House Shopping 101

For many house hunters the search for their first home is an intimidating process. We have compiled some info and some pointers to help make the process as smooth as possible.

AGENT versus REALTOR:

You have probably heard various terms to describe real estate sales people: realtor, agent and broker. The term “realtor” is actually a trademarked term of the National Association of Realtors. Only real estate agents who belong to a NAR-affiliated organization may call themselves “realtors.” The real estate “agent” and “broker” are defined by the different state-issued licenses they attain.

HOW TO CHOOSE THE BEST REALTOR FOR YOUR NEEDS

There are several steps you should take when searching for a realtor.

1. Ask around and get referrals from your friends
2. Research the license online
3. Google their names to see if they may have won any awards
4. Look for certain designations, such as CRS (certified residential specialist), ABR (accredited buyer’s representative) and SRES (senior real estate specialist)
5. Check out their current listings
6. Ask specific questions about the neighborhood to see how in touch the realtor is with the area

WHAT IS MLS?

MLS is the multiple listing service, which compiles an extensive database of available properties offered by a wide variety of realtors and agencies. There are many online websites that allow consumers and real estate professionals to access these listings.

SHOULD YOU CHECK OUT OPEN HOUSES?

The open house used to be a primary tool in the realtor’s bag of sales “tricks.” However, recent studies have shown only about 9% of home buyers found their home through an open house. The open house has been replaced to a large extent with virtual online tours.

ADDITIONAL POINTERS

• Do not even tempt yourself with homes over your budget.
• Do not shop alone. Feel free to invite a friend with home shopping experience to your house hunting journey.
• Ask why the seller is so motivated to leave their home. It may not be the “Amityville Horror,” but there may be a very good reason why they are fleeing the neighborhood.
• Check inside every door – even the closets.
• Make notes and take photos (with permission).
• A tape measure is a very helpful tool – especially if some rooms seems a bit small for your furniture.
• Visit sites such as Google Maps and Zillow to get additional information about the neighborhood, schools, etc.

THE HOME STRETCH

When you are ready to make an offer, please contact AltaOne’s real estate department. We offer some of the most competitive real estate rates, and our team of professionals make the process extremely pleasant.

  http://www.rightmove.co.uk/overseas-magazine/files/2012/09/house-hunting.jpg

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Helpful HELOC Facts

Your home provides solid shelter and comfort. But it can also help pay for life’s expenses. If you are a homeowner and you have paid down a chunk of your mortgage, having a home equity line of credit, or HELOC, could be a good way to tap into extra funds when you need them.

Here are some basics on how HELOCs work and how to know if one is right for you.

1. The amount of financing is based on your home’s value. When you apply for a HELOC, you’re offering your home as collateral, and many financial institutions will lend as much as 80% to 85% of the home’s value minus the mortgage balance.

For example, say your home is worth $300,000 and you owe $200,000:

●     80% of home value: $240,000

●     Amount owed on first mortgage: ($200,000)

●     The difference: $40,000

So you could obtain a HELOC of up to $40,000 in this scenario.

2. You are not charged interest until you withdraw money. Once you are approved by a lender like Alta One Federal Credit Union, you do not have to spend HELOC funds right away. You also do not have to start paying interest until you use the line of credit.

Paying back a HELOC works differently than with other types of financing. The line of credit may have a term of around 10 to 20 years, and the first part of that term, which could be five to 10 years, is generally a “draw” period. During this time, you could borrow against the line of credit and may only have to pay back the interest on the financing you use. After the draw period, you may no longer borrow against the credit line and you start paying back the principal plus interest.

Because of this feature, your monthly HELOC payments may initially be lower than if you took out a fixed home loan. But the line of credit payment could increase by the latter part of the term. And it is important to make your payments, because you could lose your home if you default.

HELOC interest rates can vary based on the markets, just as with credit cards. But generally speaking, they are lower than credit card interest rates. During the HELOC application process, you may have to pay fees normally related to applying for a home loan.

3. Interest can be tax deductible. Because a HELOC is secured by your home, you could receive a home mortgage interest deduction on your taxes. Interest fees are generally tax deductible up to $100,000 for lines of credit taken on first or second homes.

4. HELOCs are often better for multiple purchases. If you know you need a chunk of money for one set purpose, like to remodel a kitchen, then a loan may be an easier option. But if you need access to different amounts of cash several times, say for repairs around the house if various appliances break down, and to cover medical expenses, then a HELOC could be your best option.

