The perks of going local with your bank account | BiS | Business in …

Sarah Gillis switched from a national bank to a local one in New Jersey as a matter of principle.

“I feel like my voice matters more in a smaller bank,” says Gillis, who closed her account at a national bank because she disagreed, she says, with some of its corporate investments. She opened an account at Peapack-Gladstone Bank by her home in Warren, New Jersey, about a year ago.

But when asked her thoughts on her new bank, it’s the perks and lack of fees she applauds. Her out-of-network ATM fees are reimbursed by Peapack-Gladstone and she gets $8 back if she uses her debit card at least ten times a month. “I just think it’s a great bank,” she says.

For consumers like Gillis, switching to a community bank — typically defined as a smaller bank that is locally owned and operated — is an action rooted as much in practicality as it is in ideology. Lower and fewer fees, and the allure of keeping money local can be compelling reasons to switch.

Downsides persist

Community banks still won’t be as convenient for many people as national banks. ATM access, for example, can be a challenge without the large networks enjoyed by national bank customers. Some 48 percent of community banks belong to a fee-free ATM network, a 2013 survey by the Independent Community Bankers of America found, but that leaves a large swath of community bank customers paying additional fees when using out-of-network ATMs.

Limited availability of cutting-edge technology continues to be an issue. The number of community banks offering mobile banking services was 81 percent last year, up from 71 percent the year before, according to a report by the Federal Reserve. But that’s still a sizeable number of banks without services many customers consider essential, such as the ability to check account balances by smartphone.

The report noted mobile banking was “difficult to implement for small and mid-size banks due to cost and expertise.”

Keeping it in the neighborhood

Fans of community banks point to the advantages, starting with a generally more favorable fee structure. These banks are more likely to have fewer checking account fees and lower overdraft fees than big national banks, according to a recent survey by Pew Charitable Trusts.

Only about 10 percent of small banks surveyed reported charging monthly service fees on checking accounts; such fees are common at large banks, though they can sometimes be avoided. The median overdraft fee for small banks was $32, compared to $35 for large banks.

And for many, the chance to keep money local is a reward in itself.

“People feel that there is an authenticity to a locally owned business,” says Terry Jorde, senior executive vice president at the Independent Community Bankers of America. “That’s true whether it’s a hardware store, a locally owned restaurant, a flower store or a community bank.”

Community banks can also play an integral role in local economies, especially in supporting small businesses.

More than 50 percent of small-business loans came from community banks, researchers at Harvard Kennedy School reported in 2015, as did 77 percent of agricultural loans.

Small businesses were also more likely to be approved for some form of a loan from community banks — 76 percent, compared to 58 percent at national banks, according to the Federal Reserve Bank of New York.

Community banks aren’t for everyone. Those who move frequently from one city to another may find it inconvenient to change community banks each time, something that’s not an issue for those who bank big.

Gillis, for one, believes the advantages of going local outweigh the drawbacks. “I’ve realized it’s not that hard to open a new account at a different bank or close an account,” she says.

How Do I Get a Business Loan to Start My Business?

For many budding entrepreneurs, a traditional business loan may seem like the best option for getting your endeavor off the ground. However, most banks and lenders require criteria that a newly launched business won’t be able to meet.

What are those requirements, and what are your alternatives if you can’t meet them? Here’s what you need to know.

Requirements for Traditional Business Loans

When you apply for a traditional business loan, a lender will look at your personal and business’ credit profile and financial information. Additionally, lenders are likely to require a meaningful paper history of your business revenue, income and expenses.

If you’re just launching your business the problem becomes immediately clear, since you’re unlikely to have a business credit profile OR an extensive history of revenue and expenses. For that reason, new entrepreneurs usually need to find funds through alternative means, and most will rely heavily on your personal credit profile, personal income, and may require personal guarantees.

Checking YourPersonal Credit History

Since you’re just starting your company, you don’t have a business credit profile (although you should start to establish one, which you can learn how to do here). But that doesn’t mean you’re out of luck.

The first step is to check your personal credit scores. Like bank loans, alternative business loans generally have credit requirements as well, so knowing your scores and what’s on your report will give you a better idea of what financing options you’re likely to qualify for. (You can check your personal credit score and summary report with a free Nav account.)

March 2017 Mortgage Rates Forecast (FHA, VA, USDA, Conventional)

March 2017 Mortgage Rates Forecast (FHA, VA, USDA, Conventional)
Mortgage Rates Forecast For March 2017

Mortgage ratesare poised to move big in March.

Rates have beenin a historic holding pattern, moving within a range of just 11 basis points (0.11%) since the start of the year, according to Freddie Mac.

That could change overnight.

Donald Trump addressed both houses of Congress for the first time in his presidency the evening of February 28.

