Author Archives: lbank245

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5 Common Down Payment Beliefs (Misconceptions) That Could Be Holding You or Your Clients Back

Category : Home Loans

5 Common Down Payment Beliefs (Misconceptions) That Could Be Holding You or Your Clients Back

Misconception 1: Loan programs are only for new first time homebuyers. While there are many first-time home buyer programs out there, it’s important to take note that the meaning of a first-time homebuyer is someone who has not owned a home in three years. Additionally, more than 37% of First Time Buyer programs might not even have a first-time homebuyer requirement.

Misconception 2: Homeownership programs make financing more difficult. There are now more than 2,500 programs available across the country and 85% have funds available for new house buyers. It is recommended that new potential new buyers seek homeownership education. It’s often a necessity with down payment programs and it provides} buyers self-confidence and assurance in their ability in the buying process and knowledge about financing options, including down payment assistance programs as well as spending budget and cash management strategy.

Misconception 3: You should put 20% down. Today, a 20% down payment is not required and with regards to the buyer’s situation, it might not be optimal or advisable. Down payment assistance programs allow buyers to save on the down payment, retaining savings for property maintenance and improvements. Some of these present programs include grants, first mortgages with below-market interest rates and some annual tax credit.

Misconception 4: Down payment assistance programs are available in my area. With some investigation you will discover some programs available in every community across the country – rural and urban. It’s important for buyers to search for these programs early in their home-buying process as it may help determine the best area part of town or price point.

Misconception 5: It’s too expensive to buy in the present market or in my area. More than 14% of programs are designed for individuals providing an important community service, including educators, protectors, workers in the health care industry, veterans and other special community servers. This is especially helpful in high-cost markets, these programs help these critical personnel stay and live with-in the communities they serve.

Recent statistics indicate that over fifty eight percent of all home buyers were First Time Home Buyers. For more First Time Homebuyer information just click here.

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Myths and Realities About Buying Your First Home

Category : Banking , Home Loans

Myths and Realities About Buying Your First Home

Man Holding a Moving Box

Misconception: Buying a home is too complicated.

Fact: The buying process may seem complicated externally, but once started the process can be understood simply. The key is to find respected reliable advisors to guide you through this process and help you understand the obstacles. This is where a professional and trusted Mortgage Loan Officer and Realtor are important.


Misconception: You need to wait until you get married to buy a home.

Fact: Marriage, although a major part of life is not always a deciding factor in a person’s future. You will discover there are no rules to point when in life each step of the process should be taken. Typically valuable years of homeownership can be lost looking for just that “right person” to come along. There is no tangible reason that ties marriage to home ownership. They can, in fact, be contrary to each of the stages of your life. One particular stage is not necessarily connected to the other.


Misconception: If you don’t have the funds for your dream home, hold off until you do.

Fact: There can be a major difference between “the dream of buying a home”, and “owning your dream home”.  Frequently the difference is merely the purchase, remodeling and subsequent selling of several middle homes until you can finally get into your “dream home”. Perhaps, waiting around, holding out to acquire your desired dream home might well become the illusive carrot at the end of the stick, always just out of your price reach. The truth is that you may be much better off using the “dream of home ownership” to work yourself into owning your “dream home”.


Misconception: You need a sizable down payment.

Fact: Although much has been said in the media about the benefits of a 20% down repayment, it is a misunderstood belief. You do not need that much down.  An experienced loan officer can help you find loan programs that require much less, many times as little as 3% down payment.  There are also Down Payment Assistance Programs (DPA) that can even help you come up with that 3%. There are also some loan programs that are specific to regional areas like 100% USDA lending options, 100% options for Veterans, and Utah Housing Lending options that go to even 103%.


Misconception: You have to have great credit to buy a home.