5. They can also be better for unexpected expenses. HELOCs can be good if you need a safety cushion, in addition to your savings, to prepare for unexpected bills. With a regular home loan, it could take a few weeks for approval, which means it would be weeks before you receive any funds. And once you receive the money, you have to immediately start paying back the home loan with interest, which means it would not be ideal to save for emergencies.

But if you are approved for a HELOC before an unexpected event occurs, you could have quick access to the line of credit and could use it at a moment’s notice.

If you own your home and have equity, a HELOC is an excellent source of funding. By understanding what it is and how it works, you will have the tools to help decide if a HELOC is the best product to meet your needs.

Margarette Burnette NerdWallet http://www.nerdwallet.com/

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Should I Get a Credit Card or a Loan for My Business?

All small-business owners need a little financial help to run and grow their enterprises at some point, whether it is to hire more employees, buy new equipment or market a recently launched product.

But how to meet these ongoing capital requirements — with a business credit card, term loan or line of credit — can be confusing.

Credit cards: easier approval, perks and flexibility at a cost

A business credit card provides a revolving line of credit, just like a consumer card. This means you can use and repay the credit line as many times as you want, as long as you make the minimum monthly payments and the balance doesn't exceed the account's credit limit.

Some 65% of small business owners use credit cards on a frequent basis, according to the U.S. Small Business Administration. Collateral is not required, which means no assets are pledged as security for repayment of any debt outstanding.

So what are the drawbacks? Because the charge amounts to an unsecured loan, cards tend to carry much higher interest rates than loans backed by collateral. Most business credit cards come with variable rates, so the amount of interest you pay on the card balance can change, depending on a market gauge like the prime lending rate used in the banking system.

Having a high balance on each card can negatively affect your credit scores. Both your business and personal credit score take your credit utilization ratio into account, so keep this in mind before racking up too much debt.

Business loans: lower interest costs, but tougher approval

Business loans generally come in two forms: a term loan, which provides a lump sum of money at closing, repaid monthly at a fixed interest rate, and a line of credit. This is a variable-rate loan similar to how a credit card works, as you have access to a specific amount of money — say, $20,000 — and you can borrow and repay funds up to that limit as many times as you wish.

Term loans typically involve larger sums and are better suited for financing big-ticket items, such as new equipment, real estate, purchasing other assets or to refinance an existing debt. Lines of credit often are better for supplying working capital, as they provide flexible, convenient access to funds. The interest rate you receive on a business loan is likely to be far better than what you pay on a business credit card balance.

Keep in mind that term loans are generally backed by collateral, which means you'll have to pledge an asset to secure the debt. The lending requirements are also far more stringent for business loans than for a credit card.

The bottom line

Business credit cards come with numerous advantages over term loans and lines of credit, such as rewards for spending, 0% interest introductory rates, sign-up bonuses and the ability to track spending. However, because of high interest costs and other fees, they are generally better suited for smaller regular expenses, or for business owners who ca not qualify for other types of financing.

Business term loans are generally a better way to go if you're looking to refinance an existing debt. Business lines of credit are typically more appropriate for short-term working capital and may carry much lower rates than credit cards.

If you would like more information about AltaOne’s business credit cards, please feel free to visit our website.

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Produced by NerdWallet

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May 11, 2015

 

 

 

Plan Now for Your Summer Vacation

 

Waiting until the last minute to plan your vacation often results in higher costs and increased stress. Instead of winging it, use these tips to plan ahead and save on your getaway.
 
Choose your destination

Every travel destination typically has a high season (i.e., the “expensive season”), and a low season, when it is less expensive and not as crowded. Some places also have an in-between “shoulder” season. As you select your destination, learn the peak travel times for that area. If you are trying to save, visit during the low season to enjoy bargain hotel rates and airline tickets.

 
The trade-off is that popular attractions may be closed or hours limited.
 
Before you book, check the weather. In some parts of the world, the low season equals rainy season.
 
Booking travel

As you begin to research travel options, shop strategically and hunt for deals. Use websites like Hipmunk and Kayak to compare airline and hotel rates. Airlines frequently run special promotions, so follow your favorite airlines on social media and sign up for their email lists so you do not miss a deal.

 
Be strategic about when you book and when you travel, too. One online comparison site found the most economical time to buy tickets is 47 days before your flight. Avoid booking in the final two weeks when prices skyrocket, although some airlines offer steep discounts on last-minute fares.
 
