The Credit Scoring Mystery

?????????????????????????????????????????How your credit score is calculated is like the secret formula for Coke –  the average consumer doesn’t really know!

However, FICO has provided five categories that are considered when determining a credit score.

Payment History: 35%
Length of Credit History: 15%
Amount Owed: 30%
Types of Credit: 10%
New Credit: 10%

What follows is a short synopsis of each category:

Payment History – Notice that this category holds the most weight. It looks at late payments. Thirty days late is not as significant as 60 to 90 days late. It also looks at the last time the payment was late—the more time that passes, the better. They also consider how many times a payment has been late. Let’s say you’ve made 56 payments on time, with only one of them being late — that has less impact than if you’ve made 56 payments and 12 of them were late.

Length of Credit History – While the percentage is on the lower end of the scale, it still matters. They consider when you first started using credit, the number of accounts and how long you’ve had them. If you’ve just started using credit, it’s possible to still obtain a good credit score, but everything else has to be positive.

Amount Owed – If there are high balances or credit cards have been “maxed out,” the credit scoring formula figures that it is a greater risk and the credit score will be lowered. As a side note, closing a credit card account – or paying an old collection – that currently has an outstanding balance can actually HURT your credit score.

Types of Credit – This is one of the areas driving credit score confusion because the scoring models do not reveal what “mix” of credit helps or hurts a credit score. Typically, they are looking for auto loans, the number of mortgages loaned, installment loans and credit card accounts, and whether those are “balanced” versus having 5 car loans and no credit cards.

New Credit – Opening new accounts is not a bad thing, but it may hurt a credit score if a person applies for a lot of credit in a short period of time. They consider how many accounts were applied for, how many new accounts were opened, and over what time period the new accounts were opened. Inquiries (meaning if you were shopping for the best rate for a car loan and talked with 5 banks, same for a mortgage in a 30 day window) do not have as much impact as if you applied for 5 different credit cards.

If you’d like to know more about credit scoring, visit If you’re thinking of starting the home buying process, we suggest you watch this short video with Madison Loan Officer, John Schroder, for helpful tips on credit reports and how they can affect the mortgage process.

Posted in Banking, Credit, Loan Officer, Mortgages | Leave a comment

All Credit Scores are Not the Same

????????????????????????????????????????????????????????????????????????????????????????Credit scores are one of those things that has consumers (and sometimes lenders) scratching their heads and saying “How did they come up with THAT credit score?”

The one you hear about the most are FICO scores (acronym for the Fair Isaac Corporation, the creators of the FICO score). It’s the one that most mortgage lenders use as one of the benchmarks to see if you qualify for to refinance or purchase another home. Usually 3 scores are provided and the lender uses the middle score as the basis for granting (or denying) a loan.

However, not everyone uses FICO scores as a guide. Here are some other credit scoring models that are used:

Auto Loans: If you apply for an auto loan thru a dealer, they have developed their own credit scoring models which are completely different from those used by lenders.

Insurance Companies: Your insurance premium you pay for homeowners or car insurance also depends upon the credit score model that insurance companies use. Oh, and it will vary with different insurance companies.

Vantage Scores: If your occupation/employment requires you to be “licensed” (especially in the financial services industry) and one of the requirements to obtain (or maintain) your professional license, Vantage Scoring model software is used.

Free Credit Reports: According to law, you are entitled to one free credit report (per bureau) every year. While it won’t be exactly what lenders see when they order a credit report on your behalf, it will be “in the range” and is a good indicator of what to expect.

You are entitled to one free credit report—PER BUREAU. Go to and you can request one credit report from EACH of the bureaus listed.

A word of caution! Be careful when signing up for offers to provide you with a FREE credit report. If you are asked to enter your credit card number, what you are really signing up for is a credit monitoring service—that may cost you over $300 per year.

Please let us know if you’d like us to review your credit report. We may be able to make suggestions on how to increase your credit score. Sometimes it just takes a little tweaking to increase it by 25 to 50 points.

Posted in Credit, first time homebuyers, Mortgages | Leave a comment


GREATOver the last couple of months, we’ve been asking one very clear and simple question: “What Makes Great Midwest Bank…GREAT?”