Fact: FICO scores are one of the biggest credit factors, yet, scores as low as 580 can meet the criteria for an FHA loan. Also, your credit score is snapshot in time of your over-all credit. There are factors within your credit picture that if tweaked properly can significantly increase your score quickly.  An experienced loan officer, although not able to do credit repair for you, can usually tell you what you have to do to make these modifications.  Many of these alterations are fairly basic and can raise your score significantly within a few months enabling you to move ahead with a home purchase.


Misconception: You should wait until the market gets better.

Fact: A poor market is usually the best time to buy as property is not moving and prices tend to be lower in a sluggish, slow-moving or poor market.  Consider this, by waiting for when the market increases you may be buying at a higher price against more competition for the best homes.  That doesn’t make much sense, does it?


Misconception: You cannot afford to buy a home.

Fact: Can you afford to not buy a home? Do you want to stay a tenant permanently? There may never be a good or best time to buy, but you can be certain that if you do not buy you will never get the opportunities of homeownership. Most first time homebuyers may already be paying almost as much in rent as they would pay with a home mortgage payment. The tax advantages and the future appreciation make homeownership from a monetary view almost less expensive than renting.


Unsurprisingly, there is a strong argument against these few misconceptions and many others that are thrown around.  However, the biggest attribute toward homeownership is desire. With desire you can overcome or defeat the vast majority of the obstacles like down repayment, credit, work (income) or any others which might seem insurmountable. Your desire to finally stop being a renter and exchange it for homeownership will be what leads you forward on the road ahead.

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Millennials Finally Moving Out of the Family Basement

Category : Banking , Home Loans

Millennials in basement

Fannie Mae says Millennials are finally leaving their parents’ basements

Parents, maybe your offspring may finally be moving out of the family’s basement.

A new report(PDF) from Fannie Mae, the U.S. government-backed mortgage company, suggests that the millennial generation is finally getting a “move on” in their lives.

“According to the ACS [Census Bureau’s American Community Survey], the number of homeowners aged 25-34 fell by more than 250,000 in each year between 2007 and 2012, but has declined by less than 100,000 annually since then,” Fannie Mae said. “In fact, the decline between 2013 and 2014 was statistically insignificant, the first indication of stability in the number of young homeowners since the onset of the Great Recession.” This means that data shows the number of Millennials who have been residing with parents has leveled off and may even be turning around in a decline.

Fannie Mae said data supports the idea that it won’t take much to see positive growth in millennial homeownership in the near future.

A report published by Goldman Sachs earlier this year also pointed to millennials’ desire to leave the family homestead. The company’s survey showed that only 12 percent of millennials rated home ownership as “not very important,” while 20 percent already owned a home or were in the process of buying one. Almost 70 percent said ownership was either “very important” or “important,” but it wasn’t a near-term goal.

Indications are for a brisk housing market in 2016. This data coupled with the recent announcement of the first rise in interest rates by the Fed since it placed the floor rate a zero seven years ago.  This should also bring many Millennials off the sidelines into the home buying mode in anticipation of further rises in the future and the fear of “missing out”.

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New Home Buyer Do’s and Don’ts

Category : Home Loans , Programs

As a First Time Home buyer These are Some of the Things You Want to Consider


Do – Check your credit standing, whether with your mortgage broker when you prequalify, or on your own prior to seeking a home loan. There could be erroneous information that you may need to have removed from the credit bureaus. Your FICO score determines much about what debt to income ratio and interest rate you will be able to qualify for. Liberty Bank is not a credit repair company but we can give you good advice as to how to improve your credit score in advance of qualifying for a home loan. You can also obtain a copy of your credit report annually for free at This report will not give you your FICO scores, however, prequalifying at Liberty Bank WILL give you your FICO scores. Also, this will give you time to resolve any discrepancies that you find on your report.

Do – Consider getting prequalified for a home mortgage loan through Liberty Bank. This service including the cost of your credit report is free at Liberty Bank. Getting pre-approved puts you in a better negotiating position with potential sellers as well as let’s real estate agents and professionals know that you are serious about buying because you have taken the time to get prequalified with a lender. It will also help you to stay within your budget and know exactly what you can or can’t afford.