Saving for your trip

Get a clear picture of how much you expect to spend, from big-ticket items like plane tickets and hotel rooms, down to your daily food budget and admission to attractions. Do not forget about shopping money and transportation costs, whether you use the subway or a rental car. Another study shows the least costly days to fly are Tuesdays, Wednesdays and Saturdays. Fridays and Sundays are most expensive.

 
Once you know how much money you need, start saving as soon as possible so you will be able to pay for the trip in full. Avoid using credit cards and going into debt unless you know you can repay the balance soon after your return.
 
It helps to open a separate travel savings account so you are less likely to dip into that money for day-to-day expenses.
 
If you have a rewards credit card from a financial institution like AltaOne Federal Credit Union, redeem rewards for free travel. If you have a card with a low point balance, start using it well in advance of your trip for everyday purchases to accumulate points, then pay it off immediately.

 

Travel can be expensive, but if you plan wisely and save, you’ll be on your way to a relaxing getaway.

 

Emily Starbuck Crone, NerdWallet

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Storming the Capitol

April 7, 2015

Storming the Capitol

You can make a difference and help to protect credit union members from unnecessary regulation

National credit union organizations are extremely busy these days, waging battle on your behalf.

Maybe the biggest fight is the battle against overzealous regulatory burdens that squeeze credit unions' ability to offer the best possible products and services to over 100 million consumers and small businesses.

Check out some of the hotly contested issues the National Association of Federal Credit Unions (NAFCU) is taking up before Congress. Feel free to click on the links for more information on any of the topics.

Protect the Credit Union Tax Exemption

Comprehensive tax reform remains on the Congressional agenda. Various proposals could impact the credit union federal tax exemption or Unrelated Business Income Tax (UBIT). Both the Senate Finance Committee and House Ways and Means Committee are holding hearings on business taxes and tax expenditures. The data in NAFCU's study shows how vital the tax exemption is to credit unions, to their members and to the economy.

Learn more about the credit union tax exemption issue.

Data Security

NAFCU and other credit union trade organizations have bent lawmakers’ ears on data security in the wake of the Target data security breach. They continue to insist that retailers do their part to prevent breaches, and own up to their liability when a breach originates from the merchants. When they are at fault, retailers must cover fraud costs and the expense to reissue credit and debit cards.

Learn more about data security.

Regulatory Relief

NAFCU reintroduced the Five-Point Plan for Regulatory Relief to encourage Congress to focus on enacting real relief for overburdened credit unions. The cumulative regulatory burden our industry faces from various factions is staggering. Now more than ever, credit unions need lawmakers to step in and address duplicative and over burdensome regulations. Your credit union's individual story paints an invaluable picture for lawmakers about how these rules impact the ability of credit unions to serve over 100 million Americans who rely on you.

Learn more about Regulatory Relief for credit unions.

Risk-Based Capital Reform                                  

According to NAFCU, the National Credit Union Administration’s (NCUA) second proposed risk-based capital rule (RBC2) is too costly and unnecessary, given that credit unions are well capitalized and weathered the worst financial crisis of our time much more effectively than many bank counterparts. NAFCU is lobbying Congress that this proposal will only impose more regulatory burden on an already extremely well-capitalized industry.

Learn more about capital reform and risk-based capital.

Housing Finance Reform

Debate continues in Congress about the future of housing finance reform. The secondary mortgage market is critical for credit unions in managing interest rate risk and facilitating the flow of mortgage credit to their members. Credit unions are an important part of the mortgage market and should not, under any circumstances, be shut out by larger players. Given the complex nature of the housing finance market, lawmakers need your immense expertise and insight as a lender.

Learn more about housing finance reform.

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Plan and Finance Your Home Improvement Projects

Paying for home improvements, whether major renovations or unexpected repairs, is one of the biggest challenges homeowners face. In some cases you may plan a renovation for years, but it is not always possible to predict when you will need a new furnace or roof. That is why it is important to have a flexible plan for any eventuality when you take on the responsibility of owning a home.

Here are some strategies that have helped many homeowners keep a snug and leak-free roof over your head.

Make a budget

As a rule of thumb, expect to spend 1% to 4% of your home’s value on maintenance every year. So on a $200,000 home, budget from $2,000 to $8,000 annually. In years when repair bills are lower, you should still be setting aside the same amount, saving up for the day when you need to fix something major. For larger renovations like a kitchen or bathroom remodel, plan ahead. Knowing that a large expense is coming two or three years down the road gives you a chance to divide the price tag into manageable monthly savings goals.