From comments and reviews on social media to over 300 completed customer surveys, we’ve received some truly GREAT responses.

  • I have been with Great Midwest Bank for 30 years. To me it is the best bank in Wisconsin. Now if this was not the greatest bank, do you really think l would stay with them all these years. Every one is very friendly and greets you with a smile. GREAT MIDWEST should be everyone’s bank.
  • The staff is always so friendly and helpful. My husband and I actually like going to the bank because we feel like family.
  • GMB lenders are helpful in answering questions, always respond in a timely manner, and give clear explanation to new buyers/customers about their mortgage process.
  • The friendly, personal, and feel-at-home atmosphere that accompanies the professional service we receive.
  • The friendly environment. I needed a loan for my condo and it was accomplished it less than 30 days.

We’re honored and humbled to receive such a positive reaction from our customers. This reminds us of the impact our hard work and dedication has on the lives of others in every Simply…Local community from Chilton to Madison and Milwaukee. We’ve been proudly serving Wisconsin homeowners since 1935 and we look forward to serving many more.

If you know someone that needs assistance in the home buying, refinance, or construction loan process, send them to Wisconsin’s Simply…Local Bank for a GREAT experience.

Posted in Banking, Customers, Just For Fun, Local Bank, What Makes Great Midwest Bank so Great? | Comments Off

Tips for Hosting Thanksgiving

tgivingFrom setting the dinner table to putting up holiday decorations, there is plenty to do this time of year. Planning to host Thanksgiving dinner? Well, then there’s even more work to get done.

Lucky for you, you’ve made it to our blog! Below is a list of five tips you’ll need to host a successful dinner party this Thanksgiving:

  • Set a schedule and start time. Most recommend having guests arrive sometime in the late afternoon. This allows the host all day to prepare for guests and hopefully some of the little ones will have worn themselves out by then. Key word: hopefully.
  • Put down the devices. The holidays are a time to spend together, not looking down at a phone or tablet. Make sure everyone in the family, especially the little ones, knows that Thanksgiving dinner is one of those times.
  • Have a fun game or activity planned that everyone can participate in. Not everyone watches (or likes) football. Often times this will lead to the start of a family Thanksgiving tradition.
  • Before you start carving, let the turkey rest after it comes out of the oven. This is a good time to use the dripping to make gravy, make some mashed potatoes, or warm up desserts in the oven for after dinner.
  • After a long day of hosting, it’s time to kick back and relax. But only for a few minutes, because you’ll soon have to get ready for the holiday shopping season. There’s plenty of time to sleep in 2015, right?

For more tips, visit us on Facebook and follow us on Twitter. We’ll be posting fun, creative, and interesting articles throughout the week.

Have a blessed Thanksgiving!

Posted in Holiday entertaining, Just For Fun, Thanksgiving | Comments Off

How to Shop for a Real Estate Agent that’s Right for You!

???????????????????????????????????????????Buying or selling a home can be exciting.  But it can also be a mixture of fear, anxiety and anticipation because it means a new chapter in your life.

So, choosing the right real estate agent is one of the first things to consider when making a move.

While friends and family may refer a real estate agent to you, recognize that their home buying or selling needs may be different than yours. The Internet is a good way to do your research, but you should only consider it a starting point in your search for a real estate agent that represents your interests.

First of all, there are many intangibles that you’ll need to consider:

  • Is the agent’s personality compatible with yours?
  • Do you sense they are honest and trustworthy?
  • Does the agent have a clear understanding of your objectives and needs?
  • Do they have a list of references?

Here are some additional items for you to verify when shopping for an agent to represent you:

Licensing – While a real estate agent must pass certain tests and must be licensed by the state, you should also check to make sure their license is valid and in good standing. Have they had any complaints filed against them?

Education & Specialization – It’s important that real estate agents continue their education. They can also take courses if they’d like to “specialize” in certain categories of a real estate practice, like “short sales/foreclosures” or “senior housing.” Ask if the person has any educational designations and what areas of real estate they special in.

Local Knowledge – A good agent will have local information at their fingertips, including housing trends, how many houses on the market versus the percent sold, sales price trends, and a list of professionals that they do business with to help make your real estate transaction as seamless as possible.

