Mortgage

Owning real estate is extremely fulfilling and is one of the biggest investments you will make during your lifetime. If you have been thinking about a different home, refinancing an existing home loan, using the equity in your home, or becoming a landlord, let one of our mortgage bankers take the worry out of the financing.

  • Type of Loans

    The sooner you visit with one of our mortgage bankers, the sooner we can advise you on next steps and help you be prepared to take action. We offer a variety of home loan options to assist you.

    Conventional Loans

    A conventional mortgage is any type of homebuyer’s loan available through or guaranteed by a private lender such as banks, credit unions, mortgage companies, or the two government-sponsored enterprises; Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac). These loans are not offered or secured by a government entity, like the Federal Housing Administration (FHA), the U.S. Department of Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA) Rural Housing service.

    A conventional conforming mortgage is one whose essential terms and conditions meet the funding criteria of Fannie Mae and Freddie Mac. Primarily among those is a dollar limit, set annually by the Federal Housing Finance Agency (FHFA). Currently, in most of the U.S. a loan must not exceed $424,100. When a loan exceeds this dollar limit, it is considered a non-conforming or jumbo loan.

    Apply Now      Contact a Local Mortgage Banker

    Fixed Rate Mortgages

    With a fixed interest rate loan the interest rate does not change during the lifetime of the loan. This allows the borrower to know exactly what their principal and interest payment will be. While taxes and insurance costs on the property may change from year to year, a fixed rate mortgage is a fully amortized loan where the interest rate on the note remains the same throughout the term of the loan.

    Apply Now      Contact a Local Mortgage Banker

    Adjustable Rate Mortgages (ARMs)

    An adjustable-rate mortgage, also known as a variable-rate mortgage, is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost of funds to the lender. The loan may be offered at the lender’s standard variable rate/base rate. 

    Adjustable rates transfer part of the interest rate risk from the lender to the borrower. The borrower benefits if the interest rate falls but pays more interest if the rate increases.

    The most common indices are the rates on 1-year constant-maturity treasury (CMT) securities and the cost of funds index (COFI). A few lenders use their own costs of funds as an index, rather than using other indices. This is done to insure a steady margin for the lender, whose own cost of funding will ususally be related to the index. Consequently, payments made by the borrower may change over time with the changing interest rate (alternatively, the term of the loan may change).

    Apply Now      Contact a Local Mortgage Banker

    First-time Homebuyer Loans

    A first-time homebuyer is defined as an individual who has had no ownership interest in a principal residence during the prior 3-year period. First-time homebuyer programs typically offer lower rates and have income restrictions. Let one of our mortgage bankers help determine if you meet the requirements for a first-time homebuyer loan. We work with these first-time homebuyer agencies.

    Apply Now      Contact a Local Mortgage Banker

    US Department of Agriculture (USDA) Rural Development Loans

    USDA’s 502 Guaranteed Loan Program assists approved lenders in providing low- and moderate-income households the opportunity to own primary residences that are adequate, modest, decent, safe, and sanitary in eligible rural areas. Eligible applicants may build, rehabilitate, improve, or relocate a home in an eligible rural area.

    Click here to learn more.

    Apply Now      Contact a Local Mortgage Banker

    Veterans Administration Loans

    The Veterans Administration (VA) helps service members, veterans, and eligible surviving spouses become homeowners. As part of their mission to serve, they provide a home loan guaranty benefit and other housing related programs to help veterans buy, build, repair, retain, or adapt a home for their own personal occupancy.

    A VA home loan allows qualified buyers the opportunity to purchase a home with no down payment. Also, there are no monthly mortgage insurance premiums to pay.

    Click here to learn more about VA home loans.

    Apply Now      Contact a Local Mortgage Banker

    Construction Loans

    A construction loan is typically a short-term loan used to pay for the cost of building a home. It may be offered for a set term (usually six months to a year) to allow you the time to build your home. The builder or home buyer takes out a construction loan to cover the costs of the project before obtaining long-term financing.

    Apply Now      Contact a Local Mortgage Banker

    Home Equity Accounts

    A home equity account is a second mortgage. Your first mortgage is typically the mortgage used to purchase your home. You can use home equity accounts to borrow against the property if you have built up enough equity. The down payment you made when you purchased your home and the monthly principal payments you’ve made since that time, along with any potential increase in property value, creates equity. You can use this equity to make home improvements, pay for college tuition, consolidate debt or go on vacation. Dacotah Bank offers the following home equity accounts:

    Home Equity Loan

    With a home equity loan, you borrow one lump sum and make fixed monthly payments on that amount for the entire length of the term.

