Mary Kerfeld, Michelle Kortan Earn AAP Designations
The Accredited ACH Professional (AAP) designation is obtained by passing a nationally administered exam given annually in October.
The AAP exam covers a wide range of Automated Clearing House (ACH) information including; knowledge of the ACH network and comparative payment systems; knowledge of ACH rules and regulations; technical ACH skills, including operational requirements; understanding of ACH products and applications; risk management and other policy issues; marketing ACH services; management of electronic payment services; Regulation E and other federal requirements.
Mary Kerfeld serves as an Accounting and Remote Deposit Specialist in our Long Prairie office and Michelle Kortan serves as Senior Accounting in our Sauk Centre office. The AAP designation speaks to their expertise in ACH related issues in banking.
A critical part to any businesses success is being able to manage money properly, however not all business owners are financial experts. Therefore, they can sometimes lack the solid financial structure needed to generate consistent revenue and sustain themselves long-term. Here are some basic financial tips to consider if you want to succeed.
Set Financial Goals
Companies that set financial goals tend to stay on track by defining financial strategies. Goals are beneficial because they tell everyone in the company what to strive for, what to focus on and what the expectations are for success. With everyone on the same page and working together for a unified goal, the chances of success increase. According to Inc., it is important to keep financial goals measurable and realistic. An unrealistic goal defeats the purpose. So where do you want to be in 1-year? 5 years? Set a goal and come up with a plan on how to get there.
Create a Budget
Budgeting is important to managing money as it helps keep track of forecasts vs. actual revenue, and helps minimize unnecessary spending. Creating a budget requires a business to itemize all of its expenses and assign each a monetary value. The value that is set is the maximum amount of money that can be spent for the month or year on that product. Once a budget is created, managers and business owners are obligated to stay within the set financial parameters. Spending more money than what is assigned can cause businesses to lose money. Businesses should review their budgets frequently to determine if they are sticking to their financial plan.
Monitor Your Cash Flow
Cash flow is one of the quickest ways to get a pulse on how a business is doing. Cash flow statements allow companies to to review their financial position and determine where the they are making the most money (or losing the most money). A cash flow analysis is an important part of operating a successful business because it enables the management team to understand and address any financial concerns as they come up.
Find a Financial Partner
For any business, having a financial partner you trust, who understands the unique aspects of how your business works, can make a huge difference in your success. Minnesota National Bank has a team of financial experts that have been serving businesses within the Greater Central Minnesota area (including Sauk Centre, Long Prairie and Pelican Rapids) for over 100 years. If you need a financial partner, or just want to explore your options, contact us. We offer a wide range of financial business services and we welcome meeting with you and learning how we can help make your business more successful.
Let’s face it, low interest rates are GREAT! – when you have loans. But, what about those who don’t have any loans? If you’re CD investor, then low interest rates are not what you want to hear. So, why do you invest in CD’s? Well, they’re secure, you won’t lose your investment, you can use the interest to supplement your income and you can get your hands on your money if you need it (although penalties can apply). So with all those positives, let’s work on earning you more without jeopardizing your investment. One way to increase what you earn, is to use a CD ladder.
A CD ladder is an investment strategy where you buy several CDs that mature over different maturity times. By using a CD ladder, you make sure that money is available periodically, and increase the yield on your overall CD’s. You’ve always heard the saying, “don’t put all your eggs in one basket”, so why treat your CD’s the same way?
For example, if you invest $100,000 in a 12 month CD earning 0.85%, your yield is just that, 0.85%. If you ladder your CD’s and split your money into 5 chunks and invest $20,000 for 1 year, 2 years, 3 years, 4 years and 5 years you can take advantage of the higher yields that the longer term CD’s offer, yet still have money available each year that you can reinvest or use the cash as you need.
In our example, let’s say the 1 year CD earns 0.85%; 2 year CD earns 1.25%; 3 year CD earns 1.50%; 4 year CD earns 1.75% and 5 year CD earns 2.00%. The average yield on your $100,000 investment jumps to 1.47%. That’s a 73% increase in the yield versus investing everything in the 1 year CD at 0.85%. Then, when money comes due, invest it back in the 5 year CD and the process will continue to earn you higher yields.