Do – Find a great team of professionals first. Start with Liberty Bank of Utah to get prequalified. You can visit Liberty Bank at our website Next find a knowledgeable realtor with a proven history of success helping first time home buyers. Realtors are very sophisticated, knowledgeable and skilled in helping you to learn local markets and market trends. Remember that working with a realtor costs you nothing when you are buying because the real estate fees are paid by the seller of the home. Finally make sure to close your loan with a dedicated residential title/escrow officer that specializes in the closing of Utah Real Estate loans. Do however remember to shop around for your mortgage and ask for multiple Loan Estimates so that you can compare accurately. Click here for a great resource to help understand the mortgage process.

Do – Get a home inspection. Once you have made an offer on a home, make the offer contingent upon the outcome of a residential home inspection. Although inspections generally cost several hundred dollars, they ultimately could save you not only the inconvenience of moving into a home with serious problems that you aren’t aware of, but also save you thousands of dollars on home repairs for heating, cooling, roofing, electrical, plumbing or other problems that otherwise would have gone unnoticed without an inspection. In the process you might be urged to skip the home inspection to hurry the process. Always get an inspection by a qualified residential home inspector.

Do – Make a budget ahead of looking for a home and stick to that budget. Consider the additional costs of home ownership like maintenance, taxes and contingencies for future repairs and add these to your monthly housing costs budget. Be willing to compromise. Just because we all want saunas, fireplaces and jetted tubs doesn’t mean that it is important that every home you consider has every amenity that you want. Separate your wants and needs and stick to your budget. Make sure to consider your possible future needs before making such a big, life decision.

Do – Get a Home Warranty if possible. Many home sellers will include this fee into the sales price or closing costs for you. Typically they can be bought for as little as $250-$500 and will cover most major repairs during the first year you own the home.

Click Here To Consider What To Avoid (Don’ts)

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First Time Home Buyer

Category : Home Loans , Programs

The Liberty Bank Mortgage Team specializes in helping First Time Home Buyers through the sometimes challenging process of moving into Homeownership.  They are specialist with many years experience in dealing with some of the typical challenges like:

  • Dealing with credit challenges
  • Obtaining a down payment
  • Understanding the process and terms
  • Choosing a Realtor and Title professional (Liberty Bank has no real estate or title affiliation so you can be confident we would steer you to a true professional)
  • Understanding interest rates and other terms

We have a completely “self service process” available for those who prefer the convenience of technology.  Or, we can give you personal face-to-face hands on service or a combination of both.  Much of our process can and is conducted by e-mail and/or text for your greatest convenience.

The Liberty Bank mortgage team also prides itself on complete transparency.  The website provides multiple means of communication and the team, whichever loan officer you work with, will do everything possible to communicate and answer all your questions in an accurate and timely manner.


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How do I get a down payment?

Category : Home Loans

What Do I Do About A Down Payment?
The largest obstacle that many potential home owners face is raising enough money to make a down payment. What is a down payment? Most lenders will only loan a certain percentage of the purchase price so the potential buyer must pay the difference in the form of a down payment. Many potential buyers think that to buy a home in today’s market climate you must have a 20% down payment. Nothing could be further from the truth. This information was put together specifically to dispel this MORTGAGE MYTH. We will describe several loan programs and tools to help potential first time homebuyers understand some of the options available to them. So if you are tired of renting, read on.

FHA loans
Probably the most used program comes from HUD (Housing and Urban Develop). This is a government agency which is tasked with making housing more accessible and affordable to more individuals and families. Most potential first time home buyers have heard of an FHA (Federal Housing Administration, a department of HUD) but many do not know how it works. Lenders would not make loans above 80% without some way to mitigate the risk of the borrower defaulting on the loan, thus the 20% down payment most potential borrowers know about. In an FHA loan HUD does not loan the money but guarantees the loan so if the borrower defaults FHA will step in and cover any loses the lender might suffer because of the foreclosure. To do this FHA charges a fee called Mortgage Insurance. The borrower agrees to pay an extra insurance fee to cover the cost of this FHA guarantee to the lender.

