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Should I pay off my mortgage early?

a couple high fives while sitting at their kitchen table doing calculations and looking at their computer

So you’ve bought a house? Congratulations!

With a purchase as big as a home, you may be feeling mixed emotions. Chances are, you’re now very aware of your spending and the bills you have, with lots of questions running through your mind about your new home.

One of the most commonly asked questions we receive is, Should I pay off my mortgage early? There are a few factors to consider when making this decision. Thankfully, we are here to help answer all your mortgage-related questions.

What is a mortgage payment?

First, understand what making a mortgage payment means. Typically, a mortgage payment is split between the principal and the interest of the loan. Interest accrues the entire time you have the loan, so you can end up paying thousands more than what the loan is for.

By paying off your mortgage early, you are accruing less interest on the principal.

Early Mortgage Payments

So when should you focus on making early payments on your mortgage?

Since contributing more money than expected to your mortgage payments will increase the amount you spend in a month, the first step is to make sure you can afford it.

The second step is to consider your other savings accounts and debts. Do you have an emergency fund already saved up? Do you have other loans with much larger interest rates? The decision to pay off your mortgage early depends heavily on the answers to these questions.

Having an emergency fund that is equal to about 3-6 months of your household expenses is important in case of unforeseen circumstances such as unemployment, hospitalization, or natural disaster.

Other loans that might have higher interest, such as credit card debt or student loans, may require more attention sooner than your mortgage. Forgetting these loans and only focusing on your mortgage could end up costing more money in the long run, thanks to high interest rates.

If you’ve paid off other loans and have a sizable emergency fund, though, paying off your mortgage early might be right for you!

Chip Away at Your Mortgage

Consider switching your payments to be bi-monthly or make one extra payment per year. This can drastically change the number of years it will take to pay off that loan, thus reducing the costs accrued from interest.

Curious just how much you could save? Use Landmark National Bank’s helpful Quick Rate Calculator tool to determine your options.

Still have questions? Contact us at Landmark to answer all your questions regarding home loans, interest rates, and mortgage payments. Our helpful online tools can help you determine what loans you need and how to get them.

4 Home Renovation Ideas on a Budget

a couple is looking over a notebook and calculator with their home being renovated behind them

It’s no secret that owning a home can be an expensive undertaking. Whether you’ve recently bought a first home, are considering refinancing a home you’ve owned for a while, or remodeling your home, there are a lot of areas to consider.

But the biggest thing on your mind is probably finances.

How do you make any of these home renovations in the most budget-friendly way possible? Thankfully, your friends at Landmark National Bank can help get you answers to all of your financial-related questions, starting with how you can renovate your home on a budget.

A few simple tips can help you get started on turning your house into your dream home, all while keeping your checking and savings accounts happy

1. Set a Home Renovation Budget and Stick to It

You may just be looking to make some aesthetic changes to your home, or maybe you need to knock down a few walls or vault a ceiling. Either way, make a financial plan before you start any renovations. Make sure your plans fit into your budget and that you have enough saved up to make the changes you want to make to your home.

Once you know you can financially support the renovations you want to make, create a detailed plan for how much you will spend on each project. Do ample research and plan to spend a few more dollars than what you’ve budgeted. Home renovation projects are notorious for taking more time and money than ever planned, so it’s best to err on the side of caution when it comes to budgeting for a home renovation.

2. Use What You Have for Your Home Renovation

One of the easiest ways to save money on your home renovations is to repurpose what you already own. Do you really need new cabinets for your kitchen, or can you repurpose the ones you have with a coat of paint or a new color of stain? Can you recover the cushions on your couch, or do you need to shop for brand new ones? Would putting in a fun accent wall spice up the living room, or does every wall have to be wallpapered?

Take stock of what you already own and what items can be found around your home before you buy anything new. Even small changes can make a big impact in the look and feel of your home.

3. Buy What You Don’t Have Second-Hand

Once you know exactly what you need to renovate your home, hold off on going straight to your local hardware store and take a detour to your local second-hand store. You never know what donated items you’ll find in the shelves of a thrift store.

Items such as light fixtures, wall decorations, small pieces of furniture, or even tiles and carpets can be found for much cheaper at a second-hand store than brand new. If you’re renovating during the summer months, local garage sales and estate sales are great places to scout gently used items that are perfect for home renovation (and for staying within budget).

4. DIY Home Renovation is your BFF

The rule of thumb when it comes to renovations? It’s typically less expensive to do something yourself than to hire someone to do it for you. Try your hand at sanding and staining your cabinets or putting up a new backsplash. You’ll find plenty of step-by-step resources and videos online to walk you through how to complete a project or, at the very least, provide some additional inspiration.