Set up your CD ladder with your CD’s spread out by 1 year or maybe try a 6 month gap between them. In either way, you’ll increase what you earn on your CD’s. Now, this strategy only works if you stay committed over time and as interest rates rise, you’ll get to reinvest in those higher rates each year. It’s a proven strategy that will make those low rates not seem quite so low.
Rates in this article are for illustrative purposes only. For actual rates available today, please contact a Personal Banker. Actual results may vary. If you would like us to watch rates for you, please sign up for our Rate Watch program!
If you were looking to buy a house 14 years ago, the best mortgage rate you could get on a $150,000 fixer-upper (with 20% down payment) was over 8% fixed. That means your payment would have been about $880. That didn’t sound too bad at the time.
If you were starting over today with a 3.75% fixed interest rate for 30 years (which is the current rate MNB is offering), things would be drastically different. Your monthly payments would be $555. That’s a savings of $325/month or $199,800 over the course of the 30-year mortgage! That’s the difference interest rates can make.
With interest rates at historically low levels, now is the best time to buy a house. Before you do, here are some important questions to ask:
Are interest rates going to go lower?
No one can predict if the interest rate on home loans will go lower, but given that current rates are at historical lows it’s hard to imagine them going much lower. When you add in low rates with the price of homes, which are still low due to the recent down turn in the real estate market, now is a good time to buy.
How can I make sure I only buy what I can afford?
What you can afford depends on a lot of things: your interest rate, your down payment, and your credit rating are just a few things. However you must also take into account how disciplined you are, your current bills, car payment and other expenses. If you have a lot of debt or expenses, making the house payment may be hard to do every month. The best way to determine what you can afford is to meet with your mortgage lender and pre-quality.
What is the rule for what to spend on a home?
You may want a beautiful home in a great neighborhood, however, you may not be able to afford all of that now. Some experts say that you should not spend more than 35% total of what you take home on housing. So if you take home $65,000 a year, you should not be spending more than $22,750 a year (or $1900 per month).
If you focus on what you can afford and find a good place, the equity can soon build in your home. Start small. As you start to pay off the home and make improvements to it, the value of the house goes up until you eventually have a nice little nest egg.
What should I plan for hidden expenses?
Remember that mechanical and structural problems often come up in a house – especially if it is an older house. Remember also that with a house comes insurance and property taxes. These are expenses that you may not have planned. As a general rule it is recommended to save 3-5% for any of these surprises.
Should I go for a 30 or a 15-year home loan?
Many people are excited to own their home outright and a 15-year loan not only has a better interest rate, it sounds very impressive to your friends. However, if circumstances change, the higher monthly payment may be difficult to meet. Instead consider getting a 30-year mortgage and just make one-two extra payments per year. This way the time line will be much shorter and the minimum payment due will make it less risky than a 15-year mortgage.
Purchasing a home is one of the most important decisions that you will ever make. The current interest rates make it easier for it to be an investment that pays off in the long term. Meet with your MNB mortgage lender to learn more about what may be the best loan option for you.
If you’ve been thinking about investing your money in property rather than the volatile stock market, there are lots of great opportunities to buy.
Market conditions are ideal with stagnant home and commercial prices, lots of inventory, and historically low interest rates. All pave the way for plenty of bargains. Before you begin your search for investment property, hear are some tips to increase your chances of making a successful purchase:
Buying investment property - tips for success:
- Put in the legwork
You are investing with a lot of money, so don’t take unnecessary risks by winging it. Do your research to determine market values and future potential.
- Ensure your finances are in order
Speak with your bank loan officer before you begin searching for commercial properties and viewing open homes. The right time to buy is when you have your finances in order.
- Buy where tenant demand is greatest
Look for properties close to workplaces, transport, and shopping where the majority of workers would rent. Suburbs close to business districts and leisure facilities are the places working professionals will always wish to live in, so as an investor, you’ll rarely have any problems leasing the property.
- Invest for the long term
As an investor, you want to be in the market for the long term. Look for quality properties that will always be in demand, rather than hoping to cash in on the ‘next big thing’.
