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.

Home Improvement

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 You can also replace outdated fixtures such as the sink and bath tub faucets to add a fresh touch.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 Kenneth Wohl 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. Kenneth Wohl NMLS #453934.

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Create a Savings Plan

Three ways to save for the future.

create a savings plan

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.

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Understanding Closing Costs

Closing costs can be a surprise, as they are more than most buyers expect, especially first-time homebuyers.

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 Kenneth Wohl 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. Kenneth Wohl NMLS #453934.

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Success in Partnership

When banks tailor their products and services for business owners, they can be a powerful tool.

Waitstaff welcoming guests

“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.

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How to Get a Mortgage with Student Loan Debt

Even if you have student loan debt, there are viable paths to homeownership.

door mat with moving boxes

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. Feel free to call me at 405.608.5291 or email me at kwohl@bankrcb.net.

Opinions expressed above are the personal opinions of Kenneth Wohl 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. Kenneth Wohl NMLS #453934.

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Talk To Your Teen About Credit Cards

Help prepare them for their financial future, and Start The Conversation Today.

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 Originator Kenneth Wohl. “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.

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How to Get a Mortgage when you are Self-Employed

Just because you're self-employed doesn't mean you can't get a mortgage.

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.

I am here to help, even if you are not an RCB Bank customer. Feel free to call me at 405.742.4871 or email me at jpenny@bankrcb.net.

Opinions expressed above are the personal opinions of Alex Penny 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. Alex Penny NMLS #1535836.

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Benefits of Online Banking

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 be available immediately. 2Some fees and restrictions apply. Ask us for details. 3Message, data rates, and fees 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. 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. 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.

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How to Finance a Home Renovation or Construction

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.
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Buying a Foreclosed Property

If you are considering buying a foreclosed property, it is good to familiarize yourself with the process.

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 Kenneth Wohl and meant for generic illustration purposes only. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Kenneth Wohl NMLS #453934.

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How to Stretch your Money

Look for areas where you can cut costs.

Reduce Expenses

It’s a good habit to annually review your monthly expenses, looking for areas where you can cut costs. Start by discontinuing unused memberships/subscriptions. Call your cable, phone and insurance companies and ask for options to reduce your bill. Compare prices of other companies or consider alternatives like pre-paid phones or streaming services. Reduce utility expenses by adjusting your thermostat a few degrees. Unplug electrical items when not in use and reduce the number of days you water the lawn.

Reuse Stuff

Use less. Save more. An easy start is to ditch disposable items. Clean with rags rather than paper towels or cleaning wipes. Use reusable water bottles and dishes instead of buying bottled water and paper plates. Look for creative ways to repurpose common household items. Save glass jelly jars or clear plastic containers to organize your kitchen, office or craft room items. Cut up your old t-shirts for cleaning rags. Grab those Easter eggs and use them as handy snack containers. Find more money-saving ideas online.

Rethink Spending

Rethink your purchase decisions. Start by making a list and sticking to it. Consider paying with cash. And bring only the cash you need, so you’re not tempted to splurge. Before grocery shopping, plan out your meals, check your cabinets for what you already have and buy only what you need. Use coupons and avoid impulse purchases. Choose off-brand items. They’re made the same but without an expensive label.

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

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3 Ways to Teach Kids Good Money Habits

kids with hands raised

Spend, Save and Share Jars

Many parents teach their kids the value of hard work by paying them for chores. You can take this a step further by talking about what they can do with their hard-earned cash. Get three jars and add the label spend, save and share to the jars. Then sit down and talk to them about where they want to put the money and how much in each jar. This is also a great way to learn how to count change.

Budgeting for Groceries

Before you go to the grocery store, make a budget and shopping list of the items you need. Then have your kids guess the cost of different items. When you get home, compare the receipt with your shopping list and discuss the differences. This is also a great chance to teach kids the difference in price between name brand and generic items. Make a list of items and have your kids look online to find out how much money they can save by choosing generic items over name brand products.

