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Author: Mann Mortgage

Mann Mortgage Named one of America’s Best Place to Work by Outside Magazine

Posted on by Mann Mortgage

Each year, Outside magazine accepts submissions from companies around the U.S. to be included in their prestigious list of Best Places to Work. Outside vets each company’s workplace culture, demographics, work-life balance, and perks of the job. In addition, they do an extensive anonymous survey with current employees to get their take on the work environment. Only those companies that excel in both areas – providing excellent company benefits and getting great reviews from employees – make it to the list of 50 Best Places to Work.

To be eligible for the award, everyone at Mann Mortgage completed an anonymous survey. They were asked to rate areas such as their relationship with their supervisor, their work environment, their confidence in the leadership team, their role satisfaction, and their pay and benefits. The survey results were 75% of Mann’s total score, and they were high enough to rank us as the #12 Best Place to Work in the US.

This year, a theme among companies that made the Best Place to Work list was embracing the new working environments where social distancing and creative team building are the norm. At Mann, we quickly adapted to working, meeting, and partying remote – 40% of us now work from our home offices. Like many of the companies on the list, we’ve found working remote to be an effective and efficient way to work and we’ll continue to allow it, even once the pandemic is over.

“We’re thrilled that we, a mortgage company, are included in this list of exceptionally innovative companies. These organizations are defining what great corporate culture looks like in this country, and we are honored to be included with them,” said Cassidy O’Sullivan, business executive for Mann Mortgage. “We want Mann to be a positive place where people are excited to come to work and have a voice in the company.”

Mann Mortgage’s positive corporate culture was also recognized by Mortgage Professionals America who gave the company a Top Mortgage Workplace 2020. Of the hundreds of mortgage companies that were nominated, Mann Mortgage was one of only 29 who received the award.

“These awards show our employees do a great job making each other feel welcome, needed, and heard” said company CEO, Jason Mann, “and I’m just so grateful to be part of such an exceptional team.”

Mann Mortgage is based out of a beautiful Kalispell, Montana. We’re always on the lookout for talented and fun-loving people to join our team. Our corporate office hires for positions such as quality control, underwriters, and product specialists. We also have branch offices across the United States that hire loan officers, production assistants, processing agents, mortgage sales managers, and more. You can view and apply for open positions at mannmortgage.com/careers or email your resume and cover letter to jobs@mannmortgage.com.

Buying a home with challenged credit

Posted on by Mann Mortgage

Buying a home with bad credit can be a challenge, but it’s not impossible. Your credit score – whether it’s good or bad – is just one of the factors your home lender will use to decide whether you’re eligible for a loan.

What is a bad credit?
Bad or “low credit” typically means your FICO score is under 600. FICO credit scores range from 300 to 850 and represent how likely you are to pay back a loan. Your score is calculated based on your payment history, amount owed, length of your credit history, new credit, and the mix of credit you have. Your score is used by lending agencies to determine whether you’ll be eligible for a loan and at what interest rate. The closer your score is to 800, the more loan options and lower interest rates you’ll have access to. Lenders tend to define the scores as:

Exceptional: 800+
Very good: 740 – 799
Good: 670 -739
Fair: 580 – 669
Very poor: 300 – 579

To check your credit report annually, you can visit annualcreditreport.com to see what your current FICO score is. It’s free to use once a year and it won’t impact your credit rating.

What’s the minimum credit score needed for a home loan?
There isn’t a universal minimum credit score needed to get a home loan. Instead, each mortgage lender decides the minimum credit score they’ll accept. But when a score is under 600 it’s classified as “subprime” and your loan options drop significantly. A score under 550 is going to have very limited loan options with very high interest rates.

Other factors mortgage companies use
Besides your FICO score, a lender will evaluate how much money you have for a down-payment, how much debt you already have, your credit history, and your income. To increases your chances at getting a loan with bad credit, the best option is to have as large a down payment as you can afford to minimize your risk to the lender.

A potential borrower with a low credit score but a sizeable down payment and a decent credit history is more likely to be approved for a loan than someone with low credit, a small down payment, and no credit history.

How much more will bad credit scores cost in the long run?
Since early 2020, interest rate on mortgages have dropped. Lower mortgage rates mean smaller monthly payments for principal and interest – and a lower cost for the loan over its life. That said, there’s still a big difference between how much someone with good credit will pay compared to someone with a bad credit score.

From the chart below, you can see a borrower with a credit score of 639 will end up paying $95,091 more in interest over the lifetime of the loan than a borrower with a credit score of 760.

