How to Know When Your Business Is Ready to Grow

by Steve Heideman on February 21, 2023

Growth is an important goal for many businesses, but expanding too early can create unnecessary financial and operational pressure. Hiring more employees, entering new markets, increasing production, or opening additional locations can all create opportunities, but they also require additional resources and stronger systems.

Before making a major move, business owners should look for signs that the company is prepared to handle growth without sacrificing stability.

Revenue Has Become More Consistent

One of the clearest signs that a business may be ready to grow is consistent revenue.

Occasional strong months are encouraging, but sustainable growth usually requires reliable income over a longer period. Business owners should review revenue trends to determine whether sales are steadily increasing or simply fluctuating because of temporary demand.

Consistent revenue can provide the financial foundation needed to support additional employees, inventory, marketing, and other expansion costs.

Customer Demand Is Increasing

Growing demand is another strong indicator that expansion may be justified.

A business may begin receiving more orders than it can comfortably handle, developing waiting lists, or turning away customers because of limited capacity.

When demand consistently exceeds current capabilities, expanding operations may allow the company to serve more customers and capture additional revenue.

However, it is important to confirm that increased demand is likely to continue rather than being caused by a temporary trend.

Cash Flow Is Healthy

A profitable business can still experience cash flow problems.

Before expanding, business owners should make sure the company has enough available cash to manage both existing expenses and the additional costs created by growth.

Expansion may require upfront spending before new revenue begins to arrive. Maintaining healthy cash reserves can help the company continue operating comfortably during this transition.

Existing Systems Are Working Well

Growth tends to magnify operational problems.

If the business already struggles with scheduling, inventory management, bookkeeping, customer communication, or order fulfillment, expansion may make those issues more difficult to control.

Strong processes should be established before increasing volume. Standard operating procedures, reliable technology, and clear responsibilities can help the business maintain consistency as it becomes larger.

The Team Can Handle More Responsibility

Employees and managers play an important role in successful growth.

A business owner who personally handles every important decision may quickly become overwhelmed during expansion. Growth is usually easier when responsibilities can be delegated to capable employees or managers.

Before expanding, consider whether the current team has the skills, experience, and capacity needed to support a larger operation.

Customers Are Returning

Repeat customers can be a valuable sign of business stability.

When customers regularly return, recommend the company to others, or maintain long-term relationships with the business, it often suggests that the company is delivering consistent value.

A strong base of loyal customers can provide more predictable revenue and make future expansion less dependent on constantly finding new customers.

There Is a Clear Reason for Expanding

Growth should solve a specific business need or create a clearly defined opportunity.

A company might expand because it needs additional production capacity, wants to enter a promising geographic market, plans to introduce a new service, or needs more employees to meet customer demand.

Expanding simply because growth seems like the natural next step can lead to unnecessary spending.

Clear objectives make it easier to determine whether an expansion strategy is working.

You Understand the New Market

Entering a new market requires research.

Businesses should evaluate competitors, pricing, customer expectations, regulations, and operating costs before committing significant resources.

International growth may require even more preparation. For example, a business considering operations in Asia may need to research company formation in China along with local tax, employment, banking, licensing, and compliance requirements before establishing a presence there.

Understanding these factors in advance can reduce unexpected costs and delays.

You Have Enough Capital

Growth usually requires investment.

Businesses may need funding for new equipment, employees, office space, inventory, marketing, software, or professional services.

Before expanding, owners should calculate both the initial cost and the ongoing expenses associated with growth.

It is also wise to maintain a financial cushion rather than committing every available dollar to expansion.

Your Business Model Is Proven

Expansion works best when the existing business model already produces reliable results.

If pricing, customer acquisition, margins, and operations are still being tested, scaling the business can make it harder to identify what is working and what needs improvement.

A proven model provides a stronger foundation for entering new markets or increasing capacity.

You Can Maintain Quality

Growth should not reduce the quality of products or services.

When businesses expand too quickly, customer service may decline, delivery times may increase, or quality control may become inconsistent.

Before growing, owners should make sure the company has enough people, systems, and oversight to maintain the standards customers expect.

The Business Can Operate Without Constant Owner Involvement

A company may be better prepared for growth when daily operations do not depend entirely on the owner.

Documented processes, capable managers, and clear communication can allow the business to function effectively even when the owner is focused on strategic decisions.

This becomes increasingly important as the company adds employees, locations, or markets.

Preparing for Sustainable Growth

Being ready to grow is about more than having strong sales. A business should also have healthy cash flow, reliable systems, capable employees, clear goals, and enough capital to manage the transition.