Experience – While a certain amount of experience is important, it should be only one of the things to consider. Good agents are highly motivated and eager to earn your business in hopes of future referrals.

Posted in Buying & Selling, Customer Service, first time homebuyers, Homeowner Info, Local Bank, Real Estate Agent | Comments Off

Is it Time to Build a Home? Questions to Ask Yourself!


There comes a time in your life when you might ask yourself, “Is it time to build a new home?” It can be a tough decision. Your current home may be “good enough.” Or you look around and there are some things that you would change to make it more livable for you and your family.

Building a home is much more time-consuming than buying an existing home. You’d need to have meetings with the builder. Make inspections. Change things. Pick out cabinets, sinks, countertops, flooring. It could take 6 months to a year.

But, if you truly want the “ideal home,” then consider building. You’ll have to make up your mind to be patient and devote the time it will take for you to work with the builder through the entire process.

And, if you like the home you are living in now but would like to change a few things, you might want to consider “modifying” it. Maybe you would like to add a family room. Increase the size of the garage. Add a second story. Change the kitchen layout or add a fireplace. One of the things to consider is the “market value” placed on your home improvements. Here’s a link to Remodeling Magazine’s website so you can

Whether you decide to buy, build or remodel a home, please contact one of our experienced Loan Officers. We have a variety of products to fit your needs and will help you decide what works best.

Posted in Construction, Dream Home, Homeowner Info, Mortgages, Remodeling | Comments Off

How a Great Real Estate Agent Can Help You Buy Your Next Home

??????????????????????????????????????????????????????????????Over the years, we’ve worked with a few truly great real estate agents that have helped friends and customers through the home buying process.

There are a lot of good Realtors in our communities, but if you’re hoping to work with the best, here are some things to ask your Buyer’s Agent:

  • Will they compare prices in neighboring towns, neighborhoods and subdivisions?
  • Will they honestly give you the pros and cons when you narrow it down to a few properties?
  • Will they immediately recommend properties BEFORE you find them online yourself?
  • Will they explain the purchase agreement and other documents in detail?
  • Will they preview the property BEFORE showing it to you?
  • Will they be on your side when negotiating with the seller?
  • Will they follow up with you after the sale?
  • Will they provide names and phone numbers of people they represented?

Every buyer’s situation is different, so you’ll probably have your own list of questions to ask, but, in general, these will help start the conversation when interviewing real estate agents who will do a great job representing you when you buy your next home.

Oh, and if you would like us to refer a couple of great agents that we’ve have worked with in the past, we encourage you to contact one of our Loan Officers in your area.

Posted in Banking, Buying & Selling, Customer Service, first time homebuyers, Real Estate Agent | Comments Off

Does It Really Help to Round up Your Mortgage Payment?

????????????????Recently, we’ve had clients ask us about how to prepay on their mortgage. Of course, if you have an extra $100 per month, you may just want to add that to your monthly payment.

But there’s another way…by rounding up your mortgage payment.

So, let’s say that your mortgage payment is $957. Consider paying $1000 (or $43 more per month).

Here’s the deal. You probably won’t notice the difference in your day-to-day expenses, but over the lifetime of your loan, the extra money will make a huge difference in decreasing your principal balance and save you interest. Paying an extra $43 per month adds up to $516 per year — which decreases the dollar amount you owe on the loan.

Depending on your interest rate and balance owed, you’ll also save money towards interest payments because the dollar amount of interest that you pay is directly related to your principal balance owed.

There are other ways to prepay your mortgage. You could contribute a lump sum once a year. Or make 13 payments a year (instead of 12).

If you’d like to know the difference that it makes in your mortgage, please contact one of our Loan Officers or for our online calculators click here.

Posted in Banking, Homeowner Info, Loan Officer, Local Bank, Mortgages | Comments Off

Small Remodeling Tips that Pay Big Returns

????????????????????Do you ever watch those “remodeling “ shows on TV?  It seems like they totally gut a room and then spend thousands of dollars and a lot of time turning it into something fabulous.

If you’re not quite ready to go “all in”, we’ve compiled a list of alternative, low-cost ways to get a big bang for your remodeling buck.