Source: MyFICO.com

What home loans are available to someone with bad credit?
FHA loans are insured by the Federal Housing Administration and are designed specifically for borrowers with low credit and lower-to-middle income. You’ll need a down payment to qualify for FHA loans, but your mortgage lender may be able to secure a loan through them even if you have a FICO score as low as 500.

The best way to evaluate your loan options is to speak with a local mortgage expert. Based on your financial goals, loan eligibility, and local real estate conditions, they’ll be able to help you find the right loan for your needs.

Why are VA loans 0% down?

Posted on by Mann Mortgage

Department of Veterans Affairs (VA) loans are available to current and previous U.S. military service members and their spouses for financing a home. The loan is given by an independent mortgage company or bank, and the Department of Veterans Affairs guarantees a portion of the loan will be paid back if the borrower defaults. That guarantee makes VA loans less risky for lenders and it is what allows it to be offered without a down payment requirement by your mortgage lender.

Are VA loans a good deal?
Like all loans, it depends on you and your financial situation. There are some benefits to VA loans that many people may want to take advantage of while other veterans may find a different type of loan works better for them. The chief benefits of a VA loan are:

  1. You don’t need a down payment
  2. You don’t need a perfect credit score
  3. You can have a higher debt-to-income ratio
  4. You don’t need to pay monthly mortgage insurance
  5. There’s no limit to the loan amount
  6. It can be used to purchase a second home with no down payment (it’s called the VA bonus entitlement)


The catch
With all good deals, there’s a catch. For VA loans, you’ll have to pay a small funding fee (2.3% if you put 0% down) to offset the loan program. This is a one-time fee that will be paid at closing or rolled into the mortgage amount (which will increase the monthly payments and interest paid over the life of the loan). This fee is waived for anyone with a service-connected disability.

Should you get a VA loan?
Whether a VA loan is right for you depends on your unique financial situation. If you have money for a down payment, you may be better off getting a different type of loan. Contact your local loan officer and together you can go over your options and pick the best one for you.

What is a cash-out refinance?

Posted on by Mann Mortgage

A cash-out refinance is when a borrower has a mortgage they’ve been paying off and they replace it with a new mortgage for more than their remaining principal. The difference between the principal balance of the first mortgage and the new one is given to the borrower in cash.

How is it different than a standard refinance?
In a standard refinance, borrowers work with their lender to get a lower rate of interest or a new payment schedule. Once the standard refinance is secured, they have a new monthly payment amount based on the new agreement – but their balance on the loan remains the same. In a cash-out refinance, a borrower works with their lender to pay off their home’s mortgage balance with a new loan based on their home’s current value. The difference between the original mortgage the borrower is paying off and the new loan is kept by the borrower. In order to have some equity in their home, most cash-out refinances limit the amount a borrower can receive at 80-90% of their home’s equity in cash (VA refinances don’t have this requirement).

In other words, don’t expect to pull out all the equity you’ve built into your home. If your home is valued at $350,000 and your mortgage balance is $250,000, you have $100,000 of equity in your home. You could do a cash-out refinance of somewhere between $80,000 to $90,000.

The benefits of a cash out refinance
If interest rates are at a new low, you have equity built into your home, and if you would like cash on hand to pay off high-interest credit cards or fund a large purchase, a cash-out refinance is something you might want to consider.

The cons of a cash out refinance
There are fees involved in a cash-out refinance, and you’ll have to make sure your potential savings are worth the cost. Like any refinance, you’ll pay closing costs of around 2% to 5% of the mortgage. And if your lender allows you to take out more than 80% of your home’s value, you’ll have to pay private mortgage insurance (PMI). Freddie Mac estimates most borrowers will pay $30 to $70 per month for every $100,000 they borrowed.

And, don’t forget your overall debt load will increase with a cash-out refinance.

Alternatives to a cash-out refinance
One potential alternative is a home-equity line of credit (HELOC), which you could also use to pay for a home renovation or to pay off credit card bills.

>> Learn more about a HELOC.

Should you get a cash-out refinance?
If you have enough equity built into your home and you get a great rate, they might be a great solution for a home improvement or renovation. To find out what the current rates are and to check your home’s current market value, contact your local Mann Mortgage expert today.

What makes a good starter home?

Posted on by Mann Mortgage

A starter home is a single-family, condo, or townhome that a first-time homeowner can afford and may outgrow. They’re normally small, modest, and lacking in upgraded amenities. They can be a good investment for some young people and a way to build equity towards a bigger and better house in the future. They’re becoming more expensive and harder to find. Some people are skipping starters altogether – choosing to rent for longer to save money towards a bigger first home purchase.