Taking the time to evaluate these areas can help business owners identify whether expansion is a realistic opportunity or whether additional preparation is needed first.

When growth is supported by a strong operational and financial foundation, the business is more likely to expand successfully without creating unnecessary strain.

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What is “Locking a Loan”?

by Steve Heideman on October 20, 2015

When should you lock in a loan? Is there a “best time”? What happens if rates go down after you’ve locked? What if you change the loan package from 30 years to 15 years? There are consequences for changing your mind after you’ve locked in a loan, and maybe it’s not worth a switch. As it turns out you are able to switch the type of loan package you want even if you’ve already locked, the lender just goes back to the day you said “Lock in my loan” and looks at the rate for the 15 year loan instead of the 30 year you initially locked with. So whatever the rates where the day you tell your mortgage broker “Lock my loan” those are the rates they use. Rates can change daily so your initial quote from a broker might vary slightly, good or bad, depending on getting in your loan application and when you are ready to lock in.

To learn more contact Arizona mortgage broker, Mike Goblet with United Mortgage Financial Group, Inc. at 408-503-3533 or visit us online at http://www.arizonamortgagenews.com

 

Matt O’Brien: Welcome back to another segment of Arizona Mortgage News. We’re here with our local expert, Mike Goblet of United Mortgage and Financial Group. Good morning, Mike.

Mike Goblet: Good morning, Matt. How are you this morning?

Matt: Fantastic.

Mike: Great.

Matt: Sounds like we’re going to talk about what’s involved in locking a loan.

Mike: One of the other 10 things you really need to know about the mortgage process, locking is obviously an interesting part of that a lot of people feel that when they go to a bank, or they call me and they say, “Where are our rates?” and I give them a quote based upon the generalized information I have.

A lot of people think, “Well, that’s the rate. That’s what they will get.” The answer is only maybe.

Matt: Why is that?

Mike: It’s for several reasons. One, as everyone knows or I think as most people know, rates can change. As a matter of fact, they can change many times within the day. That’s not unusual. In either direction, better or worse, because they’re tied to the stock market.

Until I really take, myself, or a bank takes a complete application, runs the credit, you really aren’t giving anybody an accurate quote. Even then, until the person says, “Lock in that rate,” you’re floated which meaning you’re subject to whatever is happening to the stock market in rates at that moment in time.

I’ve tried to lock people who said, “Go ahead and lock,” and the lender’s locking desk was closed because of a rate change in either direction.

Matt: I see.

Mike: Until you say, “Lock that loan,” and until the loan officer is able to complete that, your rate is floating and subject to the market circumstances.

Now, that being said, the locking process is actually pretty simple. All I really need is the person’s permission to lock, or acknowledgement that’s what they want to do. I don’t need all the documentation to have received it in order to lock.

I can lock with somebody as soon as they say, “Lock in that rate,” and I’ve completed the application.

Matt: What happens if the rate goes down after you lock in and complete the application?

Mike: There’s two things. Once when you lock, it’s important to understand you’ve locked in to that moment in time of wherever any rates are.

That becomes important because a lot of people going through the process will say they start out with a 15year, or even a 30year then want to switch to a 20, or back to a 30, or whatever. What happens is the loan officer goes back to that time and date when the loan was locked and that’s where they get that information.

Even if you changed terms during the process, you’re still locked in to whatever was going on at that point.

Now, to answer specifically your question, what rates drop? A lock means just what a lock means. You’re locked in to that time and date, whether rates go up or rates go down.

There’s a caveat to that and I’m sure many people have heard, “Well, my bank said I could float down if rates get better.” The answer is those programs exist but they’re not without guidelines and cost, as a matter of fact, whether they’re built in to the initial rate, meaning you start out at a higher rate and it lets you float down to a certain level.

Most of what the industry calls floatdowns mean that the parameters are you need to be changing the rate at least the quarter of a percent from where you locked that and that it has an adjustment or a cost of 0.375 percent of whatever the loan amount is. For example, on a $200,000 loan, that’s a $750 adjustment.

Now, when you look at those two caveats, the situation being you really need a dramatic market change, not just some improve in the rates, to take advantage of the floatdown. The type of change that generally never happens within a 30, or 45day period. It happens over along the period of time. The reality of a floatdown is really seldom viable.

Now, it becomes a question as well as what’s your commitment now that you’re locked? In terms of the client, there really is no real commitment. When a loan officer locks somebody, it’s on the good faith belief that that person is going to proceed with the loan.

If that person locks away from a locked loan, there’s no real consequence to that client. There’s no charge that can or should be assessed against that client. There’s no obligation when you lock a loan to continue with it.

