Blog   Consumer Banking

5 Ways to Make the Most of Summer’s End

  |  Posted by

With autumn quickly approaching, here are 5 budget-friendly ideas for capitalizing on the remaining summer days (and nights). 08-05

Continue Reading

Alex is the senior consumer-banking leader for UMB Bank in Colorado. He leads the region's financial centers in the Denver and Colorado Springs market, small business banking and benefits solutions channel. Alex provides senior leadership and strategic planning/execution to UMB’s western territory. He also serves on UMB Financial Corporation's senior leadership team. Alex joined UMB in 2011 and has 14 years of experience in the financial services industry.



Leave a Comment

Tagged: , , , , , , ,

Financial Word of the Week: Debt-to-Income

  |  Posted by

FWOTW

Last week we explained what Loan-to-Value meant, specifically with mortgages. Now it’s time to tackle another important ratio: Debt-to-Income (DTI).

Your DTI ratio tells lenders how much of your income goes towards your debt and is another number you want to be low. Lenders will look carefully at your DTI ratio, along with your credit score, LTV, and other factors when considering you for a loan. You should aim for a DTI ratio of approximately one third (or lower).

How to calculate

Add up all of the debt payments you make each month (mortgage, student loans, vehicle loan, outstanding credit card balance, etc.). Then divide it by your gross monthly income (pre-tax). So if you make $50,000/year or $4167/month and have $1,500 in debt to pay each month, your DTI would be $1,500 ÷ $4,167 = 36%.

If you’re thinking of buying your first home, calculate how much house you can afford with this calculator, but also factor in how much debt you already have.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , ,

3rd step to buying a home: finding the right realtor

  |  Posted by

Who better to continue our journey of Steps to Buying a Home than our associates, Natalie Crumpton and Josh Cummings, UMB Unit Finance Managers, whose expert realtor guided them while on HGTV’s House Hunters‡? 

Natalie shares their story along with advice for finding the right real estate agent.

photo1

Last summer we spent a lot of time looking at potential new homes online. At the time, we were living in a one bedroom condo in downtown Kansas City and were both ready to transition into something a little bigger we could call home. We began by searching different real estate databases, slowly narrowing homes down by the must-haves on our list: an open kitchen, a band room for Josh’s drums, a deck for entertaining and a spacious backyard for our new puppy.

Once we established our budget and wish list, we reached out to our realtor, Monte, who had been Josh’s real estate agent a few years ago and helped him to pick out the one bedroom condo we were living in at the time. What we loved about Monte (and still do) was how committed he was to making sure we found the right home (in the right location, for the right price) that suited both of our needs. He was patient, flexible with our schedules and always willing to go the extra mile as our realtor. So it came as no surprise when he was more than willing to accommodate another one of our requests: to let a camera crew follow us around and document our journey for national TV.

House Hunters
photo2

Here’s how it happened: It became somewhat of a tradition to turn on HGTV on Saturday mornings and watch House Hunters while we were searching for homes online. We would take turns discussing what we liked and didn’t like about each house and try to guess which one the couple would actually choose. So once we decided we were ready to buy, Josh applied for the TV show online on a whim, assuming it was a long shot. It came as a shock to both of us when one of the producers contacted us a few weeks later to tell us they were interested in filming an episode in Kansas City. After a few more phone calls and interviews, a camera crew was sent our way to document us on our home-buying adventure.

Along for the ride (and steering the wheel), was our wonderful realtor Monte; who not only went above and beyond what we expected from a realtor, but he also made the home buying experience as smooth and enjoyable as possible. With Monte, we felt like we were with a family member that genuinely cared about us as people, rather than just a real estate agent that was seeking a quick commission. He always had our best interest in mind and was passionate about making sure we found the perfect home.  We’re very grateful for the experience; both for the opportunity to be on House Hunters with footage to look back on of the first home we bought together and for having a realtor like Monte to share it with and make our transition as smooth as possible.
houses

What to look for in a realtor

When choosing the right realtor, make sure to consider the following qualities:

  • Integrity and candor
  • Understanding of what you are looking for in a home
  • Knowledge of the local housing market
  • Quality references and connections
  • Detailed knowledge of the purchasing process
  • Strong work ethic and passion for job
  • Flexible to your schedule and time frame
  • Committed to exceeding your expectations
    imagejpeg_0
Continue Reading

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.


