Are You Ready for Homeownership?

Roommates and rent increases eventually get old, so it may be the right time to start thinking about homeownership. Owning a home builds equity, comes with tax advantages, and gives the homeowner control over their living space. Becoming a homeowner comes with great responsibility—financially, emotionally, and practically. Before becoming a homeowner, consider these three factors.

Think About the Motivations

Anyone finding themselves in a situation of buying a home should think about their lifestyle, budget, and long-term plans. For example, if the goal is to travel the world or move across the country, it would be better to work toward those goals instead. It's also wise to consider plans for the home in the event of unexpected life circumstances, such as a surprise job opportunity in another state. Coming up with a plan—such as turning it into a rental property—can help potential buyers feel prepared for homeownership. A loan officer is a great resource for first-time buyers who aren't sure whether to start shopping.

Consider Every Expense

While some people do pay more to rent than they would to own, consider all the costs associated with homeownership. Besides the mortgage payment, property taxes and homeowners insurance, for example, are expenses to owning a home, although they can be built into the monthly payment. Additional costs to consider include neighborhood fees, utility bills, and lawn care expenses. On top of that, homeownership means no more maintenance man to fix the broken A/C unit or repair the roof—those financial burdens are the sole responsibility of the homeowner. Preparing a budget including these costs will help determine if homeownership is the best choice.

Ensure Savings Are Healthy

Speaking of financial stability, a savings account is very important for any buyer. Homeowners should have extra money in case of unexpected situations that may occur. From job losses to illnesses, life happens. Homeowners should have enough in savings to cover the mortgage for several months in the event of an unfortunate circumstance. Failure to do so could lead to unfortunate financial consequences. Anyone not prepared for an interruption in income should meet with a financial planner or continue to pad their savings account until they're better equipped to handle such situations.

Start the Journey With Liberty National Bank

Whether it's your first home or downsizing for retirement, Liberty National Bank can help you prepare for whatever's next on your homeownership journey. As a community bank, we'll treat you as more than just an account in our system. We'll work to understand your specific situation to best help you accomplish your homeownership goals. Visit your local branch at one of our six locations in Central and Northwest Ohio to learn more.

Real Estate Loans 101: Home Equity Loans

If there's one thing every adult knows, it's this: life is expensive. But that doesn't mean that going to college, starting a business, or renovating a home is out of reach without a padded savings account. For many people who own a home, a home equity loan can be a viable solution to cover some of life's major expenses.

What Is a Home Equity Loan?

Often referred to as a second mortgage, a home equity loan offers homeowners a way to borrow against the value of their home in order to remodel, pay for repairs, consolidate bills, or cover other major expenses. To qualify for a home equity loan, a homeowner must have built equity into the house. Equity is the difference between the home's appraised value and the balance owed on the mortgage. For example, if a home is valued at $150,000, and the homeowner owes $50,000 on the mortgage, they have built up $100,000 in equity. The home equity loan allows the homeowner to borrow up to the amount of equity—in this case, $100,000—using the home as collateral. With this type of loan, a homeowner receives a large lump sum of cash upfront and repays it over time through fixed monthly payments.

Isn't That a Home Equity Line of Credit?

Home equity loans and lines of credit (HELOC) are both types of real estate loans, but they aren't the same. While a home equity loan offers a lump sum of cash, a HELOC can be thought of more like a credit card. Instead of a lump sum, it comes with an approved maximum amount the homeowner can borrow against at any time.

Benefits of a Home Equity Loan

The biggest benefit of a home equity loan is that it provides homeowners with one lump sum of cash to cover major expenses, as long as they've built equity into the home. They come with fixed rates, which means payments are predictable from month-to-month. Interest is tax-deductible if the cash was used for home renovations. And good news for homeowners without stellar credit: it's often easier to qualify for these loans than other types of consumer loans since the home itself serves as collateral, according to Discover.

Apply for a Home Equity Loan Today

Whether your kitchen looks outdated or you need a new roof, borrowing against your home's value can be a smart financial decision for many homeowners. Liberty National Bank is a community bank offering home equity loans at a low fixed rate to help local homeowners cover nearly any major expense. Our loan specialists will attempt to help you secure a loan based on your unique circumstances. Call Liberty National Bank at 419-634-5015 and apply for a loan today.

What Banks Look for in Small Business Loan Applications

It takes money to make money, but many entrepreneurs lack the capital to get their business off the ground. Many lenders offer solutions to give small business owners the funds they need to get started, operate, and expand. Not everyone will be approved for a small business loan, but understanding what banks look for when making their decision can help improve an applicant’s chance of approval.

The Game Plan

 Lenders want to be repaid, so they want in on the game plan, including exactly where the funds will go. Applicants should develop a detailed business plan that includes a description of the business and its leadership team, products and services, and short- and long-term goals, plus financial projections backed by a strategy for growth. Supplying the lender with as much information as possible may help build their confidence in granting the applicant a business loan. 

Creditworthiness 

Credit history doesn’t always make or break lending decisions, but most lenders will take the applicant’s creditworthiness into consideration. A solid credit history conveys that a business owner has maintained good relationships with other creditors. Other debt obligations will also be evaluated to assess the applicant’s ability to pay. Those with poor credit histories might consider paying down debt and raising their credit score before applying to improve their chances of 

approval. 

Collateral 

Lenders will also take an applicant’s collateral into consideration when evaluating their loan application. Collateral can be real estate, vehicles, equipment, inventory, accounts, or anything else of value the applicant is willing to lose should they be unable to repay the lender. If the applicant fails to repay the loan, the lender will have the right to seize any of these agreed-upon assets to recoup its losses.

Apply for a Loan Today 

This is not an exhaustive list of everything lenders consider when making a lending decision. However, establishing a game plan, building a solid credit history, and coming to the table with collateral can improve a business owner’s chances of securing a small business loan. If you’re considering starting a new business or expanding your existing one, apply for a loan with Liberty National Bank. As a small community bank with six locations in Central and Northwest Ohio, we take more than just a credit score into consideration. We may be able to help fund your small business and provide you with other business checking services. Call Liberty National Bank at 419-634-5015 or visit a branch near you to learn more.