You should know and set your own limits, though. If you lack the skills to do a bigger home renovation project on your own — like knocking down a wall, installing electrical wiring, or retiling your bathroom floor — don’t be afraid to ask for help. Just make sure you shop around for the best deals and the best craftsmanship before you start the project.

Manage Your Home Renovation with Landmark National Bank

If you want to make renovations but aren’t sure your budget can support it, consider a home equity loan or line of credit or potentially refinancing your home. The experts at Landmark National Bank can offer any assistance you need in making this decision.

Contact us today or visit your local Landmark National Bank branch for help with all your banking needs!

4 Benefits of Refinancing Your Home

a couple sits at their kitchen table looking over bills and a calculator

If you’re thinking about refinancing your home, it’s important to first do your research and weigh the pros and cons of refinancing. While there are a few disadvantages to financing your home, the pros usually outweigh the cons and can actually help you out in other areas throughout your home in the long run.

At Landmark National Bank, we’re committed to educating our customers about everything that comes with home loans and home ownership. Here are four benefits of refinancing your home mortgage and how to decide if it’s the right choice for you.

What does it mean to refinance your home?

When you refinance your mortgage, you’re essentially trading in your current home mortgage for a brand new one. It’s very similar to the home buying process and usually takes 30 to 45 days. Refinancing your home is an excellent way to leverage your investment and comes with many benefits that help you out in the long run.

Benefits of Refinancing Your Home

1. Shorten Your Loan Term

Most home mortgages start with a 30-year home loan. When you refinance your home, you are able to change your loan term to a 15- or 20-year fixed-rate mortgage. Shortening your loan term can help you pay your loan off faster and can help you save money on interest rates over time.

2. Lower Interest Rates

One of the main reasons homeowners choose to refinance is to get a lower mortgage interest rate. When you applied for your original home loan, you might not have had the best credit score or the value of your home may have been lower at the time. If your credit score has increased, if the value of your home has increased, or if the mortgage market is simply better now than it was before, you may be able to reduce your mortgage monthly rate when refinancing.

3. Lower Monthly Payments

With a lower mortgage interest rate comes lower monthly payments. With all the money you save from your mortgage payments, you can build your savings accounts, pay off other debts, prepare for retirement, and more.

4. Cash-Out Options

When you refinance your home, some borrowers have the option to cash out and have access to some of the money earned from your home’s equity. You can essentially use this money for whatever you need. Most people use these funds to send their children to college, pay off large debts and expenses, or pay legal fees.

One of the most common ways borrowers use cash-out funds after refinancing is for home improvement projects. With the extra money, you can make repairs and renovate your home, which may ultimately increase the value of your home in the end.

Drawbacks of Refinancing Your Home

After considering all the benefits that come with refinancing your home, it’s also important to note some of the drawbacks. One of the most significant drawbacks is the refinancing costs. Because you’re basically taking out a new home mortgage, you’ll have to pay the same closing costs and fees you paid the first time you took out a mortgage for your home. In general, expect to pay anywhere between 2 and 6 percent of the amount you borrowed.

Another drawback is the possibility of a lower credit score. Your credit takes into account the length of your credit history, so when you refinance, you’re changing that length. You might see a hit to your credit score when you refinance.

Finally, refinancing your home can take a lot of time. If you’re looking for a fast solution, refinancing may not be the best option for you.

Refinance Your Home with Landmark National Bank

When you’re ready to refinance your home or need advice on whether refinancing is the best decision for you, Landmark National Bank is here to help. Our associates are always available to talk through the refinancing process and provide you with the tools you need to be successful. Visit a mortgage lender at a Landmark National Bank near you to get started today!

How to Decide If You Should Rent or Buy a House

Hand holding wooden block with text message Rent or Buy and wooden house, on wooden desk office. Save money and buy house concept.

The question of whether to rent or buy has plagued potential homeowners for decades. On the one hand, renting gives you the flexibility to move often, and your landlord handles maintenance. On the other, homeownership allows you to build equity while freely transforming a house or condo into your ideal living space.

You’ll have many factors to consider when asking if you should rent or buy a house. We’ll help you sort through key considerations affecting the decision to rent or buy a house.

Should I rent or buy a house?

If you do a financial health check and find everything is in order, it might be time to buy an actual house. Having the following in place means buying a home could be a good decision for you and your family:

  • You have three to six months of living expenses saved
  • You have enough money set aside for a down payment of 10 to 20 percent
  • Your job is relatively secure, or you could easily land a job that pays as well or better
  • Your mortgage payment, HOA fees, homeowners insurance, PMI, and property taxes add up to a quarter or less of your take-home pay

Planning for job loss, illness and other catastrophic events will help ensure that you can afford your new home while enjoying life and saving for the future.