    Home Equity Line of Credit (HELOC)

    A home equity line of credit provides a pre-approved amount of credit that allows you to draw funds up to your maximum credit line. You make payments and pay interest only on the amount you use. You can borrow the funds from the HELOC; pay it back; and borrow it again.

    Bridge Loan

    If you need temporary financing, a bridge loan may be your best option. Typically, these are interest only loans taken out for 12 months or less. This gives you the ability to purchase your new home while waiting for your current home to sell.

    Apply Now      Contact a Local Mortgage Banker

    Jumbo Loans

    A jumbo loan is a larger loan needed when the amount exceeds the conforming loan limits set by the Federal Housing Finance Agency (FHFA). As a result, it is not eligible to be purchased, guaranteed or securitized by Fannie Mae or Freddie Mac. Designed to finance luxury properties and homes in highly competitive local real estate markets, jumbo loans come with unique underwriting requirements and tax implications.

    FHFA sets the conforming loan limit size for different areas annually. The limit has generally been over $400,000.

  • What to Expect

    Buying a house can be an overwhelming and complicated process. Our mortgage bankers are here to walk you through each step of the process making it a stress-free experience. While you are busy getting ready to move we can take care of the financing.

    • Step 1 – Getting Pre-qualified

      The first step to your new home or refinance is filling out an application. You can choose to come in, call, or click. Be sure to fill out your application as accurately as possible. We use this information to determine your monthly payment, the loan amount for which you may qualify, cash needed for closing, and determine which loan program may be best for you. If you are buying, this will give you the needed information to find your next home.

    • Step 2 – Processing

      Once you have reviewed the loan estimate (LE) and are ready to proceed, we will begin processing your file. This includes ordering the appraisal, title commitment, survey, and any verification requests that are needed. If there are any irregularities on your credit report, we will work with you to get them resolved as well. This is when you will be provided with a list of items we need from you. The sooner you provide these items, the sooner we can proceed to underwriting.

    • Step 3 – Underwriting

      Once your loan file is complete, it is submitted to an underwriter for review. Their job is to review everything and ensure your loan is accurate and well documented. If there are missing items or necessary clarifications, they will request the information from your mortgage banker and your mortgage banker will work with you to resolve any issues.

    • Step 4 – Closing

      After the underwriter gives us the ‘clear to close’ we are ready to sign the closing disclosure. This disclosure contains a summary of your loan including the term, rate, monthly payment, closing costs, and the amount of check or funds to close. A three-day waiting period is required by regulation. Once this time passes we are ready to sign loan papers.

      Loan closing can take place at a title company or settlement agent’s office. If you are buying a house, it is customary for the sellers to be in attendance as well and it provides you the perfect opportunity to ask any last minute questions about the property. Your mortgage banker will work with your Realtor and settlement agent to coordinate the signing of the paperwork. There are a lot of papers to sign, but once you have finished, the keys are yours!

  • Get Pre-Qualified

    To have one of our local mortgage lenders help you get started, please call, click, or come in to visit with your Local Lender or Contact Us.

  • Loan Servicing

    Purchasing a home may be a very complicated process. We want your loan to be as easy and convenient as possible, so qualifying loans may be serviced here at Dacotah Bank. You will get the same exceptional service you have come to expect.

    Eliminate the worries and hassles that can arise when you work with large, out-of-state loan servicing departments! We would love to be your trusted experts for your real estate financing.

    Call, click, or come in to learn more!

    • Payments
      • The payment due date for your loan is specified on your note
      • There is a grace period from the date of your payment due date until a late fee is accessed
      • There are no pre-payment penalties and you are able to prepay your mortgage loan by accelerating your payments
      • Additional principal payments, sometimes referred to as curtailments are permitted
      • Additional principal payments will reduce the amount of interest you pay over the life of your loan
      • When making additional payments, please indicate if your intent is to make an additional principal payment
    • Payment Options

      Automatic Payment Withdrawal is recommended

      Or mail it to -

      • Simply complete the Authorization Form
      • Authorization Form
      • Email the form to mortgage.servicing@dacotahbank.com
      • In-house Servicing
        Dacotah Bank
        PO Box 1950
        Aberdeen, SD 57402-1950
    • Transfer Funds from one Dacotah Bank account to another Online!
    • Escrow Management

      If you escrow for your tax and insurance payments, we will –

      • Pay your financial obligations timely and accurately
      • Provide you an annual escrow analysis including historic and future payment information and inform you of any changes to your payment.
      • When your escrow analysis is completed, there may be an escrow surplus. This means that more funds were collected than needed to pay future obligations. If your surplus is over $50, a refund check will be mailed to you.
      • When your escrow analysis is completed, there may be an escrow shortage. This means that not enough funds were collected to pay future obligations. You may pay this shortage in one payment or have it added to future loan payments.