All FHA loans carry this mortgage insurance fee. That is the down side. However, there are many upsides and the FHA loan program helps many potential homeowners realize the American Dream of homeownership. If you are tired of renting and can’t quite seem to save the supposed 20% the FHA option allows you to buy a home with only 3.5% down plus your closing costs for the loan which usually run about 1.5% os a total of about 5% down. Also keep in mind that many sellers will agree to pay your closing costs and there is a Home$tart Grant available through Liberty Bank for $7,500 which can also help. Liberty Bank has closed many loans with the borrower or new homeowner coming up with less that many apartments require initially to move in. (See Examples) There are no income limits with FHA loans but there are limits as to how much can be borrowed. Generally speaking, borrowers are limited to modest loan amounts depending on the home prices in the areas they wish to buy. Credit and debt ratios are much more liberal for an FHA loan affording many, many more applicants to get into a new home.

VA loans
The VA Home Loan program was created to enable veterans to purchase a primary residence without putting down a deposit. The eligibility I determined by years of service and the VA (Veterans Administration) issues an eligibility certificate called a COE (Certificate of Eligibility) to the vereran. The sale price of the home cannot be more than the appraised value of the home. The program is open to veterans as long as they have the eligibility certificate and qualify in terms of income and credit which are also very liberal. Like the FHA loan a lender loans the money and the loan is guaranteed by the Veterans Administration in case the veteran defaults.

USDA Loans
USDA mortgages are administered by the US Department of Agriculture. A number of different home loans are available through this program but are designated for the more rural areas. There are many areas in neighboring counties to Salt Lake County. Presently none of Salt Lake County or David County is designated eligible for USDA, however, some parts of Utah County, all of Tooele County and other neighboring counties have eligible areas.
The USDA loan is a very viable option and offers a 100% loan for potential buyers that desire to live in eligible areas. Like FHA and VA loans the USDA loan is guaranteed by the Department of Agriculture and they cover the losses if the borrower defaults. The USDA loan, however, has strict income and loan limits and more strict credit and debt ratio requirements.

Conventional Loans
Contrary to what many believe, the down payment required to purchase a home with a conventional loan can be as three percent. The down payment can come from a potential borrowers savings, a gift from a blood relative or from a Home$tart Grant or a small second mortgage from a qualified an NGO (Non-government Organization) like some approved non-profit or local government agencies or municipalities.
The best example of this is the 100% Utah Housing program that covers the down-payment with a small second mortgage that is completely separate from the first mortgage. The terms of the loan are somewhat flexible making the loan quite popular within Utah.

HomeStart Grant
Liberty Bank in conjunction with the Federal Home Loan Bank of Des Moines offer prospective home buyers a unique federal grant program called Home$tart. The Home$tart Grant promotes homeownership by helping homebuyers earning up to 80 percent of area median income, adjusted for family size, purchase a home with a $7,500 HomeStart.

  • Home$tart $7,500 grants may be used for down payments and/or closing costs for a single family house, including a condominium or townhouse, to be used as the homebuyer’s primary residence. Grants may be used in combination with funds from other sources.
  • Home$tart Program funds will be made available to qualifying homebuyers who have not previously owned a home in the past three years, as well as to qualifying new first-time homebuyers.
  • There are some income qualification guidelines, so be sure to ask your Liberty Bank Mortgage professional for the details of the program.

What Are You Waiting For, Let’s Get Moving!
This is just a few of the programs available to First Time Home Buyers that will allow them to get into a home without the Mythical 20% down payment. Please see examples of many of our recent transactions. These are real borrowers and real purchase transactions. (Click Here) You may also like to see what some of our recent First Time Home buyers have to say about their experience. (Click Here) If you’re tired of renting, make NOW the year you make your home ownership dream come true.

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How to Improve Your Credit

Category : Banking

How to Improve Your Credit Score

Credit scores play a critical role in your financial life and whether or not you’ll be approved for a mortgage or any other type of financing.

