Jon Rapp & Carmin Hribar, Phelps County Bank

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2 Jon Rapp & Carmin Hribar, Phelps County Bank

3 Banking Relationship Start a Deposit Account - Checking/ Savings Keep Account in good order/ Chex Systems Part of underwriting for loans/internal credit

4 Building Credit Credit effects everything that you do. Employment, loan rates, insurance rates Credit Scores range from

5 Ways to Establish Credit Apply for a small personal loan at your local bank Apply for a loan secured by a savings account or a certificate of deposit Open a credit card but keep a low balance or pay off monthly Get a loan with a co-signer

6 Items that do not report Rent Utilities Insurance Rent to Own accounts Cell Phone Bills (These items will only report if not paid)

7 What can impact your credit score Number and severity of late payments Type, number and age of accounts Total debt Public records

8 Items to watch for Pre Payment Penalty Late Fees Annual Percentage Rate The annual percentage rate (or APR) is the amount of interest on your total loan amount that you'll pay annually (averaged over the full term of the loan). A lower APR translates to lower monthly payments

9 Borrowing Money/ Structure Consolidate Student Loans- One payment, most of the time fixed interest rate. Car loan- Make sure that you don t have a prepayment penalty. Don t finance for longer than the car will last.

10 Paying Off Debt Always try to payoff debt on an accelerated basis. Two ways to pay off debt. Highest interest rate or by lowest balance to snowball debt. When you snowball debt you pay off one debt and roll that payment onto another loan paying the next debt off at a faster pace. Credit Cards, Car Loans, Home Loan, Student Loan

11 Improving Bad Credit Begin by paying all bills on time preferably before getting any late fees and always before the payments are past due by 30 days Make sure to payoff any Collection or Charged Off Accounts Focus on paying off debt instead of moving debt around

12 Time to repair It takes time to repair/improve credit Focus on paying down credit balances No late payments Payoff collections

13 Questions?

14 Purchasing Your First Home

15 Purchasing your first home? Getting Pre approved: Why is this important? How much can I afford? What Payments am I comfortable with? What loan programs do I qualify for?

16 Items Needed for Pre Approval Copy of Diploma & Transcripts Offer letter or contract for employment Last two years Federal Tax Returns Last two years W-2 s Most recent 30 days of paystubs Last two months bank statements for all checking, savings, and asset accounts State issued Identification or Driver s License

17 Why do Banks need this information? Verification of Income- Ability to Repay Checking for business loss on returns Sourcing funds for closing or down payment Verifying terms of any new employment

18 What can affect my approval? Opening new credit accounts during the application process- this will change your debt to income Student Loans- Even Deferred payments must be counted when applying for a mortgage-the lender has to consider that at some time during the mortgage the payments will be due Debts that are not reported Overdrafts on bank statements

19 Selecting a Home Find a Real Estate Agent Make sure that the home you want to purchase will fit in with your loan program your lender can help with answering any questions

20 How long does the process take? Several things can determine the amount of time needed Type of loan program Delays due to inspections or repairs Amendments to the contract

21 Be sure to ask questions Your lender is there for you and should be keeping you informed during the entire process

22 How can I help the file move along? Keep any new paystubs or bank statements to update your credit file if needed. Start checking on getting insurance for the home right away. It is your right to shop around for insurance. The lender will need to have the insurance as soon as possible to keep from having delays in the preparation of the closing documents

23 How long does the process take? Several things can determine the amount of time needed Type of loan program Delays due to inspections or repairs Amendments to the contract

24 What to expect at closing Bring funds for closing - cashier s check or wire Bring Identification for notary purposes Signing Documents

25 Questions?

26 Thank you