Other Rent or Buy Considerations

Giving your money to a landlord can feel like throwing it away. After all, you’re not building equity in a home that’s all yours. And you can’t make major changes to your home without running them past your landlord. But renting can be beneficial under these circumstances:

  • You might need to move in the next few years
  • You aren’t able to keep up with a lawn or major home repairs
  • You don’t have enough saved for the down payment and other expenses
  • You owe a lot in student loans or haven’t paid off consumer debt

Taking all these factors into consideration is a must.

Look Ahead to Decide if You Should Rent or Buy

Having a big-picture view of things will help you make an informed decision. While the financial considerations are essential, it’s also important to answer these questions:

  • What is the cost of renting vs buying in your area?
  • Do you like the area enough to put down roots there?
  • Will your job require you to relocate in a few years?
  • Do you want to do any long-term traveling in the next few years that will require you to leave your home for months at a time?

If you have younger kids, area schools will play a major part in your decision—not just now, but for the next decade or so. If imagining yourself and your family in the same place for many years to come leaves you with a good feeling and the numbers add up, buying there makes sense.

Find out if You Should Rent or Buy with Landmark

The rent vs. buy calculator from Landmark National Bank takes some of the guesswork out of the homeownership question. Our friendly mortgage lenders can also help you determine whether the time is right to buy. Visit a mortgage lender at a Landmark National Bank branch location near you today!

How to Save for a House While Renting

A model home sitting on a desk with text that says "How to Save for a House While Renting."

If you’re a renter who dreams of homeownership, you’re probably aware of all the twists and turns on the road to buying your first home, especially in recent years. COVID-19 and inflation are just a few factors contributing to the increasingly expensive and competitive housing market in the United States.

While finding and buying a home requires dedication and a positive attitude, it’s not an impossible task. Learn how to save for a home while renting with helpful tips from Landmark National Bank!

Use Your Mortgage Options to Create a SMART Goal

Smart goal word cloud with words over white office table background.

 Every journey needs a destination, and homeownership is no different. You can certainly think of owning a home as your destination, but between working, paying bills, having hobbies, and spending time with loved ones, it’s easy to lose sight of a general goal like homeownership.

We recommend using the “SMART goal” technique to stay on top of your goal of owning a home. A SMART goal exhibits the following traits:

  • Specific—What are you trying to accomplish?
  • Measurable—Quantify your goal so that you can track your progress.
  • Achievable—Give yourself a reality check and confirm you can achieve your goal.
  • Relevant—Identify the “Why” behind your goal.
  • Time-bound—Create a time frame to help yourself focus on your goal.

A SMART goal about homeownership looks something like this: “I will save the amount of money I need for a down payment by setting aside $500 each month for 12 months.”

The community you’re looking at, the type of house you want, and your credit score will affect the time frame and dollar amount you use for your homeownership SMART goal. Landmark National Bank has a valuable you can use to create your SMART goal: our Quick Rate Calculator. Not sure if you should rent or buy a house? Dive into our Home Rent vs. Buy Calculator.

These financial calculators provide a quick and easy way to gauge your options for a mortgage. For more accurate insight, you can also find a Landmark National Bank mortgage lender near you to discuss the home loan process.

How much down payment do I need in Kansas?

Your down payment amount depends on several factors. The home loan process for a three-bedroom home in Topeka, for example, may look quite different from the process for a starter home in Overland Park. Find your nearest mortgage lender to discuss the best course of action for homeownership in your community.

How to Save for a House While Renting: 7 Tips

Female real estate agent offer homeownership to young couple.

Until you have the chance to talk to a Landmark National Bank mortgage lender, you can still work towards your goal of homeownership! We’ve gathered our best ways to save for a house while you rent.

1. Open a Savings Account for Your Home Fund

The first step is having a place to put your hard-earned money for that future home! Open a savings account at Landmark National Bank; our personal savings accounts are designed to help you reach your goals. If you’re not sure which account type is best for your situation, reach out to our helpful team.

2. Create a Budget

We can never say enough good things about a well-planned budget! Budgeting is important for many reasons. In addition to helping you plan for big purchases, such as a home, it can aid you in avoiding debt and overspending. Learn how to make a budget plan from scratch and determine how much you should spend on housing with the help of Landmark National Bank.

3. Calculate Your Debt Management

Student loan payments and credit card debt can slow down your journey toward homeownership. If you have the means and commitment to eliminate your debt sooner, use our Snowball Debt Elimination Calculator. We’ll help you learn to properly manage or accelerate your debt payments.