Needs and Wants

Discuss the difference between needs and wants. In order to survive, you have needs. Food, water, shelter and clothing are examples. Wants are things you would like to have, but aren’t always necessary. Take this a step further by taking a large white sheet of paper and writing “needs” at the top of one column and “wants” at the top of the other. Then have your kids cut out images from magazines and grocery advertisements and put them in one of the two columns. Afterwards, you will have a visual to discuss their choices. There are gray areas, so be prepared to tell your kids why cookies are a food, but that doesn’t make them a need.

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

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3 Ways Your Mortgage Rate is Determined

Understanding how these three factors can help you better understand mortgage interest rates and the home buying process.

Interest rates for a mortgage are not as simple as you might think. There are ways to impact your interest rate such as a good credit score, money for a down payment or a shorter loan term. However, there are factors that depend on the current market and are simply out of your control.  When a loan is fixed, or doesn’t adjust, for 15 – 30 years, a lot of factors are considered and priced into the interest rate. Some factors that may impact your rates include inflation, the Federal Reserve and the value of Mortgage Backed Securities.

Inflation

Inflation has a large but somewhat predictable impact on mortgage interest rates. Banks have to price in the interest rate for inflation so they can make money over the life of the loan. When inflation is rising, so are mortgage rates. If the value of the dollar is lower, it decreases the buying power of the dollar. Rates then go up to compensate for that difference. Inflation has been low for the last decade and has caused mortgage rates to be historically low. In times that the inflation rate is lower, you will typically see interest rates lower.

The Federal Reserve

The second thing to remember is that the Federal Reserve does not set mortgage rates. The Federal Reserve, commonly referred to as “The Fed” raises and cuts short-term treasury rates based on changes in the economy. These rates impact the rate indexes used by some to price credit card interest rates, some car loans and lines of credit. Mortgage rates are also generally impacted by the economic market and the Fed’s fiscal policy.

Mortgage-Backed Securities

Mortgage-Backed Securities are also a factor in determining mortgage interest rates. Mortgage-Backed Securities are a bundle of loans grouped together and sold from the bank that originated them. Banks sell loans for a profit and use that money to make new loans. Once the loans are sold, investors buy and sell them on the open market. What investors are willing to pay for these Mortgage-Backed Securities impacts mortgage rates. When a lot of Mortgage-Backed Securities are purchased, mortgage interest rates are typically lower. When demand is lower due to other investment opportunities, mortgage interest rates may rise.

Understanding how these three factors can help you better understand mortgage interest rates and the home buying process. 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 Alex Penny and meant for generic illustration purposes only. Qualifications and other restrictions apply for loans with approved credit. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Alex Penny NMLS #1535836.

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How to Build Wealth: The Power of Time

At 25 years, a stack of zero coins. At 35 years, a stack of 5 coins. At 40 years, a stack of 37 coins.

Compounding is a powerhouse tool when it comes to building wealth. When you put money into an investment account, you earn a varied rate of return on the balance. If you leave your money in the account, it can grow. An RCB Bank wealth advisor can help you plan a savings strategy built for your individual lifestyle goals and needs.

Example #1: College Savings

The Jones and Smith families each have a baby and start saving $150 per month for their child’s college education. The Smith’s use an investment account to build more wealth.

With no annual return, the Jones' had $10,800 after six years, $21,600 after twelve years, and $32,400 after eighteen years with a kid going off to college. With a 6% annual return, the Smiths had $12,960 after six years, $31,344 after twelve years, and $57,422 after eighteen years with a kid going off to college.

Example #2: Retirement Savings

Kyle Jones and Kelly Smith put $400 per month into their retirement accounts and earn the same rate of return. Kelly started saving at age 25 while Kyle waited until he was 35 to start.

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

When it comes to investing, there are risks. Consult a financial advisor before beginning any investment plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. The monthly interest calculation expressed above is not for any specific account type and is 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. Wealth advisors do not provide tax, legal or accounting advice. Seek advice of professional tax consultant.
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RCB Bank Makes Dreams Possible

The value of relationship banking.

