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What Is a Home Equity Loan?

What Is a Home Equity Loan?

Two people shake hands over a home loan contract, which sits next to a clay model house.

Building equity in your property is an essential part of getting the most out of homeownership. Equity is the difference between the value of your home and the amount you owe on your mortgage. Unlike other assets that may fluctuate in value, your home’s equity tends to increase over time as you pay off your mortgage and as your property appreciates.

One of the best ways to leverage the equity in your home is through a home equity loan. While these words may make you feel a bit anxious, Landmark National Bank is here to help you feel comfortable and confident about equity financing. In this blog, we’ll provide a concise explanation of what a home equity loan is and how it works, as well as the many potential benefits it offers homeowners.

Home Equity Loans: The Basics

A home equity loan is a type of home loan that allows homeowners to borrow against the equity they have already built up over the years in their home. It’s also known as a second mortgage, as it’s secured by the equity in your property, much like your first mortgage.

Home equity loans may have fixed or variable interest rates, fixed repayment terms, and predictable monthly payments, making them a reliable and accessible way for homeowners to access cash or consolidate debt. It’s important to note that in order to qualify for a home equity loan, you must have established a significant amount of equity in your home.

Benefits of Home Equity Loans

One of the primary advantages of taking out a home equity loan is that it usually offers lower interest rates compared to credit cards or personal loans. This is largely due to the fact that the loan is secured by the equity you have built up in your home, making it less of a risk for lenders compared to an unsecured loan. On top of that, the interest payments you make on a home equity loan may be tax-deductible, which adds another layer of financial benefit for homeowners. Be sure to consult a tax advisor to learn more about the eligibility for a deduction.

Another benefit of home equity loans is the flexibility and range of options they offer. You can use the loan funds for a wide variety of purposes, whether you need to finance home improvements, medical bills, or even college tuition.

Home Equity Loans vs. Opening a Line of Credit

It’s important to note that home equity loans differ from a home equity line of credit (HELOC), which is a revolving line of credit that works more like a credit card. With a HELOC, you can access the funds as you need them and have the option to only pay interest on the amount that you’ve borrowed during the term.

On the other hand, a home equity loan provides you with a lump sum of cash upfront, which you will need to repay over a predetermined period. Both options have their own set of pros and cons, and it’s important to weigh them carefully before choosing the option that suits your needs.

A couple and their child walk happily outdoors on a sunny day in front of their house.

When Should I Get A Home Equity Loan?

When is it appropriate to consider a home equity loan? If you have significant equity in your home and need to access cash for a major expense, a home equity loan may be an attractive option. You’ll be able to cash out, refinance, and take the next steps.

For example, you might be considering a home renovation project, want to consolidate high-interest credit card debt, or need to cover the cost of a medical emergency. Home equity loans can provide access to significant amounts of cash that you can use at your discretion, making them a popular choice for both first-time homeowners and those with more experience.

Understand the Details of Your Loan

It’s important to understand the terms, interest rates, and repayment options associated with your home equity loan to ensure that it’s the right financial decision for you. It’s also essential to work with a trusted and reputable lender to obtain guidance and support throughout the loan application and repayment process. The friendly team of experts at Landmark National Bank has the knowledge and resources necessary to help guide you every step of the way.

Secure a Home Equity Loan from Landmark National Bank

A young woman smiles as she signs a document on a clipboard with her husband next to her and a professionally-dressed woman across the table

A home equity loan can be an excellent financial solution for homeowners who have built up significant equity in their property. It’s a reliable, accessible, and affordable way to access cash when you need it most, and is often a better option than a HELOC or credit card. By understanding how home equity loans work, their benefits, and potential drawbacks, you can set yourself up for financial success now and into the future.

At Landmark National Bank, we’re committed to providing our clients with financial expertise and personalized solutions. Whether you’re looking to take out a home equity loan or explore other financing options, we’re here to help you achieve your financial goals. Find the closest location to you or give us a call to get started today!

The Benefits of Home Ownership

The Benefits of Home Ownership

A man writing on a notepad while holding a model of a house

Buying a house is a massive commitment, but it comes with many benefits. If you’re considering buying a home, especially if it’s your first time, consider how these benefits may impact your financial portfolio and daily life.

Building Equity in Your Home

Monthly rental payments only cover the cost of living at a residence but have no real investment in the long run. One of the biggest financial benefits of home ownership is that when you pay your monthly mortgage, you’re compounding small portions of ownership in your home.

By the end of the loan period, you’ll own the home outright and be able to reap the investment benefits with the sale of the house.

Combat Inflation

If you have a fixed-rate mortgage, the price you pay for your home won’t change when the economy fluctuates. Whereas rent will increase with inflation over time, your housing cost will always remain the same.

Adjustable-rate mortgages also come with a maximum rate, giving security for the maximum potential you’ll pay. With the rental market, that same consistency is not guaranteed.

Strong Credit History

A portion of your credit score is tied to the amount of time you’ve had certain lines of credit open. As long as you’re making your mortgage payments on time, your credit score will benefit from this line of credit. Ultimately, a good credit score can help you qualify for a better rate on loans for a car, home remodel, or other large purchases.

Control and Responsibility

It can be frustrating to have your home life dictated by a landlord. You can be limited in how you can decorate, stuck waiting on repairs, and plagued with noisy neighbors. With home ownership, you have far more freedom to make your living space truly yours. This freedom also builds a sense of responsibility and pride in your house, as well as stability and community in your area.