Ms. Crumpton is an AVP/Unit Finance Manager for UMB. She is responsible for financial support in the Operations & Technology Group. She joined UMB in 2007 and has 7 years of experience in the financial services industry.



Leave a Comment

Financial Words of the Week: Fixed Rate / ARM

  |  Posted by

FWOTW
Previously, we defined interest  as the cost of borrowing money. You have a range of options when it comes to interest rates. Before you take out a new loan or credit card, be sure you understand those options.

When looking at mortgages, you will likely see fixed rate and adjustable rate mortgages. With a fixed rate mortgage, your lender sets the interest rate during the application process, and it does not change for the life of the loan. With an adjustable rate mortgage, your interest rate will change regularly, based on a published reference rate. The frequency of this change depends on your mortgage.

Loans other than mortgages can be either fixed rate or variable rate. The definition of a fixed rate loan is the same as a fixed rate mortgage, but variable rate loans differ from adjustable rate mortgages in how frequently the rate can change. If the reference rate changes frequently, the interest rate on a variable rate could change monthly. Many car loans have fixed rates, while most credit cards have variable rates.

If you are unsure what your interest rate is on an existing loan, you can look at the terms and disclosures on your monthly statement or your loan paperwork. If you are applying for a new loan or line of credit, the application disclosure should tell you how the interest rate is set.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , ,

Financial Words of the Week: Points, Origination Fees and Closing Costs

  |  Posted by

FWOTW
All three of these terms refer to costs associated with applying for a loan. Lenders sometimes charge these fees to cover the cost of underwriting, appraisals, document preparation and other parts of the process. Generally, the fees will be higher with mortgages than other loans. Mortgages have more complicated requirements compared to other loans. Origination fees are one-time flat fees that cover the costs of processing the loans. By comparison, closing costs may include expenses associated with the real estate transaction that cannot be included in the mortgage amount. A point is one percent of the dollar amount financed. Lenders may let you pay points to lower the interest rate or they may charge points instead of origination fees. Some examples of possible closing costs:

  • Appraisal: The cost of hiring a real estate professional to determine the value of the house
  • Inspection: Hiring an engineer or building professional to examine the structural condition
  • Flood Certification: By law, every mortgage made through federally-regulated or insured lenders must include a flood certification. This assessment determines if the property resides in a high-risk flood area. Homeowners with mortgages in high-risk areas must have flood insurance.
  • Realtor Fees: Real estate agents are paid based on the cost of the house, normally around 3 percent of the selling price.

Mortgage laws vary greatly from state to state. Additionally, each mortgage lender has different products and offers. Because of these complex issues, your costs may be different from those listed above. The best way to learn more is by working with an experienced mortgage loan officer. They can walk you through the full process and help you understand the costs involved. Be sure to check the blog for our “steps to buying your first home” series. So far, we’ve covered Pre-Approval (Step 1) and Choosing the Loan that’s Right for You (Step 2).

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Tagged: , , , , ,

Financial Word of the Week: Jumbo Mortgage

  |  Posted by

FWOTW

What is a jumbo mortgage? A loan for a big house? Jumbo mortgage refers to a mortgage for more than a certain dollar amount. The limit is currently $417,000 for most areas, with a higher limit in certain high-cost regions. Mortgages of less than $417,000 may be called conventional mortgages. Many federal homeownership programs do not apply to jumbo loans. Lenders often charge higher rates for jumbo mortgages or have more restrictions on the loan, even for the same borrower. If I’m looking at a house that’s $420,000, does this apply to me? Maybe. A number of factors affect the total amount financed. Your down payment, the loan terms and where you’re buying will all influence the size of the loan. These potentially complex issues present another reason why it’s so important to work with an experienced mortgage officer. When you get pre-approved, your mortgage officer will help you understand your situation and how much you can afford. Your mortgage will be as unique as your home, so make sure you get the individual attention you deserve. luxury house

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Financial Word of the Week: Lien

  |  Posted by

FWOTW

What is a Lien?

When a borrower uses collateral to get a secured loan,the lender has a legal claim to that collateral. That legal claim is the lien. Lenders most commonly place a lien on a home for a mortgage and on a car for an auto loan. When a creditor places a lien, the creditor must be paid and the lien released before the property can be sold. For secured loans, the lien is created voluntarily.