If rates do improve and you decide it’s to your benefit to change lenders within the process, you can do that without consequence. That being said, the loan officer does make a commitment. When we do that, we tell our bank or lender, “We’re going to provide you this loan. You’re going to tie up your money until we complete it.”

The bank takes that seriously because you’re tying up their money. People like myself, loan officers and companies that work through those banks, have the commitment of what they call fallout that if we provide too many loans, that fallout don’t go to completion, some lenders will drop those banks, or loan officers, or mortgage companies.

If their fallout becomes to great or maybe they won’t let them lock until all the paper work is in, there’s different consequences, but there are consequences.

Matt: Very good. As in life, there are consequences.

Mike: My real situation that I say just to client is when you lock, don’t look back. If you took a bird in the hand and that should be your real decision, you’re pretty happy with what you got, it was a good program, take it and only look forward, don’t look back.

Matt: Makes sense.

Mike: Finally, when your loan officer has locked you in, they should be sending you what’s called the locked GFE which, by the way, starting next week, that becomes something different called the loan estimate due to the changes in what’s called TRID which I will talk about in the next series.

Starting next week, there are major changes both to what used to be called the good faith and the closing documents that you sign that used to be called the HUD settlement statement. That’s for another day.

Matt: It looks like I got some funky thing going on here. I didn’t realized that that was going on.

Mike: If you didn’t. I thought you were trying to make me smile. You were very successful.

Matt: As always, great segment, Mike. For those that want to get in touch with you, what is the best way to get in touch?

Mike: You can call me at the office at (480)503-3533, call my cellphone directly at (480)220-2329, or you can email me at mike.goblet, at our company initials, @umfginc.com.

Matt: We look forward to you on the next segment, Mike. Thanks for sharing your wisdom.

Mike: I do too. I hope everybody will come back to learn what the changes that are being imposed on the mortgage industry, the consequences it will mean. By the way, like almost anything the government does, they’ll be good sides and bad sides to it.

Matt: As always. Have a great day, Mike.

Mike: You too. Talk to you soon.

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Understanding Title Insurance

by Steve Heideman on October 5, 2015

If you own a home you’ve bought Title Insurance, it’s a part of the home buying process. Unlike homeowners insurance that is ongoing coverage, title insurance and the title company works a little differently. Many people don’t understand it entirely just maybe nod their head in agreement or remember they signed the closing papers there. The role of the title company is to check the property for any liens against it and to act as a neutral third party between the insurance company and lender. Incidentally, they also act as a neutral third party holding company at closing between the buyer and the seller. It might seem like a common sense step but we sometimes forget that people commit fraud and leave behind debt or unpaid taxes often. If you fail to have the title checked and cleared then you’d be on the hook for previous owners debt. To learn more about what title insurance and what a title company does contact United Mortgage Financial Group at 480-503-3533 or visit us online at http://www.arizonamortgagenews.com/contact-us/

Matt: Welcome back to another segment of “Arizona Mortgage News Insider Update.” We’re here with our insider, local resident Mike Goblet of United Mortgage and Financial Group. Good morning, Mike.

Mike Goblet: Good morning, Matt. How are you?

Matt: Doing quite well in this fine Arizona weather we have.

Mike: Yes. It’s the monsoon season.

Matt: Yes, indeed.

Our title today looks like a good one. “What Is Title Insurance and Why Is it Necessary?”

Mike: Yeah, title insurance is part of every mortgage transaction, but people rarely understand what it’s about and why it is necessary. I thought it would be a good clarification point.

Matt: Excellent.

Mike: If you’re buying a home, there’s really only one step to the process…excuse me, if you’re refinancing your home, but if you’re purchasing, it’s two step.

Even before we get into those steps, let’s talk a little bit first about the title company and their role. They are designed to be a neutral third party assisting in the transaction. And they end up doing much of the work regarding the title search.

In a purchase, they also provide another role in that as the escrow company between the buyer and the sellers handling the cash. Again, as a neutral third party.

What they do in terms of the title insurance is they do the search for what are called any “clouds” on the title for the ownership of the property. That any liens that might be filed by somebody, they check to see.

Then the title company, they are the ones who issue what’s called a “Loan policy” for the property that assures that the lender, or the new lien holder that number one, there are no clouds on the title and number two, that they are in the first position of that lien.

Matt: Makes sense.

Mike: That’s a consistency to whether it’s a purchase or whether it’s a refinance. But now the next step, if it’s a purchase, there’s also an extended search that needs to be done to make sure going back further in history.