  • A new front door – There are lots of styles available. Consider different materials like wood, steel, frosted glass or combinations of all three. Remodeling Magazine says that you can expect a 96% return on your investment.
  • New kitchen appliances – No need to go high-end, but stainless steel and matching appliances will give you an 82% return on your investment.
  • New cabinet knobs/drawer pulls – Low cost, high impact
  • New faucets – Low cost, high impact
  • New kitchen sink – Low cost, high impact
  • Kitchen tile backsplash – Don’t go overboard with fancy tile or colors.  Choose more neutral colors and materials.
  • Re-glaze bathtubs and sinks – It can make a porcelain tub or sink look like new for a fraction of the cost of replacing them.
  • New bathroom light fixtures – Low cost, high impact
  • New bathroom faucets – Low cost, high impact
  • New lighting fixtures in hallway/dining room – You can expect to get an 87% return on investment.

Most of these low-cost remodeling projects cost less than $1,000 and some of them can be completed for under $100.

You also might want to keep this list if you are thinking of selling your home in the future.  It may help you get more money and sell your home more quickly.

Follow us on Facebook, Twitter, Google+, and LinkedIn for more #GreatTips on remodeling and advice on how you can improve the value of your home without it costing an arm and a leg.

Posted in Construction, Dream Home, Homeowner Info, Just For Fun, Remodeling | Comments Off

The Different Levels of Homeowner’s Insurance: What You Need to Know


Most standard homeowner’s insurance policies cover damage to your home for theft, fire, lighting, smoke, frozen pipes, ice or certain types of weather damage. It usually covers you up to a certain dollar amount if someone is injured on your property and decides to sue you.

But, did you know that there are many “levels” and “types” of homeowners insurance? Here are your options:

HO1 – It’s the most basic with limited coverage. It’s also the cheapest, but if you have a mortgage, most mortgage companies won’t accept the limited coverage because it hardly covers anything.

HO2 – Has a lot more coverage than HO1, but still limited reimbursement if you experience a loss.

HO3 – This is the most popular with almost 80% of the homeowners’ policies sold today. This option covers “all perils and all risks” except those that are “excluded” in the addendum.

HO4 – This is a “renter’s” policy and it protects the possessions of tenants living in the home against loss. It usually includes medical and liability coverage for the renter. So if you own a rental property, you may want to advise your tenants about this option.

HO6 – This policy is for those who live in condos. It not only provides for personal property, liability and medical expenses, it covers the inside walls of your unit—which you own.

HO8 – This is for older homes and is similar to HO1. The difference is that it will reimburse the actual cash value of the home.

Shopping for insurance? Contact one of our Loan Officers for helpful information including some local, trusted insurance professionals!

Posted in Banking, first time homebuyers, Homeowner Info, Homeowner's Insurance, Loan Officer, Mortgages | Comments Off

How to Read those Confusing Credit Score Codes

??????????????????????????????????????????????????????????????????????????As part of virtually every credit report that we’ve seen, credit bureaus include a list of “reason codes” with numbers and a short (very short) explanation of what the number means. So if you’ve read a copy of your credit report in the last few years, you’ve probably seen them too.

Let us give you an example of what we mean. Let’s say that your credit report listed a “reason code” of “32.” The short explanation might say, “Balances on bankcard or revolving accounts too high compared to credit limits.”

So, you might be asking yourself — what the heck does that mean?

Well, we want to share with you a website that allows you to type in the “reason code number,” which will give you the details of what it really means and what they suggest you do to improve your credit score.

Let’s go back to the #32 Reason Code—Here are the long explanation comments:

Bankcard accounts include credit cards and charge cards from a bank and are frequently revolving accounts. Revolving accounts allow you to carry a balance and your monthly payment will vary, based on the amount of your balance. You have bankcards or revolving accounts in your credit file with balances that are high compared to the credit limit on the account, which is a proven indicator of increased risk.

Here’s a tip on what to do to increase your score:

Pay down balances on your accounts and keep them below 30% of the total credit limit on that account. Over time this will have a positive impact on your score.