Liens and Car Loans

When you buy a vehicle using an auto loan, the lender places a lien on the car title with your state motor vehicle office (depending on where you live). That lien will remain on the car title (even if the car is subsequently transferred) unless the lender issues a lien release. A lender releases a lien by notifying the proper officials, usually upon payment in full of the loan. This is an important step to research when selling or buying a vehicle privately. When you buy or trade-in with a car dealership, they usually assist with this process.

Liens and Mortgages

Houses and other real estate can have more than one lien. If you have a mortgage and use your home for another loan or line of credit, the second lender will put a lien on your home. One lender will have a first lien, meaning that in the event of non-payment, they get paid first. The other lender has a second lien position, meaning they will be paid after the first lender.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

2nd step to buying a home—choosing the right loan for you

  |  Posted by

Picture1

So you’re ready to buy a home, and have finished the first step of pre-approval. Did you know that nearly half* of home purchases are from your fellow first-timers? It can be a daunting process, so we’re continuing the step-by-step approach to help you navigate this important financial decision.

There are many home loan choices. Finding the right lender will be the key to obtaining the information you need to make the right decision. The pre-approval process should have uncovered many of the factors that determine which loan will work best for you and let you know what interest rate you might be paying. Remember, to get a good interest rate, you’ll need as high a credit score and down payment as possible. The right lender will be able to guide you and explain the differences in each of the loans you qualify for.

Here is a general discussion of some of the mortgage loans available, to help prep you for your first meeting with a potential lender. The main differences are the size of the down payment and whether the interest rates can change.

Types of mortgage loans:

Conventional vs.Non-Conventional– One of the first decisions you will discuss with your lender is whether you want a conventional or non-conventional loan, which often depends on the size of your down payment.

Continue Reading

Conventional - A conventional loan typically requires a minimum down payment of 5 percent.  If you put down 5 to 19 percent, private mortgage insurance (PMI) may be required. This insurance protects the lender if you do not repay your mortgage.  Typically, you’ll have to pay this insurance until 78-80 percent of your mortgage is left, and then you may be able to remove PMIfrom your payments.  To avoid that extra insurance from the beginning, you’ll typically have to put down 20 percent or more.

Most first-time buyers choose homes with a median value of $147,000*, but in case you’re wondering, the conventional loan limit in most areas is $417,000. These loans can be fixed or adjustable (more on that in a minute). Conventional loans also allow you to have the seller pay up to 3 percent of your home’s closing costs and prepaid taxes and insurance.

FHA (non-conventional) – FHA loans typically require lower down payments than conventional mortgages, but there are also drawbacks to them. For example, FHA loans require mortgage insurance up front and it is usually more than private mortgage insurance with a conventional loan. Here’s how this type of loan works: The Federal Housing Authority does not actually lend the money but insures 100 percent of what the lender funds. FHA loans tend to be the most flexible in their credit guidelines. They usually allow for lower credit scores, higher debt-to-income ratios and as little as 3.5 percent as a down payment. These loans allow for up to 6 percent seller-paid closing costs and prepaid taxes and insurance.

Veterans Affairs (VA) – The VA loan was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). The VA loan does not require a down payment and does not require monthly private mortgage insurance.

United States Department of Agriculture (USDA) – This loan is intended to help people purchase homes in rural areas. The property must be located within the USDA Rural Development Home Loan footprint. USDA loans offer 100 percent financing to qualified buyers and allow for all closing costs to be either paid for by the seller or financed into the loan.

Fixed vs. Adjustable Rate Mortgages – After choosing a conventional vs. non-conventional loan, it’s time for another decision: do you want a fixed or adjustable rate?

Fixed-Rate Mortgages – Fixed-rate loans are just that, loans that have interest rates that are locked-in for the term of the loan. This means that your rate will not change during the entire time that you have the loan. Keep in mind that even with a fixed interest rate your payment could vary based on changes in taxes or insurance. The repayment of the loan is also spread out, or amortized, over that same fixed period. You can choose from 10-, 15-, 20-, 25- and 30-year fixed rates. Generally, the shorter the term of the loan, the lower the rate, but also the higher the payment. For example, a 15-year loan will usually have a better interest rate than a 30-year loan, but you’ll have to pay more per month in order to get the mortgage paid off sooner. Therefore, choosing the fixed-rate period will be a large part of determining the amount of your monthly payment.