John Price is a tire guy. He’s been hauling, stacking, setting and buying tires since 1988 when he joined his brother at a tire facility in Tulsa. He later moved north to work for a local tire shop in Claremore, but he always wanted to own his own shop.

After 30 years in the business, an opportunity presented itself. A tire shop down the road was looking to sell. The owner hoped to sell his family business to someone who would keep it a mom-and-pop tire shop.

“When I had the idea to buy, I went to Matt [Mason, market president, RCB Bank] to bounce my idea off of him,” John said.  “I wanted to know if it was even possible. Matt helped me be realistic and talk through potential complications.”

“My job as John’s banker is to help him read between the lines of what he wants and needs in order to mitigate risk and identify the unknowns,” Matt said. “I ask the questions he may not have even considered so he can create a business plan that covers as many variables as possible.”

RCB Bank’s core values are relationship, community and boldness.

“Building relationships and knowing my customers play a big part in helping me help them,” said Matt. “A name and a story are better than a number in the system. It builds integrity, trust and comfortability.”

“Matt never made me feel like I was asking a dumb question,” John added. “He listened and we had an open and honest discussion about what I needed and how I was going to get there. Matt more or less provided me with what the bank needed to move forward.”

Matt calls it helping people get bankable.

“Some people come in with an idea, but they may not have the liquidity or cash flow to qualify for the financing they need,” he said. “It may not mean they don’t have a good business plan or the potential, so I work with them to show the path to get them there.”

Helping the community thrive has been the driving force behind RCB Bank since opening day in 1936 when founder L.S. Robson brought together a team of local citizens to finance the Bank so it could help local citizens keep their farms afloat and their businesses operating during the Great Depression. They made bold moves to lend money because they knew a person’s character, not just their account balance, was worth investing in.

Banking has more rules and red tape than it did 80 years ago, but building a relationship still plays a big part in banking.

“It doesn’t just help us, it helps our customers, too,” said Matt. “If a customer knows us, they’re more likely to come and ask questions, like John when he had the idea to open a shop. He was not sure it was possible and instead of talking himself out of it through fear or reservation, he came and talked to me. And we were able to help make his dream attainable.”

Today, John Price is the proud owner of Price 66 Tire & Auto in Claremore on old Route 66 at 1304 N. J.M. Davis Boulevard.

John and Matt’s relationship did not end after the loan was complete. Matt checked in often in the beginning to make sure John was doing okay. Now, the two catch up whenever they run into each other in the community, at the shop or at the bank.

“Matt makes himself available,” John said. “I trust him, knowing he cares about my success.”

“Our success is measured by the success of our customers,” Matt said. “If we help you reach your financial goals then we’ve done our job. Our employees are easy to get to know. We want you to feel comfortable discussing your business and banking matters with us, so I invite you to stop by and get to know us.”

Pictured above: John Price, owner of Price 66 Tire & Auto, with Matt Mason, RCB Bank Claremore market president.

Lending services are subject to credit approval. Some restrictions apply. RCB Bank is an Equal Housing Lender and Member FDIC. NMLS #798151, Matt Mason NMLS #799316

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4 Ways to Boost the Profit of your Tax Refund

This year, choose to stash your cash for your future self with one of these investment tools.

Your tax return is a powerful tool to boost your financial well-being. This year, choose to stash your cash for your future self with one of these investment tools.

529 Education Savings Plan

Whether you are going back to school or saving for your kids, a 529 Education Savings Plan is a great way to invest your tax return.
Even grandparents and guardians can start a plan and give their loved ones the gift of reduced education costs. Not only is the investment growth tax deferred, both Kansas and Oklahoma offer tax breaks on contributions.

401(k) Plan

If your workplace offers a 401(k) plan, you should contribute regularly. If they match your contributions, invest at least up to the maximum match amount. Don’t pass up free money for your retirement savings. You can also contribute significantly more money to a 401(k) per year than with a traditional or Roth IRA. For instance, in 2020, the 401(k) contributions increased to $19,500 per year if you are under 50 and $26,000 if you are over 50.