Stats on starter homes:

  • 31% of home buyers are first-timers.
  • The increased price of homes and the amount of student debt young adults have are impacting the median age of first time homebuyers. It’s the highest it’s been since they started tracking it  – 33 years old.
  • If you’re like most people, you’ll spend an average of 13 years in a home before you sell it
  • The longer you live in your home, the more equity you’ll build in it

Characteristics of a good starter home

It’s in a nice neighborhood
It’s important for you to get a home in as good an area as you can. What exactly is a “good” neighborhood? Generally, it’s one that’s quiet, walkable, in a good school district, close to amenities, and is well maintained. Homes in a good neighborhood will be safe to live in and be easier to sell when you’re ready. If you have any questions about neighborhoods, ask your hometown home lender. They’ll give you an unbiased opinion on the best areas in your community.

The taxes are affordable
Your mortgage is just one portion of what you’ll pay each month for your home. One of the biggest ongoing expenses for your home will be your property tax. This is an annual tax levied by your state and local governments on your land and buildings. And it’s a sizeable fee – usually thousands of dollars. The tax is collected once a year, but many homeowners put money into an escrow account each month to pay the fee. Find out what the current owners paid for their taxes, but be aware the taxes will increase over time. Some states increase property taxes annually while others reassess them at set increments (as example, every 5 years).

Utility bills aren’t too high
Starter homes are no frill, which make them affordable to purchase. The price was kept down by NOT getting the most energy-efficient and latest upgrades. And if the starter home is older, be especially aware of the potential utility costs. You can request to see copies of the seller’s utility bills to see what it may cost you for your electric, water, and other utilities.

It’s affordable
Be strategic about your purchase. If you are planning on selling your home in a few years, think of your starter home as an investment. That means, buy something that will easily sell again. Find the best house in your price and in a good location – and don’t go over budget! If you make a wise purchase now, you’ll be better able to afford an upgraded home in a few years.

What are mortgage points and when should you buy them?

Posted on by Mann Mortgage

After negotiating the price of a new house and being approved for a home loan, some people opt to purchase mortgage points to lower the interest rate and save on the overall cost of their loan.

Mortgage points are a fee a borrower can pay their mortgage lender to lower the interest rate on their home loan. Each point lowers the interest rate around 0.25% and costs 1% of the mortgage amount. The points are paid for when the loan closes. A full point, multiple points, and even fractions of points can be purchased.

When Should You Buy Mortgage Points?
There’s a “break even” point on mortgage points. It’s when you’ve saved more in payments than you paid for the points. Typically, it takes a few years for that to happen. Do the math for your mortgage and make sure you’ll be in your home at least as long as it’ll take for you to break-even.

When Shouldn’t You Buy Points?
Generally speaking, if you have enough cash to purchase mortgage points, you may be better off putting that money towards your down payment instead. A larger down payment could get you a lower interest rate, reduce the amount you’d pay for mortgage insurance (or eliminate it all together), or reduce your monthly payment.

Mortgage points are a long-term strategy to save money, so if you don’t plan to be in your house long they may not be worth the cost. If you’re interested in mortgage points, talk to your local home lender. They can run all the scenarios to see how best to pay off your loan.

What happens to your mortgage in a divorce?

Posted on by Mann Mortgage

Couples going through a breakup face many difficult decisions including what to do with their mortgage. In 2020, the average mortgage debt in the U.S. was $208,185 with a payment of just over $1,500 per month. When your relationship changes, what do you do with your mortgage bill?

If the mortgage is in both your names, you’re both responsibilities for the monthly payments regardless of who is living in the house. Missed payments will negatively impact both your credit scores. So the first thing you’ll need to decide is how to continue to make payments during your separation. Then decide what you’ll do with your mortgage.

There are normally two ways separating couples handle their mortgage. Couples either sell their home or refinance to remove one person from the mortgage.

Sell your home and pay off your mortgage
Find a local real estate agent, agree on the asking price, and place your home on the market. When you accept an offer for the house, use the funds to pay off your mortgage. If you’re lucky enough to get any additional proceeds from the sale, those funds can be split between you and used towards financing your new homes. It’s a good way to make a clean split and each have a little extra money to go towards your new life.

Refinance your house in one person’s name
If one of you would like to stay in the house, you can work with your home lender to refinance in just one person’s name. To do this, the spouse remaining in the home will have to apply for the new loan, your home lender will verify they are able to make payments on their own, then the refinance will close. Refinancing typically takes 30 – 60 days and the spouse who stays in the home will have to pay closing costs.