The website is You’ll find videos, FAQ’s and interactive links where you can type in the reason code and the explanations appear.

Please feel free to contact one of our Loan Officers if you’d like our help in interpreting the “reason codes” on your credit report. We may be able to advise you on what to do to increase your credit scores.

Posted in Banking, Credit, Loan Officer, Local Bank, Mortgages | Comments Off


From our Loan Officers to our tellers, it’s no secret that our customers think we’re not just good at what we do, we’re GREAT! Whether it’s handling a complicated refinance or a simple mortgage transaction, we’ve been proudly serving Wisconsin homeowners since 1935 with prompt and reliable service.

 As a result, we’ve been fortunate and honored to receive such positive reaction from customers throughout the state of Wisconsin. Below are a few testimonials that highlight how we’ve made the banking and mortgage experience easier.

 It is our goal each and every day to deliver a GREAT experience to every customer from the moment they walk through the door at any of our nine Great Midwest Bank branch locations. It’s in our name.

You can read even more customer testimonials by visiting our Facebook page or by heading to our website here.

Posted in Banking, Customer Service, Local Bank, Mortgages, Testimonials | Comments Off


(From left to right: GMB President Dennis Doyle, Live Mortgage Free winners Pete and Connie Swanson, and Hartland Loan Officer Matt Gaulke)

Stunned, sitting in complete and utter silence, Pete Swanson just couldn’t believe it. Our Hartland Loan Officer, Matt Gaulke, had just called him with some incredible news: he and his wife Connie would be LIVING MORTGAGE FREE for the next six months!

The timing could not have been better. Pete and Connie recently purchased a new home in Waukesha for them, their two kids, and dog. Having attended nearby Carroll University together, it felt only natural to find a bigger home in nearby and familiar Waukesha. The couple has already declared their favorite spot in the home as the backyard, which is roughly four times the size of their previous yard.

Having worked with Matt and Great Midwest Bank for the last eight years, Pete and Connie knew exactly what they were getting when applying for their most recent loan: upfront and honest communication regarding cost and rates. In speaking about Matt, who previously helped the couple refinance twice and take out a home equity loan, Pete said, “Matt made the process easy and comfortable just as he has done in the past. It was practically the same.”

Pete said it was hard to imagine winning the TURN THE KEY sweepstakes when he first heard the Great Midwest Bank radio commercial on 1250 AM. Like most people, he never puts too much thought into these types of contests or sweepstakes because “it’ll never be me that wins”. Flash forward a couple months and he’s discovered firsthand that “real people” do win.

The Swanson family will be using the winnings to remodel their kitchen floor and dinette.

Congratulations again on winning our LIVE MORTGAGE FREE sweepstakes, Pete and Connie! We wish you and your family the best in your new home.

Posted in Banking, Mortgages, Turn the Key with GMB | Comments Off

“Our Simply…Local events are just that, Simply…Local”

buckyHow does a Simply…Local Bank stay local? By continuing to be involved in the community, of course! Great Midwest Bank has been active in a variety of local events this past month with plenty more events on the horizon.

Those who attended the Bridal Show Expo in Brookfield and the Mad City Bridal Expo in Madison were able to taste GMB decorated cupcakes from GiGi’s as well as participate in a fun DIY stamp project to highlight their big day. Attendees called the cupcakes “the best treats there” while others said our interactive booth helped make it “one of the best at the show.” Our loan officers helped many brides-to-be and their guests learn about the GMB advantages offered to first-time homebuyers.

A number of our employees competed in the St. Paddy’s Day Dash 5K Run/Walk in Wauwatosa. We were well represented at the finish line as Melissa Zavadil, Matt Gaulke, and Dennis Doyle placed first, second, and third, respectively, in their age groups. This event was a great fundraiser for the GMAR Youth Foundation to promote scholarship opportunities for local children.

Find us at the next event in your town!