    If you choose not to escrow, proof of insurance and payment of real estate taxes will be required.

    If your insurance coverage lapses, Dacotah Bank will force-place insurance to cover your home.  This pertains to both hazard insurance and flood insurance. Force-placed insurance will only protect the lender – not the property owner. This insurance is more expensive than insurance purchased by the property owner. The payments of force-placed insurance premiums are the responsibility of the property owner.

    Mortgage insurance is required if your loan amount exceeds 80% of the appraised value of your property. Mortgage insurance protects the lender in the event the mortgagor discontinues making payments on the loan. Mortgage insurance premiums will be escrowed. Cancellation of mortgage insurance is allowed under certain circumstances.

    • Account Status

      Maintaining a current account status will improve your credit rating. When your account becomes past-due, it may be reported to a credit bureau. Late payments, missed payments, or other defaults on your loan will negatively affect your credit rating.

    • Online Capabilities

      Dacotah Bank’s online banking is available 24 hours a day and gives you access to all your Dacotah Bank accounts.

      • Account balance
      • Interest rate
      • Principal and interest amounts due
      • Escrow balance
      • Payment information and activity
      • Transfer funds between accounts
      • Get the free mobile app!
      • Enroll in mobile deposit!
    • Timelines
      • Billing statements will be mailed monthly
      • Delinquent accounts will be assessed a late fee once the grace period has elapsed
      • We report positive and negative credit information monthly to the credit reporting agencies
    • Error Resolution or Dispute

      If you believe your account information is inaccurate, please Contact Us.

      • By Mail

        Mortgage Loan Servicing
        Dacotah Bank
        PO Box 1210
        308 S Main St
        Aberdeen, SD 57402-1210

      • By Email

        mortgage.servicing@dacotahbank.com

      • By Phone
        • (605) 622-6363
        • Toll Free – (800) 881-5611, Option 9
        • Fax – (605) 725-4850
    • Property Damage

      Damage to your home can be overwhelming. Let us help!

      Dacotah Bank is here to help you through the financial aspects of major home repairs. We will guide you in what type of documentation you will need to gather from your insurance provider and contractors.

    Experiencing Financial Difficulty

    If you are having financial difficulty please contact Dacotah Bank as soon as possible. The sooner we understand your situation, the sooner we may be able to assist you. The following options may be available if you become past due.

    • Refinance your loan with us or another lender
    • Modify your loan terms
    • Commit to a repayment plan
    • Ask for a payment forbearance which temporarily gives you more time to pay your monthly payment

    If you are not able to continue paying your mortgage, there may be alternatives to foreclosure. Your best option may be to find more affordable housing. As an alternative to foreclosure, you may be able to sell your home and use the proceeds to pay off your current loan. In some situations a short sale or deed-in-lieu of foreclosure may be an option. Call your mortgage banker for assistance.

    For mortgage counseling or assistance information visit the U.S. Department of Housing and Urban Development's (HUD) website.

    If you would like information for counseling agencies or programs in your area, call the HUD at (800) 569-4287 or visit the U.S. Consumer Financial Protection Bureau website.

    Beware of Foreclosure Prevention Scams

    Foreclosure Prevention Scams exist! Beware of any person or company that –

    • Asks you to pay a fee
    • Promises to stop a foreclosure
    • Guarantees loan modification
    • Instructs you to redirect payments to them instead of your mortgage servicer
    • Pressures you to sign over the title to your property
    • Forces you to sign paperwork you have not read or understand
    • Offers government program loan modification
    • Requests personal information online or over the phone from someone you do not know or have not previously worked with

    If you believe you have been a victim of a foreclosure rescue scam, visit www.preventloanscams.org or call (888) 995-4673.

    Contact Information Changes

    If your name, telephone number or address changes, please call, click, or come in to provide us updated information. 

     

  • Frequently Asked Questions (FAQs) / Glossary

    Frequently Asked Questions (FAQs)

    • What is an Annual Percentage Rate (APR)?

      An abbreviation for annual percentage rate, APR is how much your loan will cost over the course of a year. This figure is usually higher than the interest rate because it takes into account the interest charged as well as any fees or additional costs. Since all lenders use the same formula, it is a fair way to compare the cost of a mortgage rather than just the interest rate.

    • What is a credit score?

      A credit score is a number that represents a person’s creditworthiness. Typically a three-digit number from 300 to 850, it is a product of a mathematical model that evaluates an individual’s credit report information and, based on the analysis of millions of credit transactions used to build the model, produces the score.