4. Develop a Side Gig

If you have a knack for knitting, painting, or other crafts, consider turning your hobby into a side business. You can even use playing video games to earn money through live streaming on platforms like Twitch.

5. Save Your Tax Refund

You may be tempted to splurge your tax refund, but consider putting it into your down payment fund. Even if it isn’t a large amount, it can still help push you a little closer to your goal.

6. Adjust Your Current Living Situation

It may require more commitment than our other tips for saving for a house, but renting an apartment or house with roommates is an effective way to save money. Whether it’s with friends, family, or your significant other, sharing the cost of rent gives you the option to set aside more money for a home in the future.

7. Apply for an Assistance Program

As we mentioned earlier, the road to becoming a homeowner has gained a few hurdles in recent years. At Landmark National Bank, we’re happy to help you work toward owning a home through our home loan options. Ask your local mortgage lender about first-time home buyers programs, USDA loans, and more.

Explore Your Mortgage Options with Landmark

At Landmark National Bank, we’re dedicated to helping our friends and neighbors throughout Kansas work toward homeownership and other financial goals with our financial products and services. Explore our financial calculators or contact a Landmark National Bank mortgage lender near you to learn about becoming a homeowner today!

Wondering if you should buy a house? Do a financial health check.

The text "Wondering if you should buy a home? Do a financial health check." over an image of a house and stethoscope.

Thinking of taking the plunge into homebuying? Whether it’s for the first time or you’re ready to transition to a new house, it’s important to review your financial health. If you jump in without taking the proper considerations, you run the risk of making a hasty decision that compromises your long-term goals, budget, or overall financial wellbeing.

Buying a home is a big decision, but we’ve gathered some tips to help you determine when to buy a house, financial items you need to consider, and more.

Important Questions to Ask Yourself Before Homebuying

Purchasing a house means spending a lot of money and signing your name on many legally binding documents. Before you do all of that, you owe it to yourself to ask several important questions:

  • How much house space can I afford?
  • Am I willing to take out a loan?
  • What’s the most I can drop on a down payment?
  • Is my preferred neighborhood affordable with good home values?
  • How close is the house to work, school, the gym, etc.

The above questions should act as your baseline for determining if it’s the right time (and the right house) for becoming a homeowner. Take the guesswork out of determining your answers with the help of Landmark’s Quick Rate Quote calculator. Once you have solid answers to each of these, you can proceed to the first step of the home buying process.

Review Your Check Credit Score

As far as your financial health is concerned, your credit score is the first thing to consider when buying a house. If you decide to apply for a loan, your lender will run a check on your credit score. Before this happens, review your own credit report to make sure there won’t be any kickback during the loan process. If you find any errors during your review, dispute or settle them immediately, or your homebuying process may end before it starts.

Figure Out When You Want to Buy

There are pros and cons to looking for new homes at different times of the year. Due to better weather conditions and a larger variety of homes to choose from, spring and summer are the most popular times to buy or sell a house.

However, if you’re on a budget, there’s a sweet spot at the end of autumn and early winter where the prices typically drop in response to a less active market. Hectic holiday schedules and cold climates make moving unappealing to many people, but less competition means you may have better chances of finding an affordable home.

Obtain Pre-Qualification

Unless you intend to buy your home outright with cash, you’ll need to get a loan from a bank. That’s why receiving pre-qualified before buying a home is critical. By being pre-qualified for a mortgage, you can streamline the financing process for a new home and make an offer to the seller sooner. If you wait to get qualified for a mortgage, you may miss your chance to bid on a property before it’s snatched up.

While the previously mentioned credit check is a part of receiving pre-qualification, there are many more financial aspects a lender needs to consider. Common financial items you’ll need to provide for pre-qualification include:

Your Income

You’ll need to prove you earn enough income to make your monthly payments in the form of income statements, like W2s, 1099s, rental income, tax returns, etc. Existing assets, like bank statements and retirement accounts, can also help.

Existing Debt

Any debt you currently owe can impact your ability to make monthly payments, which is why your lender needs to know about it. This includes monthly expenses like student loans, credit cards, and other mortgages.

Your Financial Record

You’ll also need to provide records of bankruptcies and foreclosures. A lender will find these during their background checks, so it’s best to be open about any issues in your record. By addressing them as soon as possible, you can better anticipate any complications they may create for your loan qualification.

Your Current Expenses

It’s important to take into account your current rent, child support payments, alimony payments, and any down payment gifts. Once you have pre-qualification, you can begin your home search in earnest, confident that, assuming no dramatic change occurs, you are capable of paying back the loan on any house within your pre-qualified price range.