Adjustable Rate MortgagesThese loans typically allow you to have lower payments at the very beginning, but take on higher risk than fixed-rate loans. There is usually an initial time period (1 to 10 years) where the interest rate is fixed. However, the rate can change after the initial fixed period causing the monthly payment to go up. Be sure to talk to your lender about what type of loan is best for your situation. If any of these factors apply to you, your lender can explain in more detail how an adjustable rate mortgage would work for you. However, an adjustable rate may be a good option if:

  • you plan to sell in a few years,
  • you will pay off the loan early, within the next few years, or
  • interest rates are high right now and are anticipated to decrease in the coming years. (not the case today)

To avoid feeling overwhelmed, remember, your lender is there to walk you through everything. Instead, focus on what your needs are. Then, you can outline with your lender what you’re looking for so he or she can provide your best options.

Arrive at your first lender meeting with answers to the following questions:

  • How much will you have for a down payment?
  • What are your preferred neighborhoods?
  • Do you want to get your loan paid off as soon as possible even if it means higher payments, or do you need lower payments with more time to pay it off?

Choosing the right lender is just one part of your home-buying team. Adding an experienced realtor will save you time and money and will be discussed in step three of buying a home.

*statistic source: NAHB.org

When you click links marked with the “‡” symbol, you will leave UMB’s website and go to websites that are not controlled by or affiliated with UMB. We have provided these links for your convenience. However, we do not endorse or guarantee any products or services you may view on other sites. Other websites may not follow the same privacy policies and security procedures that UMB does, so please review their policies and procedures carefully.




Leave a Comment

Tagged: , , , , , , , , , , , , , , , , , ,

Financial Word of the Week: Equity

  |  Posted by

FWOTW

What is equity?

Think of equity as a form of ownership. When you take out a secured loan to make a purchase, you obtain physical ownership of your purchase, but not full legal ownership. If you sold that purchase before fully paying off the loan, you would still need to pay off the rest of the loan. Equity is the difference between the value of that item and the amount still due on the loan.

For example, if your car is worth $20,000, and you owe $15,000, your equity is $5,000.

shutterstock_161197448_equity

So what does this mean for me?

For consumers, equity normally refers to houses, other real estate, and sometimes cars. Another way to think about equity is a fraction of ownership. When you first buy a home, your equity is approximately equal to the amount you put into your down payment. Over time, you pay down your mortgage and build equity in your home. Every payment you make lowers the amount owed to your lender and increases the amount you own.

How does this relate to a Home Equity Line of Credit?

A Home Equity Line of Credit, or HELOC (in the financial industry, we pronounce this “hee-lock,”) allows you to borrow using the equity in your home. Since HELOCs are revolving credit, they let qualified homeowners borrow money against the equity in their home whenever they need it. Because HELOCs are secured loans, they can provide credit at lower costs than unsecured loan, subject to the policy of the lending institution.

Continue Reading

UMB Financial Corporation (Nasdaq: UMBF) is a financial services holding company headquartered in Kansas City, Mo., offering complete banking, payment solutions, asset servicing and institutional investment management to customers. UMB operates banking and wealth management centers throughout Missouri, Illinois, Colorado, Kansas, Oklahoma, Nebraska and Arizona. It also has a loan production office in Texas. Subsidiaries of the holding company include mutual fund and alternative investment services groups, single-purpose companies that deal with brokerage services and insurance, and a registered investment advisor that manages the company's proprietary mutual funds and investment advisory accounts for institutional customers.



Leave a Comment

Debunking credit score myths

  |  Posted by

In an earlier blog post, we explained why credit scores are important and how to improve yours. For many people, it can seem as if their score was pulled blindly from a hat. So let’s take a look and debunk a few myths.

Credit Score Myths

Continue Reading

Ms. Stokes is a senior vice president and director of Private Banking at UMB. She is responsible for driving sales and relationship management activities. She works closely with the Wealth Management leadership team and regional presidents to grow business and helps to develop roles in wealth management, relationship management and presentation skills. She joined UMB in 2009 and has more than 30 years of experience in the financial services industry. She earned a bachelor’s degree in business administration from the University of Missouri- Kansas City and a Bachelor of Arts from the graduate school of retail banking.



Leave a Comment

Tagged: , , , , ,

Page 1 of 3123