Details on policy will move mortgage rates all month long.

The second Federal Reserve meeting of 2017 will take place mid-month, and rate hike is still on the table.

And, a slew of market-moving data is set to be released this month.

As a consumer, its easier to secure a mortgage rate during relatively steady times. Rapidly shifting rates can price you out of a home you want, or make a refinance irrelevant.

And, the best rates of the month might be the ones you see today.

Click to see todays rates (Mar 13th, 2017)
Freddie Mac: 30-Year Mortgage Rate Hits 4.16%

The average conventional30-year fixed rate mortgage started March at 4.16%, according to Freddie Macs Primary Mortgage Market Survey (PMMS).

The 15-year was clocked at 3.37%, and the 5-year adjustable rate mortgage — which will become more popular as rates rise — dropped to 3.16%.

Rates havent moved much since January.

Starting the year at 4.20%, the thirty-year fixed mortgage stood just four basis points (0.04%) lower to start March.

Its an advantageous time to be a mortgage rate shopper.

Though rates are up since the election — reacting to the presidents proposed policy shifts– they are in a remarkable holding pattern.

The current wait and see mode is making shopping for rates easier.

In a steady market, you shop for a home purchase mortgage or refinance, but maybe you arent ready to move forward.

You wait a day or two, and that rate is still available.

Rising rates, though, can price you out of the home you really wanted — or put you out of the money for a refinance.

Luckily, theres more than one rate in the mortgage marketplace.

Each Thursday, Freddie Mac publishes its national average rate. But the interest rate is a blend derived from a survey of more than 100 lenders.

And, it coversconventional mortgage rates only. Government-backed FHA and VA mortgage rates are not surveyed as part ofthe report; nor are mortgage rates for USDA loans.

Rates for these alternative programs are even lower than for conventional.

All of this makes iteasier for todays refinancing homeowners toqualify for streamlined loans such as theFHAStreamline Refinance,the VA Streamline Refinance, and the USDA Streamline Refinance.

Streamlined refinance loans can close in as few as 30 days because of reduced paperwork requirements and no appraisal in most cases. These refinances are simpler for banks to underwrite and approve.

Click to see todays rates (Mar 13th, 2017)
Mortgage Rates For March 2017

Todays mortgage rates are hovering in the low 4s, and many mortgage rates predictionshave them unchanged-to-higher through 2017.

Loans now cost just $490 monthly for every $100,000 borrowed, excluding escrows for taxes and insurance, private mortgage insurance (PMI), and flood insurance, where applicable.

Itshould be noted, though, that although mortgage rates are still historically low, they may not stay that way for long. Mortgage rates change quickly with the economy, and with shifts in market sentiment.

Mortgage-backed securities (MBS) — the Wall Street asset upon which mortgage rates are made — have beenwaiting for a reason to move one way or another. This has rates on shaky ground.

MBS pricing is currently responding to influences on the economy, including the Federal Reserves monetary policy, the jobs market, and forecasts for the new administrations stance on eceonomic issues.

The biggest market mover this month, though, could be the Fed.

The Fed meeting adjourns March 15

The two-day Federal Open Market Committee (FOMC) meeting — aka. Fed meeting — will take place March 14-15.

The group will either hike or hold its benchmark rate, and will reveal its decision via a statement released at 2:00 PM ET on Wednesday, March 15.

A hike this month is still on the table.

In December, the Fed voted to raise its benchmark rate by one-quarter of one percent to a range between 0.50-0.75%. The decision was unanimous.

The group let the dust settle, and made no changes to policy at its January 31-February 1 meeting. But a March move is still in play.

Inflation is near to the Feds target of 2% annually, a level the group has been waiting on for years. Unemployment is half the levels seen earlier this decade.

But the Fed is running out of time to soften the blow of a rate hike. Thats why March 3 could be a volatile day.

Federal Reserve Chair Janet Yellen will deliver a speech at 1:00 PM ET. It will be the last chance to hint at a March rate hike before the mandatory blackout period, an approximate one-week pre-meeting period during which Fed participants must nearly ceace public communications about policy.

If a hike is coming, Yellen is sure to drop a major hint on March 3.

But even if the Fed doesnt hike its benchmark Federal Funds Rate, mortgage rates could still skyrocket after the meeting.

The reason: economic projections.

Four times per year, the Fed releases its own projections on future rate hikes. Its March meeting is the first of the year that will include this report.

In December, mortgage rates rose when the Fed increased its estimate to three rate hikes in 2017, when it had called for just two within its previous guidance.

The same could happen in March upon material changes in outlook.

The Feddoesnt control mortgage ratesbut its rhetoric drives markets.

As a mortgage rate shopper, then, it pays to track FOMC meetings. As the most powerful financial body in the world, it probably has more power to move markets than the president himself.