Explore Home Loans with Landmark National Bank

While a financial health check may take time and effort, carefully measuring your income, expenses, and other factors can help you better determine if you’re ready to commit to a new home. In the event that you’re ready to buy a home, explore your home loan options with Landmark National Bank.

From conventional loans to USDA loans, we offer a wide range of programs for prospective homebuyers. Find a Landmark National Bank branch location near you and discover the home loan that’s right for you today!

How does a USDA loan work, and do I qualify for one?

A rural home with the text "How Does a USDA Loan Work" superimposed over it.

It’s no secret that purchasing a home is an expensive and time-consuming process. There are costs at nearly every step of the way—not to mention the fact that homes are simply not cheap. That’s why it is so important to get an affordable loan.

A USDA loan could be your ticket to an affordable loan and the home of your dreams—if you and the home you’re interested in qualify, that is. What is a USDA loan? How do you qualify for it? What are its benefits? And how do you apply? Here at Landmark National Bank, we’ve got all these answers for you and more.

What is a USDA Loan?

A USDA loan is a home loan guaranteed by the United States Department of Agriculture. Being backed by the government allows USDA loans to have lower interest rates and lower down payment requirements than conventional loans.

Other government-backed loans include VA loans and FHA loans, which are backed by Veterans Affairs and the Federal Housing Administration, respectively.

USDA loans are available to fewer people than other government-backed loans due to relatively stringent restrictions. Borrowers and the homes they are purchasing must qualify for the loan separately.

Additionally, since USDA loans are intended to assist those in more rural areas, they are not eligible in most urban and suburban areas. You can view location eligibility on the USDA website.

What are the Benefits of a USDA Loan?

The USDA loan enjoys multiple benefits over other loan types thanks to its stringent requirements and government backing, which allow lenders to offer highly competitive loans and terms that can’t be matched with other loans. Some of the main benefits include:

  • Little or no down payment—Guaranteed USDA loans do not require a down payment. While this results in higher monthly payments, it lowers the initial bar for homeownership.
  • Low credit score requirements—Applicants with a credit score of 640 or higher qualify for automatic approval via the USDA’s automated underwriting system.
  • Refinancing eligibility—Loans can be refinanced into a USDA loan, thereby potentially lowering your monthly payment.
  • Low and fixed interest rates—USDA loans are available with low and fixed interest rates that vary by lender.

Do USDA Loans Have PMI?

No, USDA loans do not require private mortgage insurance, or PMI, as PMI only applies to conventional loans. However, USDA loans do have two types of fees that function similarly to PMI.

The first is called an upfront guarantee fee, which equals 1 percent of the total loan amount. The second fee is called the annual fee, which equals 0.35 percent of the loan amount. The upfront fee is paid at closing and is rolled into the loan amount, while the annual fee is calculated once per year and then divided into monthly payments along with other monthly costs.

These fees are levied no matter if you pay 0 percent down or 20 percent down. However, these fees are usually cheaper than PMI attached to a conventional loan.

How to Qualify for a USDA Loan

Should your would-be home reside in a rural area that is eligible for a USDA loan, you’ll still have to meet other requirements in order to qualify for a USDA loan. There are requirements for both applicants and the property itself. Additional requirements may also be implemented by each lender that offers USDA loans.

USDA Loan Requirements for Borrowers

  • Income—Applicants will not be considered if they exceed 115 percent of the home location’s median household income.
  • Citizenship—Applicants must be a U.S. Citizen, non-citizen national, or Qualified Alien.
  • Creditworthiness and Income—Applicants must be creditworthy and have the ability to pay the mortgage, and must supply evidence (IE employment history, payment history, etc.).

USDA Loan Requirements for the Property

  • Purpose—Properties purchased via USDA loans must be used as a primary residence.
  • Accessibility—Properties purchased via USDA loans must have direct access to a street, road, or driveway.
  • Utilities—Properties purchased via USDA loans must have functioning utilities, including wastewater disposal.

How to Apply for a USDA Loan

Applying for a USDA loan is easy. To find out additional information about the USDA loan and to see if you can qualify, you can contact your local USDA Rural Development field office for more information.

Additionally, for residents of Kansas and Missouri interested in securing a USDA loan for a purchase of a rural home, you can simply contact your local Landmark National Bank location. Our dedicated loan and mortgage officers will work directly with you to help you determine if you and the home of your dreams qualify for a USDA loan. Even if that’s not the case, we can help you with other home loans at competitive rates.

Homeownership is the American dream, and it’s achievable with the help of the right financial institution. Landmark National Bank is here to help.