Traditional IRA

A traditional Individual Retirement Account (IRA) offers similar tax-deferred advantages as workplace plan. Your contributions are often pre-tax dollars and may be tax deductible. Another advantage is tax free growth. This means once you put the money in the account, your earnings will not be taxed until you withdraw money in retirement. There are certain minimum distribution requirements, meaning you have to start taking money out starting at 72 or there are penalties.Traditional IRAs currently have $5,000 and $6,000 limits respectively.

Roth IRA

This is one of the most powerful retirement savings tools because your money can grow tax free. You will pay taxes when you put money into your account, but your earnings and withdrawals are tax free, as long as certain requirements are met. There are also certain conditions in which you can pull money out of your IRA and avoid the 10% early withdrawal penalty. This includes if you withdraw money because of a disability, are a first-time home buyer or if the withdrawal is made by a beneficiary after your death. Another perk is you are not required to take minimum distributions from your Roth IRA during your lifetime, as you are with a traditional IRA. This makes a Roth a powerful legacy investment.

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. Wealth advisors do not provide tax, legal or accounting advice. Seek advice of professional tax consultant.

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Three ways to Prepare for the Spring Real Estate Market

Spring clean your finances to help improve your credit or help you get a better interest rate on your mortgage.

Large Home

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.

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 Alex Penny and meant for generic illustration purposes only. Qualifications and other restrictions apply for loans with approved credit. RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Alex Penny NMLS #1535836.

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A Balanced Approach to Funding Your Retirement

Use multiple funding sources to build a sturdier retirement savings plan.

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.

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Retirement Planning Life Stages

No matter what stage of life you are in, your current and future financial well-being should ALWAYS be in your plans. Taking full advantage of your workplace retirement savings options plus utilizing the help of a professional wealth advisor can help you build enough resources to enjoy the retirement lifestyle you want.

Baby Boomers: Born 1946-1964

You are at or nearing retirement age. Boomers are breaking boundaries and re-defining retirement for the generations to follow.

  • Have you accumulated enough assets to comfortably supplement Social Security?
  • Do you know how long those assets might last?
  • Are you confident you are managing your investments to preserve what you’ve built?

Generation X: Born 1965-1980

You have limited time left to accumulate sufficient assets for retirement. The temptation to raid your retirement savings to help fund your children’s college or to provide care for aging parents may be very real for you.

  • Do you understand the costs of this decision?
  • Do you need help prioritizing your financial obligations?
  • Are you saving enough now to generate the income you will need for 20-35 years of life in retirement?

Generation Y: Born 1981-1996

Retirement seems far away and may not be on your radar. Statistically, your generation saves better than the one before. But, your mobility often causes small repeated cash-outs from retirement accounts as you move from job to job, leaving little savings as the years go by.

  • Time is on your side if you take advantage of it now.
  • Aim to save a minimum of 10% (including your employer’s contribution, if available, and any IRA’s or other plans).
  • Provide for your future self by including retirement savings in your current budget.

Generation Z: Born 1997-Present

You may not have the obligations of a mortgage or children. This puts you in a prime position to build your retirement nest egg.

  • The sooner you start saving, the longer your money has a chance to grow with compounding interest.
  • Aim to put at least 5% away for retirement.
  • Don’t be tempted to cash out your retirement account if you switch jobs.
  • Make retirement savings a necessary expense in your budget.

Investment products 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 principal amount invested. The information provided is for educational purposes only and does not constitute tax, investment or legal advice. Consult a professional wealth advisor to discuss your individual retirement savings needs.

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Extra Mortgage Payments: The Gift that Keeps on Giving

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.

Extra Mortgage Payments

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. Kenneth Wohl NMLS #453934.

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VA Loan Offers More Than $0 Down

To all United States service members, veterans and spouses, thank you for your service and sacrifice to our nation.

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. Kenneth Wohl NMLS #453934.

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The Truth on Three Spooky Mortgage Myths

With Halloween around the corner, here are three spooky myths about getting a mortgage.

mortgage myths

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.