You can picture on a refi, you’re talking about a continuation or retained ownership. There’s lesser things that could have happened to that title. If there’s been different transactions going on, the history needs to be deeper and a stronger amount of research.

Now, in a purchase, this is called an “Owner’s title policy,” and it’s usually paid for by the seller. OK? It’s more in depth and actually costs more, but it’s required before the title company will issue that lender’s policy that insures the lender that they’re in that first position.

The only caveat I might make to that is it seems like in most builder situations, builders usually end up making the new buyer pay for that policy as well. As I said, normally it’s paid for by the seller.

The question is, what are they looking for? And why is this necessary? Well, the obvious is that they’re looking for such things as court filed liens, like a mechanic’s lien for work that may have been done against the property. The mechanic or the person that did the work not getting paid can file a lien.

HOA’s can file liens against homes and properties. Tax liens often happen. These are the most common, OK? And the easiest part.

The title company in its due diligence must go deeper. For instance, they also check that the title and the deed for any omissions or errors. They have to search for fraud or forgery that may have occurred on the policy. Things that we say, “Well, this can’t happen.” No, the mortgage meltdown proved this can happen, and it’s why title policies and the research regarding it become even more important.

But there’s even nuances out there that we never even think about, like conflicting wills against the property that may exist due to just variations that may have happened during the property’s ownership.

Or undiscovered heirs that can come out of the woodwork saying, “I didn’t know about it, and now I have a claim against the property.” The title company will do the research against that, and candidly will even provide an insurance policy, but it’s not the same one that the lender policy is. It’s a separate program that you might want to buy, for instance, as the homeowner, called the “Owner’s policy.”

You can see this can get a little complicated, although at the end, we just go, “No, it’s all clean.” There’s a lot of research that needs to be done to make sure that the ownership of a property is consistent and there’s nothing out…any encumbrances out there that could affect that purchase or the ownership.

Matt: Is this something that the insurance companies do the research on to investigate?

Mike: Well, the title company does the research for the insurance company. Actually, you even remember in a prior dialogue we had here, it’s the underwriter’s job to make sure for the lender that there are no liens, again, that are on there. But the title company is the one who did the work for both the insurance company and the underwriter.

Matt: Got you.

Mike: A lot of people then wonder about the fees. Well, generally it’s a very competitive industry. And the fees are usually very comparable, but title and the choice of title is something you can choose if you want to do the research and pick your own title company. OK?

Usually in a purchase transaction, the buyer’s Realtor chooses the title company. OK? But even sometimes a FSBO transaction or a cash transaction, you’re going to want to use a title company to make sure that everything remains there, whether it’s required or not, because there’s not a mortgage there.

The role of a title company is very important.

Matt: As always.

Mike: Bottom line. It’s a requirement for every new mortgage, even if you’re purchasing, as I said, purchasing for cash you’d be foolish not to get it. I just hope this helps you understand a little bit about what you’re getting for and why you’re paying for it.

Matt: It sure does. Well, if anybody has questions regarding title insurance or just mortgage questions in general, what’s the best way to get in touch with you, Mike?

Mike: Well, obviously you can call me here at the office at 480‑503‑3533. Call my cell phone directly. Happy to talk with you at any time, even after hours. Traditional business hours or weekends. That’s 480‑220‑2329. Or email me at mike.goblet at our company initials, umfginc.com.

Matt: Very good. Thanks for another enlightenment or weekly dose of good information.

Mike: Well, happy to provide. Look forward to our next one. It will be a wrap on the things to know about the loan process.

Matt: Very good. Have a good day, Mike.

Mike: Thanks, Matt. We’ll talk to you soon. I look forward to talking to anybody that has questions.

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Understanding the Underwriting process

September 22, 2015

Underwriting: it’s talked about a lot during the mortgage process but what actually do they do? It’s like a mysterious dimension that a pile of all your financial information just floats around in “Underwriting World”, before getting spit out as approved or denied. Mike Goblet, of United Mortgage Financial Group gives the insight of what […]

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Understanding The Appraisal Process

July 20, 2015

The appraisal of your home is a necessary part of the mortgage process.  It also might be the least understood part.  A lot of nuances are involved of the appraisal process and can be confusing to many people.  The appraisal takes into account square footage, lot size, pool, extra buildings on the land, etc.  It’s […]

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Choosing the Right Rate and Program

July 1, 2015

There are a lot of different things to consider when selecting a mortgage.  It’s not as easy as “I’ll take the lowest rate today.”  There are things your loan provider should ask you as everyone’s situation is different and their goals in owning a home are different.  You may have done your “homework” and decided […]

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Debt-To-Income Ratio – Part 4