  • April 9: Great Midwest Bank’s Employee Walk at the Pettit National Ice Center to Benefit the Milwaukee Habitat for Humanity
  • April 12: Dane County Habitat for Humanity Build
  • April 26: Milwaukee Habitat for Humanity Build
  • May 22: 9 Pin Tap Tournament through GMAR
  • May 24/25: Gift of Wings Family Kite Festival at Veterans Park
  • June 1: Bridal Show Expo in Brookfield (tentative)
  • July 13: Mad City Bridal Expo in Madison (tentative)

Continue to check our Facebook page for these upcoming events and to scroll through our Simply…Local Events album. While you’re there, find out how you can Turn the Key with GMB in order to LIVE MORTGAGE FREE!

The contest runs now until July 31, 2014.  Official Contest Rules at

Great Midwest Bank. Your Simply…Local, Simply…Social bank.

Member FDIC.

Posted in Banking, first time homebuyers, Homeowner Info, Just For Fun, Local Events, Madison, Mortgages | Tagged | Comments Off

Turn the Key with GMB

Turn the Key Whether you believe us or not, warmer spring days ARE on the horizon. With warmer days come many fun festivities and once-in-a-lifetime moments. Your daughter’s first Easter egg hunt in Grandma’s backyard… Mom pinning Johnny’s boutonniere before he poses for Prom pictures on the staircase… aunts and uncles raising a toast at the dining room table in honor of a graduate… Regardless of the celebration, the home always plays a KEY role in these lasting memories.

That is why there is no better time to make a house your home with the help of Great Midwest Bank. Whether you are looking to build your first home, purchase your next home, or refinance your existing mortgage, our loan officers can handle your every need. When you TURN THE KEY WITH GMB, you will also be entered for a chance to LIVE MORTGAGE FREE.

Before you go daydreaming in empty open houses this spring, fill out an online mortgage loan or refinance product application here for your chance to LIVE MORTGAGE FREE. Simply LIKE us on Facebook for contest details and you could win a $100 VISA gift card. One will be given away every month.

The contest runs now through July 31, 2014.

Great Midwest Bank. Your Simply…Local, Simply…Social bank.

Member FDIC.

Official Contest Rules at

Posted in first time homebuyers, Homeowner Info, Mortgages | Comments Off

Wish You Were Here!

Grandparents_Facebook Assets Earlier this week, winter reared her ugly head in Southeastern Wisconsin. You may have already shoveled snow off your driveway or scraped ice off your car. Just thinking about doing that over and over again for the next three (heck- who are we kidding) five or six months kind of makes you want to take a vacation, doesn’t it?

Why not start by taking a permanent vacation from big bank checking? Now through January 17th, when you open a Totally Free checking account at Great Midwest Bank, you’ll be automatically entered to win $1,000 as part of our Wish You Were Here contest. How you use that cash is up to you, but we’re thinking a vacation somewhere warm will sure sound nice come January!

By opening up a Totally Free Checking Account at Great Midwest Bank, you will receive:

  • Friendly customer service at all NINE branch locations
  • NO minimum balance requirement
  • FREE cash withdrawal at any of our 600 ATM locations
  • Access to 24/7 telephone, mobile, and e-Banking options
  • An entry in the $50 Monthly Prize contest 
  • An entry in the $1,000 Grand Prize contest

Already do your checking with Great Midwest Bank? Well, we want to give you a shot at the $1,000 Grand Prize, too! All you have to do is refer a friend who opens a checking account of their own at Great Midwest Bank, and you are BOTH entered to win the $1,000 Grand Prize. Receive multiple entries by referring multiple friends. Each month, we will also select one person to win $50, to be deposited directly into their checking account.

The contest runs now through January 17, 2014.

Official Contest Rules at

Great Midwest Bank. Your simply . . . local, simply . . . social bank.

*Restrictions and Other Fees may Apply/ Member FDIC.

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Tax Credit for First Time Buyers!

Are you – or do you know – a first time home buyer? If so, Great Midwest Bank has a program that will definitely catch your eye. Great Midwest Bank is one of the few lenders offering a Mortgage Credit Certificate (MCC) Program. Mortgage Credit Certificate (MCC) Program is a tax credit available to first-time home buyers here in Wisconsin. The credit is available for both WHEDA and conventional loans. The program provides a special tax credit to qualified applicants which reduces federal income tax liability for as long as they have the mortgage.

Who Is Eligible?