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. Alex Penny NMLS #1535836.
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Home Appraisal Guide

One of the most important aspects of getting a mortgage is the appraisal.

Mortgage appraisal— a professional opinion of a property’s market value, determined by a licensed appraiser.

An appraiser will visit the property and examine the interior and exterior of the property. They will take pictures, measure rooms, note upgrades and examine other aspects of the house for functionality. Once they finish looking at the property, they will research similar homes through various assessor databases and local real estate portals.

Appraisal guidelines protect consumers. Lenders are required to give you copies of all appraisal reports and other written valuations. If you have questions, talk to your lender. Open and honest communication will help you better understand the mortgage process.

May I choose my appraiser?

No. Your lender must request the order. Lenders, realtors and appraisers must follow Appraiser Independence requirements to ensure the appraisal is fair. You can read the guidelines on Fannie Mae’s website, fanniemae.com.

Why are appraisals important?

An appraisal is important because it provides you with valuable information about the property so, as a buyer, you do not pay more than the home is actually worth. It can also play a big role in determining the amount of money you may borrow when purchasing or refinancing your home.

I got a home inspection; do I still need an appraisal?

Yes. The home inspection does not replace an appraisal and vice versa. A home inspection is an in-depth, objective examination of the physical structure and major components of a home. A home inspector will not determine the value of the home; they help you assess potential risks that may affect your investment.

How long before I receive my appraisal?

Appraisals can take anywhere from a few days to a few weeks to complete due to many variables that may affect the time frame. For instance, during the peak of real estate season, it may take longer due to the backlog of requests. Rural, luxury or complex properties also take more time to complete based upon availability of comparable sales data.

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.

Invest in yourself. RCBbank.com/GetFit

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. RCB Bank is an Equal Housing Lender and Member FDIC. RCB Bank NMLS #798151. Kenneth Wohl NMLS #453934.

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The Value of a Banking Relationship

How building a banking relationship can help your business.

How often do you connect with your banker?

Whether you are a new or seasoned business owner, building a relationship with a banker can help you tremendously, says business owner Jesse Jones, JJS Fleet Repair, speaking from experience.

Jesse has been a diesel mechanic for 15-plus years. Last year, he decided it was time to start his own company. After opening an account at RCB Bank, he was connected with Eddie Curran, business services manager, who became his main contact during his startup and continues to stay in regular contact.

“Eddie has been a life saver,” Jesse says. “For a first-time business owner, the financial part was scary. He helps me by being available to answer my questions, choose the right business services and direct me to the right people.”

“I am his personal concierge,” Eddie chimes in. “It’s my job to take care of his banking needs so he can take care of his customers. When he needs help, I hook him up with the right person. I also help him identify financial issues or possible needs he may not be thinking about.”

Ripple Effect:

The customer tosses a rock into the water. He wants to start a business, build a house or invest for retirement. He is focusing on the rock.

“I focus on the ripples the rock creates,” Eddie says.

“A customer is often focused on their present need, an account for example, but I’m looking six months or a year down the road and anticipating his future needs – cash management services, a new work truck,” he says. “It’s not about selling products. I’m servicing needs. And, when his needs change, we’re ready.”

 

business owner Jesse Jones shaking hands with market president Garrett Chaney

Jesse with Garrett Chaney.

 

Like when Jesse was ready to purchase a work truck, Garrett Chaney, RCB Bank market president in Bartlesville , stepped in to help.

“Open and honest communication is the key to a successful partnership,” Garrett says. “Early on when Jesse switched from being a consumer customer to a commercial customer there were some growing pains, but he knew I would keep his interests at the forefront. By explaining why we should do things a little different for his commercial business, he became comfortable with the nature of business banking.”

“I may not always like what I hear at first,” Jesse says, like when Garrett said he needed to have his work truck on a shorter-term loan to avoid negative equity in case he needs to replace it in a few years due to his high driving volume. “After mulling it over, I understood where he was coming from. I knew he was helping me dodge a potential loss.”