The combination of low interest rates with the long-term potential for strong yields present the ideal conditions to invest in property now. Minnesota National Bank’s lending team offers great options for commercial and residential loans. Contact us today to discuss your goals and get pre-qualified.
Interest rates are hitting new record lows, but refinancing isn’t automatic. Here's how you can improve your chances.
There has never been a better time to refinance your mortgage. Rates are at record lows. The economy and job market are improving. But with low appraisals and tighter lending standards, refinancing can be difficult. Here are some tips to improve your chances of successfully refinancing.
1. Repair your credit. Pull a copy of your credit report before beginning the refinancing process. Borrowers with good credit scores of 740 or more generally get the best rates. Under the Fair Credit Reporting Act, borrowers are entitled to one free credit report from each of the three main credit bureaus – Equifax, Experian and TransUnion -- every 12 months.
2. Shorten the loan term. If you are several years into your mortgage, you can maximize your savings by opting for a new loan with a shorter term.
Consider a borrower who took out a $200,000 30-year fixed-rate mortgage with a 5% rate in 2009. Refinancing into a 30-year fixed-rate mortgage with a 3.875% rate would lower monthly payments by $177 to $897, according to HSH.com, and provide about $25,000 in savings over the life of the mortgage. Shift to a 25-year mortgage with the same rate and the payment falls by about $100 less, to $993, but the savings over the life of the loan jump to nearly $50,000.
3. Relationships can make the difference. Banks remain cautious about mortgage lending, but some show more flexibility to their established customers. This is because the bank knows more about you and your financial history. For many banks it is easier to deal with customers they know since part of their job is to manage the risk in giving a loan.
While it may not be as easy as it once was, today's low rates may present a once-in-a-lifetime opportunity to save money on your mortgage. To learn more contact MNB’s mortgage lenders to see if you qualify to refinance.
Here are some steps to take as you consider buying the house you have always dreamed of:
Make sure you're ready. Housing turnaround or not, being a homeowner doesn't work with every lifestyle. Ask yourself:
- Is my job secure? Taking on a huge debt might lead to financial trouble if you lose your job in a few months or years, especially if finding a new job requires relocating.
- Do I plan to stay put? I know I want to spend the rest of my life in my city. If I buy a house now, I won't be selling it for a long time. But if you're not sure where you'll be five years from now, renting often makes more sense. That's partly because using a real-estate agent to sell a house can cost 6% or more. Sell your home before you have that much equity and you'll lose money.
- Am I in transition? Even if you're not changing towns, you might still need to change homes. Life changes like marriage and kids can require a different house.
Know what you can afford. You don't want to end up house poor and struggling to pay your other bills because your mortgage is too expensive. Your house payment -- including the mortgage, property taxes, and homeowners insurance -- shouldn't exceed 35% of your monthly gross income.
Shine up your credit. Lenders have strict credit requirements after the housing market apocalypse. In 2011, the average credit score approved for a Fannie Mae or Freddie Mac mortgage was 760, according to CNNMoney. The average credit score for an FHA approval was 700. To qualify for the best conventional loan, you'll need at least a 740 credit score. You should check your credit at least six months -- preferably a year -- before home shopping so you'll have time to improve it before applying for a loan.
Get your down payment together. These days, many lenders want at least 20% down, but even if they don't, the bigger the down payment, the better. An analysis of 3.6 million mortgage inquiries and found that the best loan rates came with an average down payment of 28%, according to USA Today.
If you go with an FHA loan, you can qualify with a lower down payment, as low as 3.5% of the purchase price. But be aware that without 20% down, you'll be faced with the extra expense of private mortgage insurance.
Get pre-approved for a mortgage. Once your credit is good and you have your down payment together, it's time to apply for a mortgage. Do it before you start home shopping and be sure you're pre-approved for a loan. That means the lender has agreed in writing to lend you up to a certain amount. This is critical, because pre-approval means that unless your financial situation changes, you basically have that amount of money in your pocket and can pounce when you find your dream home.
Contact MNB today to assistance in helping you get your dream home.