You’ll be surprised to hear that not only first time homebuyers can take advantage of
this great program. Veterans as well as those purchasing in federally designated target area are also eligible. To be eligible, you have to meet the following criteria:

  • Home must be used as primary residence for the life of the loan.
  • Home must be an owner occupied single family, condominium, or a 2 unit that is 5 or more years old.
  • Borrower must fall within the income and purchase price limits.
  • Borrower must be U.S. citizen or permanent resident.
  • At least one applicant signing the first mortgage note must complete a WHEDA approved home buyer education program.

How Does It Work?

Assume a first time homebuyer has a conventional mortgage of $142,500. The interest on the loan for the first 12-months would be about $6,000. If determined eligible for MCC, the applicant could claim a tax credit of 25% of the interest amount paid, or about $1,500, in the first year. This credit would reduce the amount of federal income tax they would otherwise owe when filing their federal tax return. It is the same process for veterans and those buying in the target area; but they can actually claim up to 40% of annual interest paid. It is important to note that any borrower’s annual mortgage tax credit cannot exceed $2,000.00.

Is There A Cost?

Yes, there is a small one-time cost for qualified borrowers. It is $150 for WHEDA loans and $600 for conventional fixed rate loans. However, the benefit clearly outweighs the cost. Using the example above, if the borrower stayed in that home for 5 years they would have already saved up to $7,500!

It is easy to see how beneficial and cost effective this program can be for borrowers that qualify. If you or someone you know is interest contact one of our experienced loan officers. They would be happy to provide you with more information and/or determine if you are eligible.

Posted in Banking, Conventional, first time homebuyers, Mortgages, WHEDA | Comments Off

We’re Getting Divorced…Now What?

Though it’s obviously an emotional process, a marriage that ends in divorce requires careful consideration of the division of a couple’s assets and liabilities. Often, the home is the largest asset and the related mortgage the most significant liability in a marriage. One way to divide the equity in a home is to simply sell it, split the proceeds, and perhaps look to buy a new home if possible.  The other option is to buy the departing spouse’s share of equity in the  property and refinance alone.

So what should be taken into consideration in either circumstance?

Agree in writing on your Marital Settlement. To establish a game plan and negotiate a
Marital Settlement that works, consider discussing your mortgage situation with us by contacting one of our Loan Offers as one of your first steps. Treat it like a pre approval.  And find a real estate agent who can perform an initial assessment of value on your home, regardless of whether you plan to sell or not. Too often we hear from customers after they have already agreed on terms.

Though your marriage need not always be finalized by a court to proceed with a refinance, information pertaining to spousal and child support and division of liabilities is critical. Note, too, that any support payments made to the other party will be viewed as a debt, the same as a vehicle or student loan payment.

As part of your meeting with us, review a copy of your credit reportto check your score and review other liabilities that may need to be split. Credit scores over the past five years have been increasingly important to determine eligibility but also to determine if
additional costs will be incurred.

Refinancing to remove a spouse will require you to qualify based on income, credit scores and equity in the home. We’ll need pay stubs, W2s, tax returns and the Marital Settlement Agreement. Recognize, however, that we’ll usually need a minimum of six months’ history for support payments before it can be considered income for underwriting purposes.

Once you’ve been qualified on income and assets, we will obtain an appraisal to determine the current value of the home. The value of the home will determine eligibility to refinance and may also resolve the equity owed to the departing spouse, though some couples request a separate appraisal outside of the mortgage process to determine value.

At closing of the refinance, the departing spouse will be required to sign a Quit Claim Deed to remove his/her name removed from the property and to protect the credit of both parties. If the departing spouse failed to pay other debts, a lien could be placed on the home. However, while this action takes the departing spouse off the house’s title and leaves it in the one name only, it does nothing to remove their name from the existing mortgage until it is paid off by way of a sale or refinance.

When you’re prepared, the process should be no longer than any other refinance – in today’s market an estimated 45 days. Refinancing after a divorce could be the first step in helping you regain control of your life while also protecting yourself and your credit.

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Should I Buy a Condo?

Buying a condo is a relatively affordable, low-maintenance
alternative to the traditional single-family home.  And – as with all major investments – there are a few key issues to understand before taking the plunge.