Look for flexible financing

It is not always possible to pay for a major home project with savings alone. If you need to borrow money, financial institutions like Alta One Federal Credit Union offer a variety of home loan options, each suitable for different types of projects.

Home equity loan

These fixed-rate loans allow homeowners to borrow against their equity. Usually, lenders prefer that you retain at least 20% equity in your home. That means your primary mortgage plus your home equity loan should add up to no more than 80% of your home’s value. The lender may require an appraisal.

Home equity line of credit (HELOC)

These loans are best for big projects where you are unsure of the total price tag. You can usually access them with a check or a debit card tied to the account, and you pay interest only on the amount borrowed. Interest rates fluctuate based on market conditions. Home equity loans and HELOCs generally carry low interest rates, like mortgages, and you can deduct the interest paid if you itemize on your taxes.

Personal loan

Unlike home equity loans and HELOCs, personal loans are not secured by your home, so the rates are usually higher, and the interest is generally nondeductible. This may be a good option if you do not have enough equity to tap for your renovation.

Credit cards

Borrowers should avoid using credit cards to pay for big renovations, if possible. That is because interest rates tend to be high, and running up your credit card balance can have a negative effect on your credit score. If you are forced to put a large emergency repair on a credit card, you may be able to get one of the other types of loans listed above to pay down the balance, or transfer the balance onto another card with a lower interest rate to pay it off faster.

Other financing options

If you need funds to pay for necessary upkeep or even improvement projects, you may be able to get a loan backed by the government. The Department of Housing and Urban Development backs Title I loans of up to $25,000 for single-family homes, and some cities and states also offer loans at competitive rates to help owners keep properties in good repair. If your renovations will improve your home’s energy efficiency, check with local utility companies about relevant loans and grants.

Paying for renovations and major repairs is less burdensome if you make a careful plan ahead of time. With a combination of savings and smart financing, you’ll have a better chance of taking good care of your home without skimping on your other financial goals.

Virginia C. McGuire, NerdWallet

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Hidden Tax Breaks

In recent years, the average tax refund has been about $3,000. If you effectively determine and utilize the available tax credits, you may land a sizeable check this spring. Here are several commonly overlooked deductions worth a look.

Home office deduction 
Home offices have many perks: no commutes, casual dress code, etc. Add a tax break to the list of benefits. If you spend the majority of your time conducting business from home, you might be able to deduct some costs using IRS Form 8829. 

Renewable energy tax credit
Have you installed a renewable energy device, such as a solar water-heating system? If so, you might be able to deduct up to 30% of the cost. Form 5695 helps you determine the credit amount, if you qualify. 

Child adoption costs
Expenses related to adopting a child may be written off for 2014. That includes court costs, lawyer fees and traveling expenses such as lodging and meals. The maximum deduction is $13,190 for those who qualify. Refer to Form 8839 for more information.

Job-hunting costs
Travel expenses, fees paid to employment agencies and the cost of printing and mailing your resume can be claimed as miscellaneous itemized deductions on your tax return. Just be aware that you will only qualify for these tax breaks if you were looking for employment within your previous line of work. 

Relocation expenses
Some job relocation costs may be written off from your tax bill with the help of Form 3903. However, the IRS stipulates that your new workplace must be “at least 50 miles farther from your old home than your old job location was from your old home” to qualify. 

Child and dependent care credit
Costs to care for parents is listed as dependents and child day care expenses might qualify for the child and dependent care tax credit. Refer to Form 2441, which stipulates you and your spouse have to file a joint return and both must either have been employed or “actively looking for work” to qualify.

Earned-income credit 
Taxable earnings under a certain dollar amount in 2014 might qualify for the earned income credit. The limit is determined by the number of children, along with your tax filing status. If you are not married, have three or more children and earned less than $46,997, you may qualify. If you are married and have three or more children, the limit jumps to $52,427. For singles with no kids, the limit is $14,590.

Keep in mind that a direct deposit refund helps speed up its delivery. All you need is a checking or savings account at a financial institution such as AltaOne Federal Credit Union.  

We encourage you to take advantage of all available credits and deductions. A large tax refund can go a long way toward helping you to pay down debt and to set up emergency and savings funds. 