When it comes to a bank, Jesse says it is not about one product or service he likes most. It is about a bank that helps him improve his business by helping him manage his finances so he can focus on servicing his contractors.

“My bank helps me by just being available for my needs as I continue to grow,” Jones said. “I enjoy being able to pull up to the drive-thru and they know me and my family by name. I can call them and know that whatever my need, they’ll take care of it.”

How well do you know your banker? Call them and start building that relationship today.

Have questions? We are happy to answer them, even if you are not an RCB Bank customer. Connect with a business services representative in your area.

Invest in yourself.
RCBbank.com/GetFit

This article is published in Value News, August 2019 Issue, valuenews.com.
Feature image: JJS Fleet Repair owner Jesse Jones and wife Erin with RCB Bank Business Services Manager Eddie Curran (L) and RCB Bank Bartlesville Market President Garrett Chaney (R).
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, pricing and fees for your personal situation. Call us at 855-BANK-RCB, RCB Bank is an Equal Housing Lender and member FDIC. RCB Bank NMLS #798151. Garrett Chaney NMLS #1182931.
Eddie Curran

Eddie Curran

Business Services Manager
300 W. Patti Page Blvd.
Claremore, OK 74017

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3 Ways to Finance Vacation Property

With loan rates still low, now may be time to buy

Vacation home lake front mountains

When I take a family vacation, I typically rent a home versus a hotel for the home-like atmosphere and amenities. This has me wondering why I don’t invest in my own vacation property. With mortgage rates still near historic lows, now may be the time to buy property in your favorite vacation destination.

Since government loan programs (FHA, VA, USDA) are not available for second home financing, let’s look at other options for financing vacation property.

Cash-Out Refinance

Cash-out refinance involves refinancing your primary residence mortgage and receiving cash for the remaining equity. You need sufficient equity in your home for this to be an option. For example, if you owe $100,000 on your home worth $500,000, you may be able to cash out up to 80% loan-to-value (LTV), which would be $400,000 minus the $100,000 you owe. This leaves you with $300,000 in cash to purchase your vacation property. You can choose term options from 10-30 years fixed or adjustable, plus you’ll have one monthly payment, not two.

Home Equity Line of Credit (HELOC)

HELOC involves attaching your loan to your primary residence. Typically, this loan will not pay off your current mortgage, but be a second lien adding to your monthly expense on top of your current mortgage. Depending on the lender, this loan may go to a LTV higher than 80%, which helps if you need more funds than what 80% will allow. The drawback is this type of loan is typically adjustable and at a higher rate than today’s conforming loans.

Conventional Financing

Conventional Financing obtains a loan on your vacation property, not your current primary as discussed in the prior two options. The loan process is similar to purchasing a primary residence with small differences in minimum down payment and reserve requirement. Second homes require at least 10% down. The lender will need to verify you have sufficient funds for closing and between 2-6 months’ worth of reserves to cover both your primary and second home loan payments.

Defining a Second Home

There are specific requirements for defining a second home, e.g., needs to meet minimum distance requirements from your primary residence, or located in a recreational area, such as a lake or ski resort. Fannie Mae’s second home requirements are:

  • Occupied by the borrower for some portion of the year
  • Restricted to one-unit dwellings
  • Suitable for year-round occupancy
  • Borrower must have exclusive control over the property
  • Must not be rental property or timeshare arrangement
  • Cannot be subject to any agreements that give a management firm control over the occupancy of the property

Purchasing a second home in the same city where your child is going to college does not qualify as a second home; it is defined as an investment property, which has stricter guidelines and higher down payment requirements.

Scouting a Second Home

One way to start scouting for a second home is to find a real estate agent who is familiar with your desired location. They can fill you in on weather and traffic patterns, help you evaluate the location and amenities of a property and provide information about comparable sales, resale prospects and long-term property value.

Before you start your search, talk with a lender so you know upfront what you can afford and your specific financing options.

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.

Invest in yourself. RCBbank.com/GetFit

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. Kenneth Wohl NMLS #453934.
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