One of the most important issues is determining whether the condominium project itself is eligible for conventional fixed-rate financing.  The answers to the following questions, which are part of a standard questionnaire required by most lenders, will help make that determination.  But in reality, they are questions you should consider for your own good as you make the investment in a project:

  1. Is the project finished or are there more planned phases?
  2. If unfinished, how financially strong is the developer?
  3. Are the majority of the units sold or are some vacant and/or rented?
  4. Are the unit owners in control of the Condo Association?
  5. Do sufficient reserves exist to cover future maintenance costs?
  6. Are other owners keeping up with their condominium dues?
  • An established, well-sold project with the majority of units occupied by the unit owners will stand a much better chance of qualifying for long-term, fixed-rate financing.
  •  How many units in the project are rented?  Condo associations will sometimes allow condo owners to rent out their units because they cannot sell them due to poor market and/or lending conditions. Owning a condo that is neighbored by several rental units may negatively affect the average condo unit value.
  • Are there any issues with the building construction and/or maintenance?  Not all
    builders or buildings are created equal. A project with construction issues can be discovered by analyzing the Condo Association’s previous and current annual budgets – and the minutes to their meetings.  An experienced home inspector can also help you to find any building flaws that could ultimately mean higher monthly dues and/or large, unexpected special assessments.
  • Other considerations:  What do the covenants, bylaws and restrictions allow you to do/not do with the unit?   What maintenance do the assessments cover/not cover?  How many special assessments have been levied in the past few years, and what were they for?

Great Midwest Bank offers fixed rate financing for qualified projects and may be able to offer a Portfolio product for those that do not otherwise qualify for secondary market fixed rate products.

Owning a condominium is definitely the right move for some buyers.  But the purchase process requires more homework for you and your lender.

Search for Madison condos HERE and HERE for more Condo Blogs!

Call me at the Office – (608) 827-5152, or Mobile – (608) 609-5191 or email me for more information. Twitter: @simplylocalbank

Posted by John Schroder NMLS ID #967896

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Four Strategies to Avoid Getting Stuck in a “Bidding War”

More often in today’s real estate market, buyers find themselves in an all-out ‘Offer Competition’ when trying to buy their dream home.  They have already done their homework by getting pre-approved, determining what neighborhood they want to live in, and what type of home appeals to them.  But now are staring down 3 or 4 other buyers who are determined to buy the same home.

While offering the most money might seem like the obvious way to win a bidding war, thankfully sellers don’t always choose the highest offer. There are situations where sellers might prefer offers that stand a greater chance of closing and/or that meet some of their other non-financial “needs”.

If you find yourself in an “Offer Competition” here are some tips to increase your chances of winning without adding to the price:

  1. As suggested above, have your lender pre-approve you BEFORE you look for a home, which is almost always required by any good Realtor these days.  You will immediately be ready to make an eye-catching offer to the sellers; one with a very comforting pre-approval letter attached.
  2. Choose a bank whose pre-approval letters are known to be unfailing.  Unbelievably not all pre-approval letters are actually based on the borrowers’ ability to get a loan!  Ask your realtor if your bank is known for issuing trustworthy pre-approval letters, or if it gives a pre-approval letter to anyone that can fog the proverbial mirror.  Further, a Seller often prefers to see a letter these days from a local lender like Great Midwest, as the national banks have had difficulty meeting closing deadlines in many circumstances.
  3. Cash is King. Some buyers are comforted to see a buyer put down a meaningful earnest money deposit.  If you have the cash, consider putting down a larger than normal earnest money deposit.  Which buyer appears most sincere to the seller – the one who offers an earnest money deposit of $500 or the one who offers $5,000?
  4. Meet the sellers “needs”.  You already have your pre-approval letter to
    show the seller you’re serious, so now make your offer irresistible by meeting
    some other undisclosed “need”.  Have your realtor ask if the sellers need a quick close, or if they would like an extra 15-30 days to move out after closing.  That
    might be enough to tip the scales in your favor.

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Call me at the Office – (608) 827-5152, or Mobile – (608) 609-5191 or email me for more information. Twitter: @simplylocalbank

Posted by John Schroder NMLS ID #967896


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