The fact is, a poor credit score can end up costing you hundreds, if not thousands, of dollars in interest and other costs throughout your lifetime — and that’s assuming you’re even able to qualify for financing at all. If you’re suffering from a poor credit score, there are steps that can be taken to improve your credit score, enabling you to take advantage of all the benefits that having great credit affords.

If you’re looking to improve your credit score, you must first identify what’s holding your score down so that you can address the problem and focus on steps that will have the greatest impact. Here are four steps that will get you started:

1. Check Your Credit Reports for Accuracy Your credit score is  based solely on the information reported to the three credit bureaus. (Experian, Trans Union, Equifax)  If the information in your credit report is inaccurate, so too will be your credit score. For this reason, you want to make sure you check all three of your credit reports for errors periodically. If you find errors, be sure to dispute the items directly with the credit reporting agencies to have them corrected. Under the Fair Credit Reporting Act, you’re entitled to one free credit report from each of the three credit reporting agencies once every 12 months. Learn how to claim your free annual credit reports.

2. Find Out Where Your Credit Score Currently Stands After you’ve verified that the information in your credit reports is accurate, it’s time to find out where your credit score currently stands. Unlike credit reports, your credit score is not included in the annual free report so you’ll need to either pay for access or contact a mortgage loan advisor at Liberty Bank.  He/she will be happy to help you obtain your credit scores and usually this is a free service provided by the bank if you are ultimately seeking a mortgage loan.

3. Find Out Why Your Score is Low Credit scoring models (understanding FICO ) are designed to include “score factors” or “reason codes” that explain where you lost the most points in your credit score. These factors are specific to your individual credit history and will vary from person to person but give you an idea of where to start.

4. Outline Your Plan and Stick to It  Now that you’ve identified the causes of your low score you can put a plan in place and stick with it until your scores have reached your target score. There is no “one size fits all” credit improvement plan, but with the help of your score factors and advice from one of Liberty Bank’s experienced mortgage loan advisors, you’ll be able to outline your very own credit score improvement plan that’s specific to your credit DNA.

Generally, there are three main reasons for low credit scores — too much credit card debt, negative information caused by poor credit management, or a combination of the two.

If you would like help in understanding and improving your credit contact one of Liberty Bank’s experienced loan advisors.

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Category : Programs

Home$tart and Home$tart Plus funds are now available through Liberty Bank to all qualifying home buyers, including first-time home buyers and those who have previously owned a home. Funds will be distributed on a first-come first-served basis.

Home$tart and Home$tart Plus promote home ownership by helping home buyers earning up to 80 percent of area median income, adjusted for family size, purchase a home.

The Home$tart Program provides $3 for every $1 of a home buyer’s funds up to $5,000.
The Home$tart Plus Program provides home buyers receiving public housing assistance with $2 for every $1 of the homeowner’s funds, up to $10,000.
Home$tart and Home$tart Plus grants may be used for down payments, closing costs, or rehabilitation of an owner-occupied housing unit, including a condominium or cooperative housing unit, to be used as the home buyer’s primary residence. Grants may be used in combination with funds from other sources.
Since their inception in 1995, Home$tart and Home$tart Plus have granted $43.2 million to help more than 8,700 first-time home buyers purchase their first homes (as of November 1, 2012). To see if you qualify, and to learn more about this program please contact Liberty Bank. 801.355-7422

About Liberty Bank of Utah

Founded in 1956, Liberty Bank of Utah is located in Salt Lake City, Utah. Liberty Bank serves Utah Businesses and the Utah Community by providing a myriad of services from SBA to Commercial Loans. Liberty Bank is one of Utah’s top SBA providers and continues to add new products and services such as Home Start Grant Program, and Small Ticket Equipment Finance. Liberty Bank is an Equal Housing Lender and is a participating member of the FDIC.

For more information on the Home$tart Program please contact:
Henry Palma
Office: 801-355-7411

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