A less common option is for you to continue to co-own the home together. You will both continue to have the mortgage listed as a debt on your credit report and you’ll both be negatively impacted by any missed payments. But it may be a good option if a custodial parent can’t afford the house on their own. By co-owning it together, your kids are able to stay in their house and have a sense of continuity.

A note about community property
Some states observe community property laws meaning both you and your spouse make equal ownership claims to assets, like houses, acquired during your marriage. In these states, you’re both responsible for the mortgage debt whether your name is on the loan or not. And you’re both going to split the home sale proceeds wither you’re on the mortgage or not. The law is more detailed than that, so be sure to contact your attorney if you have any questions.

As of 2021, there are nine states where community property laws are in place for married couples:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

The law is also observed in the U.S. Territories of Guam and Puerto Rico.

If you have any questions about your mortgage or how you can refinance to remove someone from it, be sure to contact your loan officer. Mann Mortgage loan officers are here to work through any changes you need to make to your mortgage due to life changes.

Closing on a home – how to prepare

Posted on by Mann Mortgage

You’re getting ready to close on a new home – congratulations! You’ve completed your house hunt, you negotiated the price, and your offer was accepted. Before you get handed the keys to your new house, there’s one final step you’ll have to complete – closing on your home.

It’s the final step to transfer ownership of the property to you once all contingencies for the sale have been eliminated. To prepare for closing, your lending agency will originate and underwrite your loan and the title company will prepare paperwork for you to sign and make the transfer of ownership legal.

As soon as the seller accepts your offer and all contingencies have been met, the sale of the home is “pending” and closing begins. A thorough home inspection will be completed by a professional inspector to uncover any defects or local building code violations that might impact the value of the house. Your mortgage company will begin the time-consuming task of originating and underwriting your loan. They will be taking a very close look at your finances to decide whether you’ll repay the thousands of dollars you’re asking them to lend you.

Being pre-approved for a loan means your lender already pulled your credit score, verified your income, and gave you an idea of the type and size of mortgage you qualify for. Having this information makes it likely you’ve selected a home you can afford and your lender will help you finance. But being pre-approved is not a guarantee you’ll be given a final approval for your loan. If anything has happened since you were pre-approved that might affect your finances (losing a job, taking out another loan, missing payments on your mortgage, etc.), you could be denied the loan.

It took an average of 49 days in November 2020 for all the paperwork to be completed and the transfer of ownership to be finalized. The number fluctuates a bit every month, but 30 to 60 days is a good estimate. The dedicated loan officers at Mann Mortgage strive to close loans in 30 days or less.

During closing, be ready to hand over a lot of documents to your mortgage company for final approval of your loan. Your loan officer will likely have a lot of questions for you. Answer their questions quickly to avoid delays in your closing date.

You’ll probably need the following:

  • Your last two tax returns
  • Your last two pay stubs
  • Your last two W2 statements
  • Your bank statements for the last one to three months

You may also need:

  • Credit card statements
  • Settlement statements
  • Verification of rent
  • Divorce decree
  • Bankruptcy documents
  • Statement of Social Security or retirement income
  • Copies of rental lease agreements on rental units
  • Contact information for your homeowner’s insurance agent
  • A profit and loss statement
  • Proof of additional income

Some common closing costs are listed below. All of them have to be paid when closing on your new house.

  • Home inspection fee ($500 to 1,000)
  • Loan origination and underwriting fee (0.5% to 1% of the loan amount)
  • Credit check fee ($25 to $60)
  • First month’s interest (varies)
  • Flood certification fee ($15 to $25)
  • Title/escrow services and insurance ($200 to $400)
  • City or county recording fee (varies)
  • Transfer taxes (varies)
  • Realtor or broker fee (2% to 7% of the home’s price)

This isn’t an exhaustive list of every document and fee you’ll pay, but it will give you a good idea of where to start. If you have trouble finding documents your loan officer requests, ask them if there are alternative documents you can provide in their place.

Closing day might start with a final walk-through of the house to make sure it is in good shape and the seller met all contingencies. At the appointed time, you and the seller will meet and sign documents with your title or escrow agent, real estate agent, and possibly an attorney. Take as much time as you need to make sure you understand what you are signing.

Once all the paperwork is signed and any fees are paid, the ownership of the house it transferred to your name and the home is yours.

At any point, if you have any questions about your closing costs, loan options, or getting pre-approved, be sure to talk to your local loan expert at Mann Mortgage. We are here to help you make your closing as seamless and quick as possible.

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