But that doesnt mean President Donald Trump wont do his own market shaking in March.

Click to see todays rates (Mar 13th, 2017)
Donald Trump is still moving markets

Donald Trump delivered his first speech to both houses of Congress the evening of February 28.

Markets watched closely to this and any event that reveals details about upcoming policies. Uncertainty is one reason for the relative calm of mortgage rates lately.

No one wants to move until the future is more clear.

The new presidential administration is making it harder to predict rates. This would be true regardless of who won the election. Any new administration can lock in policies that move markets.

If not for this wild card, thetypical reports would guide predictions: Marchs Non-Farm Payrolls and the Federal Open Market Committee (FOMC) meeting announcement would dominate mortgage rate moves this month.

But this is no typical environment.

Since Trumps election win, the stock market has been on an upward run. And so have mortgage rates.

The administration plans $1 trillion in infrastructure spending and non-trivial tax cuts. Markets perceived these plans as inflationary.

Interest rates almost always rise in a high-inflation environment. Investors buy mortgage-backed securities that come with certain rates of return. The interest rates investors receive are directly connected to your mortgage rate.

In short, mortgage rates need to be considerably higher than the rate of inflation. Prices in the economy are rising about2% per year according to the Consumer Price Index published by the Bureau of Labor Statistics.

If inflation hits 4%, as it did as recently as 2007, you will no longer find 4% mortgage rates at your local lender or online. Ten years ago, the 30-year mortgage rate averaged 6.34%.

All eyes will be watching the Trump administration for further insight on spending plans. More important, whether a proposal could realistically make it through Congress.

If the new administration presents a viable spending package, markets could price in rising inflation to the mortgage rate market, and rates could rise.

Click to see todays rates (Mar 13th, 2017)
Mortgage Programs With Low Rates Now

Mortgage programs today come with low rates in the 4s.

But some mortgage programs come with even lower rates than that.

Ellie Mae, a mortgage software firm which processes 3.7 million applications per year, gathers data on loansrun through its system monthly. ItsJanuary Origination Insight Report was telling.

Government-backed programs, falsely perceived to have worse terms, actually carried the best mortgage rates.

The following average rates were reported byEllie Mae.

  • Conventional loans: 4.42%
  • FHA mortgages: 4.23%
  • VA loans: 4.01%

Conventional loans are the go-to program for most home buyers with large down payments, good credit, and significant assets left after closing.

But Fannie Mae and Freddie Mac — the two major mortgage rule-making agencies in the US– have rolled out new programs for a wider array of buyers. A newer option donned HomeReady(TM) requires just 3% down and is available to those with modest incomes.

The government-backed VA home loan is even easier to qualify for. It comes with lenient credit requirements and is available to home buyers who have served in the US military. There is no down payment necessary, and no monthly mortgage insurance charged.

FHA loans are extremely popular, used by about 40% of first-time home buyers in their 20s and 30s. Flexible lending requirements allow new graduates to obtain an approval just after starting their careers.

A loan program not covered by Ellie Maes report is the USDA home loan, otherwise known as the Rural Development (RD) Guaranteed Housing Loan or Section 502 loan.

It supports homeownership in less dense areas in which incomes often lag those within cities. Theres no downpayment required, and minimum credit scores are low.

USDA mortgage rates are about as low as VA ones, making them one of the most affordable home buying options on the market.

For rural and suburban home buyers, there are few better options than the USDA loan.

Mortgage rates for these programs are stilllow, and could go lower in 2017.

Click to see todays rates (Mar 13th, 2017)
This Months Economic Calendar

The next four weeks hold no shortage of mortgage-rate-moving news. Notably, watch for market reaction to President Trumps speech the morning of March 1, and the FOMC announcement on March 15.

Market-moving events for the month are as follows:

  • Tuesday, February 28 (after market close): President Trump speaks
  • Friday, March 3: Federal Reserve Chair Janet Yellen speaks
  • Friday, March 10:Non-Farm Payrolls
  • Wednesday, March 15: FOMC meeting adjourns
  • Wednesday, March 15: Consumer Price Index (key gauge of inflation)
  • Wednesday, March 22:Existing Home Salesreport
  • Thursday, March 23: New Home Sales report

March could be avolatile month for mortgage rates.The Federal Reserve is meeting, and key indicators of inflation– which is bad for mortgage rates — will be published.

Lock in now to avoid potentially negative mortgage rate fluctuations this month.

What Are Todays Mortgage Rates?

Mortgage rates are currently just above 4 percent. Home buyers have excellent purchasing power at todays rates; and refinancing households cansave more cashwith a refinance.

Get todays live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Show Me Todays Rates (Mar 13th, 2017)