine how much you can afford to borrow. Also, a VA loan allows for higher debt ratios than other loans like FHA, conventional and rural development.

No. 4. You Can Have Two VA Home Loans at a Time

VA does allow you to purchase another home if you are choosing to move prior to selling your current VA-financed home. It depends on how much entitlement you have left from the previous purchase and the loan limits in the area where you are buying your new home. Your mortgage lender can help you calculate your entitlement and qualification.

No. 5. VA Jumbo Option Available 

In most counties today, the maximum loan limit for conforming conventional and VA loans is $484,350. However, there are certain counties where the VA maximum loan limit exceeds $484,350; these loans are known was VA Jumbo loans. These amounts are current as of the time of writing this article. Most Jumbo loans require 20% down payment; however, VA loans do not. Depending on your eligibility, you may be able to pay a 10% or less down payment.

You can learn more about eligibility requirements at www.benefits.va.gov. Search VA home loans.

When it comes to obtaining a VA Loan, you want to work with a qualified VA mortgage lender.  RCB Bank is proud to offer a VA loan benefit to our active duty service members and veterans. We can help you determine your eligibility and what you qualify for. Plus, once you start the loan process, we’re here to walk you through start to finish.

Connect with a local RCB Bank lender to get answers to your lending questions. Give us a call or visit our online Mortgage Center.

Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only.  For specific questions regarding your personal lending needs, please call RCB Bank at 855-BANK-RCB. With approved credit. Some restrictions apply. Equal Housing Lender, Member FDIC. RCB Bank NMLS #798151.

There is a lot of incorrect information out there that may persuade you not to pursue getting a home. Before you run in fear, talk to a lender first about your concerns, so we can help you know what is truth or myth.

Myth #1: You have to have a 20% down payment in order to get a mortgage – WRONG.

There are many down payment options. For instance, if you are a veteran, or buying in a rural location, you could potentially get into your new home with little to no down payment.

Several first-time homebuyer loan options start with a 3% down payment, and Federal Housing Administration (FHA) offers financing options starting with a 3.5% down payment.

With all of these down payment options, homeownership may be more BOOlievable than you think.

Myth #2: Being Pre-Qualified is the same as being Pre-Approved – WRONG.

Pre-qualification is based on un-verified information. This is an initial look at your application to make sure there are no major red flags that may prevent you from getting a mortgage. For example, a pre-qualification may use an estimate of your credit score and compare your income with your debts to see if you can support a mortgage payment. The pre-qualification process is quick and is based on information you provide to your lender. A pre-approval is a more extensive process where the lender uses verified information (e.g., your credit report and pay stubs) to determine which mortgage you actually qualify for.

Without a pre-qualification or pre-approval, home shopping may become a frightfully batty experience.

Myth #3: Shopping around for lenders will hurt your credit – WRONG.

Multiple inquiries can hurt your credit, but FICO allows for rate shopping by grouping all similar inquiries made within a 30-day timeframe as one hard-hit. This allows you to shop around as long as it is within 30 calendar days.

When shopping lenders, be sure to ask what fees they charge, what the interest rate and annual percentage rate (APR) are, and if you aren’t putting 20% down, what is the cost for private mortgage insurance (PMI).

Don’t be spooked by misinformation about mortgages. Talk to a lender and get the truth. I’m here to help you have a FANGtastic homebuying experience, even if you are not an RCB Bank customer. Connect with a local RCB Bank lender to get answers to your lending questions. Give us a call or visit our online Mortgage Center.

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