Partner With a Top Home Loan Lender

Buying a home is an often intimidating and confusing process, but it helps to work with a neighborhood bank that can help you through the process. Landmark National Bank is a top home lender with individualized guidance to help build a mortgage that works best for you — all at a competitive rate.

Get started at Landmark National Bank by applying for pre-qualification online, or connect with a home loan specialist near you today!

Your Guide to Buying a Home in Kansas

Your Guide to Buying a Home in Kansas

The state flag of Kansas blowing in the wind

In a housing climate that feels uneasy, it’s time to make sure you know all the ins and outs of how to buy a home. If you want the financial benefits while fulfilling all the necessary requirements, it’s time to consider the process of getting your new home in Kansas today! Buying a home might seem overwhelming, but the moment you go to an open house and envision yourself with the keys will be the moment you find the drive to pursue owning a home. Landmark National Bank wants to provide you with the information and some simple steps to make the process that much easier.  

Financial Factors To Consider When Buying a Home 

The first thing to consider before buying a house is ensuring you are aware of the property taxes and the cost of living in Kansas. Having a budget is necessary, and maintaining it means learning about the varying financial factors. 

Cost of Living in Kansas  

Overall, the cost of living in Kansas is lower than the national average of 100 by 12%, making it a wallet-friendly state. Using the city of Wichita, Kansas as an example, it is 31.17% lower than the cost of living in New York City. 

Property Taxes in Kansas  

Property taxes in Kansas average about 1.34%, according to the Tax Foundation, which is slightly above the national average. Taxes are based on the value of the property, which is determined by the county appraiser, meaning there could be an adjusted property tax depending on where you live in Kansas.  

Consider Home Owner Programs 

A man works at a laptop with a piece of paper and a pen in his hands 

After becoming aware of the financial factors to consider, a homeownership program can help first-time buyers purchase their first home. A homeowner program in Kansas can assist in the initial down payment process making owning a home more affordable. There are a number of programs to choose from that can fit varying needs.  

  • Home Possible: Recipients of this program may obtain fixed-rate mortgages with a term of up to 30 years for one-to-four-unit properties, condominiums, manufactured homes, and planned united developments. 
  • Kansas Housing Assistance: For eligible applicants, you can apply for a low-interest loan and receive up to a 5% grant for cash assistance on a down payment or closing costs. 
  • Federal Home Loan Bank Housing Assistance Program: This program is structured towards low-income households, and helps to finance purchases, construction, and rehabilitation.  

Great Locations to Live in Kansas  

After the financial factors are settled, the homeowner programs are considered, then making a decision on location is the next matter. Kansas has several metropolitan areas that are family-friendly and popular for buying a home.  

If you’re considering moving to Kansas, it’s important to research the areas you could live in. If you want more of an art scene, maybe excellent healthcare, potential academic opportunities, or possibly an opportunity to work in agriculture, Kansas has a variety of cities to pick from. Here are a few favored options. 

  • Topeka: The capital city of Kansas, Topeka has a lower cost of living compared to other cities in the state with a population of 125,000 people. 
  • Overland Park: The 2nd biggest city in Kansas has the scenic Indian Creek Trail, live country music venues, and family friendly community making it popular among young families.  
  • Lawrence: The University of Kansas is based in the city of Lawrence, filling it with a vibrant area that has a strong cultural scene, arts, shops, bars, and restaurants.  
  • Wichita: The largest city in Kansas, Wichita has a growing economy that includes fields such as aviation, healthcare, and agriculture, which makes it a great city to settle down in for professionals.  
  • Manhattan: With a population of 50,000, Manhattan, Kansas is a smaller city housing Kansas State University, and maintains a strong community with excellent academic opportunities.  

The Process of Buying a Home in Kansas 

Two professionals shaking hands over a clipboard in front of two model houses 

Now that you have the information that will play a role in buying a home, it’s time to go through the process of how to buy a home. Read these general steps to help you understand all the necessary components. 

  1. Apply for a home loan. It’s important to get approved so you have an idea of your budget for a home. 
  2. Get a real estate agent. An agent will help you find properties that fit your needs and budget.  
  3. Begin searching the housing market. Once you have your budget and your agent, you can make an informed decision on pricing, sizing, and condition with varying properties.  
  4. Get an inspection. Once you’ve found your home, it is important to identify potential issues for the future, and if you’re committed to something you might have to fix later on.  
  5. Send in an offer letter with the help of your real estate agent. Your agent will help draft a letter outlining the purchase price, contingencies, the closing date, and possibly the earnest money deposit. He or she will then send the letter to the seller’s agent.  
  6. The escrow period. Escrow (closing on a home) is the final step. Once your offer is accepted, a third-party agent will hold and manage the funds for both parties involved until the conditions of the transaction are met. An agent will place the funds in an escrow account while all of the conditions of the sale are verified before closing on the home. You will then walk through your home, sign the documents, and get your keys. 

Get Your Home Loan at Landmark National Bank 

You’ve got all the information you need, and now it’s time to apply for a home loan to buy your house in Kansas. As a top home loan lender, Landmark National Bank can provide you with your home loan. You can give us a call or find your nearest Landmark branch for more information about home loans and find out if you qualify.

Should I pay off my mortgage early?

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

Should I Pay Off My Mortgage Early?

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

Renovating Your Home On A Budget

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

4 Benefits of Refinancing Your Home

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!