June 25, 2015

On this episode of Arizona Mortgage News: Insider Update, Mike Goblet, of United Mortgage and Financial Group discusses DTI.  DTI is Debt-to-Income Ratio. It has to do with how much money you make versus what your bills are. Pre‑mortgage meltdown, people used to be able to do things like just stated income.  Unfortunately, with the […]

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Two Acronyms to Learn – LTV & PMI – Part 3

June 18, 2015

In today’s episode, resident Arizona Mortgage expert Mike Goblet  talks about some tricky acronyms – LTV & PMI. LTV is “Loan to value.” LTV is one of the key elements in determining a mortgage and what the rate will be.   LTV stands for the percent of ratio of money you are borrowing versus the value […]

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Qualifying for a Mortgage – Part 2

June 10, 2015

If you want to qualify for a mortgage in Arizona, the best place to start is at United Mortgage Financial Group. First, there is an application.  Then, a credit report is pulled to determine your eligibility and DTI.  DTI is debt to income ratio which should not be more than 38%.  Once everything is reviewed, […]

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The Impact of your Credit Scores – Part 1

May 28, 2015

The first of a 10 part series on what you need to know about mortgages. Today, Mike Goblet talks about the impact your credit score has on qualifying for a mortgage.  Banks use your credit score as the first determination of risk you pose to them of defaulting.  It becomes the foundation for the whole […]

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How To Shop For A Mortgage

May 11, 2015

The first thing you should always do when you start looking for a mortgage, is to shop for it. Checkout other lenders and see what the programs are.  Don’t ever assume the first offer your getting is likely to be your best offer.  It is important to get to the bottom line.  To do that, […]

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3 Questions You Need To Ask When Trying To Decide To Buy or Rent!

April 29, 2015

There are three questions that everyone should ask when thinking about renting or buying. 1. How long do you think you’ll be in that place that you’re going to move into? If you’re only going to in your new home for two years or less, in most cases, it’s probably more beneficial to rent than […]

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3 Reasons Why the First Half of 2015 Will Be The Best Time to Buy a Home or Refinance

January 21, 2015

If you are in the market to buy a new home, now is the best time to buy. All indications point to the first half of 2015 being the best time to buy a new home or refinance. With rates now close to the lowest levels they were in 2013, makes it better in terms of […]

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Changes to Fannie Freddie that may help Home buying easier for many people in 2015

January 9, 2015

Some changes have come into effect for 2015 that might make home buying easier in the Phoenix area. Earlier this year Fannie and Freddy changed their guidelines that almost all lenders use. Which is, they allow gift money from a family member to be used up to 100 percent of the down payment. So, for […]

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The 3 Most Important Things A New Home Buyer Should Be Doing Before Beginning To Look!!!

October 16, 2014

There are things people should be doing before making the decision “I want a new home.” There are things that will make the process easier for them, to help them overall in finding the right home, and equally as important, the right mortgage product. It is important before you even begin to look to: Know […]

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New Changes in Guidelines if you have had a recent Short Sale

September 24, 2014

In August of 2014 this year, Fannie May changed their guidelines. For homeowners who have had a short sale, in the past, the guidelines made homeowners wait two years if the were putting down 20 percent and four years if you were putting down 10 percent.  However, this August, the guideline has now been changed to […]

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Learn: When Choosing a Higher Interest Rate Can Give You a Lower Monthly Payment

September 2, 2014

It is an interesting concept – save money every month at a higher interest rate?  That doesn’t make sense.  Mike Goblet of United Mortgage Financial Group of Phoenix Arizona explains how. When choosing a higher interest rate, you can do those things, including giving you a lower APR. However, to get the lower rate, you […]

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What are the Advantages of a VA Mortgage?

July 24, 2014

Being a veteran provides a lot of benefits that the government supports. One of the real advantages that has been around for many, many decades has been the VA mortgage loan.  The VA loan is one of the best programs out there.  The pricing is significantly better with a VA loan than that of a […]

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Why Don’t Banks let you choose your own rate?

July 8, 2014

Wouldn’t it be nice to choose your own rate?  Well, you can.  In this edition of Arizona Mortgage News, local expert Mike Goblet of United Mortgage and Financial Group discusses what banks provide you during the mortgage process and why being armed with information prior to getting a mortgage can save your thousands of dollars. […]

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Getting Down Payment Money Just Got a Little Easier

June 27, 2014

In the past, obviously, one of the biggest problems that people have had is saving enough money for the down payment. Particularly, for first time home buyers, that’s a big obstacle. As home prices have risen, the amount of money that’s needed has always gone up proportionately as a result and become an obstacle for […]

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