    • How is a credit score used?

      Some landlords use credit scores when vetting prospective tenants. Property and casualty companies use them in underwriting insurance applicants. Mortgage lenders, insurers, and investors use them to determine whether they are willing to make, insure, or purchase mortgage loans and at what price.

    • Is there more than one credit score?

      Yes. Three companies serve as the main repositories of borrower credit data. There are several credit score vendors that use that data. There are also many companies who sell reports containing credit data and scores, sourced from those repositories and score vendors. Each credit score vendor has a different approach and some have several models designed for a particular purpose, such as auto lending or mortgage lending. In addition, there are multiple versions of scores available as credit score providers work to improve the predictive power of their scores. In the case of mortgage lending, each borrower’s credit report comes with three credit scores, one from each of the three repositories.

    • Is one score better than another?

      It depends on what you are trying to accomplish. If your goal is to use the score with the greatest predictive power for a particular type of financial forecasting, you may choose a score different from the one you would use in the origination of a mortgage loan. In the case of mortgage lending, most lenders use the same version from the same credit score provider largely because it has been the de facto standard for many years. That is not to say that some mortgage lenders aren’t using other versions of that score or scores from other providers.

    • Why does a score for monitoring purposes often differ from the score a lender obtains during an application process?

      There are several reasons scores may differ. First, credit report information is dynamic. Creditors regularly submit updated information to credit repositories. Because credit scores are derived from the dynamic data in the credit repositories, credit scores can change regularly. Second, there are multiple credit score providers, each with different scoring models. Third, each credit score provider has multiple versions of its score in the market at any given time. Finally, not all creditors report to credit repositories. Those that do may not be reporting accurately or in a timely manner (although that has improved significantly over the years).

    • What are closing costs / settlement fees?

      Closing, or settlement fees, include but are not limited to loan origination fees, appraisal fees, title searches, title insurance, surveys, taxes, recording fees, and credit report charges. These fees are paid in addition to the price of the property by the buyers and sellers to complete a real estate transaction.

    • What is an escrow account?

      Escrow accounts are usually required by lenders to cover property taxes, homeowner’s insurance, flood insurance, and mortgage insurance. After an initial deposit, borrowers make monthly escrow payments as part of their mortgage payment.

    • What is a Loan Estimate (LE)?

      A loan estimate is an accurate estimation of fees associated with a loan provided to the customer by a mortgage lender or broker. A LE is required by law under the Real Estate Settlement Procedures Act (RESPA). The estimate must be provided within three business days of applying for a loan.

    • What are points?

      Borrowers can pay a lender points to reduce the interest rate on the loan, resulting in a lower monthly payment. The cost of one point is equal to one percent of the loan amount. Depending on the borrower, each point can lower your interest rate by one-eighth to one-quarter of one percent.

    • What does it mean to lock your interest rate?

      Until you have locked in the interest rate with your lender, the rate on your loan can change. Typical rate locks are good for up to 90 days but can be longer depending on your type of loan. Speak with our experienced mortgage banker to help guide you.

    • What is the requirement when I am getting gift funds to close?

      The receipt of gift funds is a great way to help with the costs of purchasing a home. However, there are certain documentation requirements when utilizing this method to help with your down payment and closing costs. Speak with your mortgage banker to learn the details.

    Glossary

    • Initial interest rate

      The beginning interest rate on an ARM.

    • Adjustment period

      The length of time the interest rate on an ARM is scheduled to remain unchanged. The rate is reset at the end of this period and the monthly loan payment is recalculated.

    • Index rate

      Most lenders tie ARM interest rate changes to changes in the index rate. Lenders base ARM rates on a variety of indices, the most common being rates on one, three, or five-year Treasury securities.

    • Margin

      The percentage points that lenders add to the index rate to determine the ARM’s interest rate.

    • Interest rate caps

      The limits on how much the interest rate or the monthly payment can be changed at the end of each adjustment period or over the life of the loan.

    • Initial discounts – (Sometimes known as ‘Teaser Rates’)

      Sometimes used as a promotional aid, an initial discount offers a lower interest rate the first year of the loan. The interest rate would increase the following year.

    • Negative amortization

      This means the mortgage balance is increasing. This occurs whenever the monthly mortgage payments are not large enough to pay all the interest due on the mortgage. This may be caused when the payment cap contained in the ARM is so low the principal plus interest payment is greater than the payment cap.

    • Conversion

      The agreement with the lender may have a clause that allows the buyer to convert the ARM to a fixed-rate mortgage at designated times.