Tony Armstrong, NerdWallet

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Credit Unions: Membership Has its Privileges

Credit Unions are no longer the best kept secret of the financial world. According to the Credit Union National Association (CUNA), as of mid-2014:

• Credit union memberships total 100.1 million and assets exceed $1,125 billion.

• Credit union savings stand at $961 billion, while loans total $689 billion.

• There are 6,671 credit unions. Some 4,027 are federally chartered, and 2,644 are chartered under laws of various states and Puerto Rico.

• Credit union memberships are now growing at more than two times the rate of U.S. population growth.

In California, there are 377 chartered credit unions, with a combined total of nearly 10 million members. Basically, one-fourth of the state population belongs to a credit union. Nationally, the credit union movement has continued on a meteoric rise for several decades. In 1970, 23 million Americans belonged to a CU. By 2000, that number soared to 80 million. Today, there are over 100 million credit union members in the U.S. 

In 2014, credit union members throughout the U.S. reaped some $7.3 billion in financial benefits. That’s an average of $140 per member household according to Credit Union National Association’s economics and statistics department. 

Why are credit unions consistently biting into the banks’ market share? 

Credit unions save members money by charging lower interest rates on loans and paying higher interest or dividends on deposit accounts and investments. They also charge fewer and lower fees. So the more you use our credit union, the more you save … and the more you earn. 

Consider this: Financing a $20,000 new car for 48 months at AltaOne Federal Credit Union at our special promo rate would likely save you up to $300 per year or more over a major national banks. That is a savings of $1,200-plus over the span of the four-year loan.

Across the board, you will see the same kind of rate advantages on loans and deposits with AltaOne and other credit unions. Even though the vast majority of credit unions cannot match the marketing power of national banks, consumers have been attracted to CUs like bears to honey, mostly due to the sizeable membership benefits. In addition to the rate advantages, credit unions traditionally charge low or no service fees compared with banks. And now that credit unions such as AltaOne have greatly enhanced their services such as online banking and mobile apps, it is really a no-brainer when it comes to choice.

The bottom line – AltaOne exists for its members. We do not answer to stockholders. We are a not-for-profit organization and our vision is to be the community’s choice for their financial services throughout all stages of life.

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Smart Savings for All Life Stages

There is no doubt that in today’s low interest environment it is challenging to put your money to work for you. In addition to finding the right financial institution that is going to offer the best possible return on your deposits, it is also important to determine the best savings vehicle for your current life stage.

Your savings needs typically vary a great deal as your life and circumstances change. No matter where you are in life -- whether you are a child, teen, young adult or retiree – it is vital that you learn which savings options are best.

Youngsters: Type of account: Basic savings account with a parent

It is never too early to begin teaching your little ones about the value of saving. (OK – maybe you can wait until they can talk.) Many financial institutions such as AltaOne offer savings accounts for children, as well as programs to help them to understand the basics of money management. AltaOne’s CUB Club program rewards little tykes for saving with fun gifts such as “Super Saver Capes.” It is amazing to see how quickly a child learns the value of fiscal responsibility when it is taught to them at an early age.

Teens: Savings accounts, youth certificates, college funds

As your children hit their teen years, they should already be fairly astute savers. The savings products offered by financial institutions become a bit more sophisticated for this age group. Some organizations provide interactive programs and games to help teens enhance their financial IQ. AltaOne’s Successful Savings for Teens program includes savings accounts, and even teen certificates, Visa cards and loans for those who qualify.

Young adults: online banking, mobility, online account opening

Millennials (18-34 year old consumers) have grown up on technology. Many have yet to realize the value of face-to-face interaction with professional credit union representatives. Therefore, most quality financial organizations provide online banking services that include mobile apps, BillPayer and online account opening.

Thirty- and forty-somethings: Money market savings account, certificates

As consumers enter their thirties, they are raising families, purchasing homes and realizing a greater need to save for their future. This is when products such as money market funds and certificates should peak your interest. This is also a good time to begin scheduling regular financial “check-ups” to better understand the best long-term options for your needs.

Fifty-plus and retirees: High-yield savings account

Hopefully, as you enter your fifties and beyond, you have been able to manage your money wisely and are in a position to set yourself up for a relaxing retirement. This is the time when solid wealth management advisors can help. They may recommend a variety of products to fit your needs, such as securities, variable and fixed annuities and retirement plans.

As you can see, there are numerous savings products available. These suggestions are certainly not etched in stone. Conduct some research, chat with the pros at your financial institution and determine for yourself what is best for you and your family throughout your life.

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