Month: November 2019

Should I Buy A House During The Holidays?

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Q: I’m in the market for a new home and wondering if I should push off my search until door with holiday wreathafter the holidays. Is it a good idea to buy a new home during Christmas?

A: While spring and summer tend to see the highest volume of home sales, it doesn’t mean they’re the only time to buy a house.

Let’s take a closer look at some of the myths and lesser-known facts about timing the purchase of a home and explore the pros and cons of buying during the holidays.

The myth about buying in the spring

Contrary to popular belief, springtime can be the worst season to purchase a home. While the longer daylight hours do make it easier to check out the exterior, shopping for a new house during the hottest real estate season can mean facing all kinds of drawbacks and difficulties.

First, and most importantly, sellers tend to mark up their prices when they see heightened demand for their homes. Also, the flooded market can lead to expensive bidding wars with buyers who are also interested in the same property. Plus, if your search is successful and you find a new home during the spring, the closing process can drag out much longer than necessary as title companies, inspectors and movers may not be able to service you in a timely manner during their busiest season of the year.

Why Christmas can be a better time to buy

Shopping for a home during the winter, and especially during the holidays, offers the following advantages:

Homes are priced to sell

Most of the houses you’ll find on the market during the late fall and early winter will be holdovers from the spring and summer season. At this point, homeowners may be desperate to sell and get their property off their hands. Alternatively, the houses may have just been put on the market because of the owner’s sudden and urgent need to relocate due to unforeseen factors like a job change, divorce or another life-altering event. In either case, the owner is looking to sell quickly, and will likely be more willing to compromise on their original asking price than homeowners selling in the spring and summer. In fact, according to The Wall Street Journal, home prices can drop to a 12-month low in December.

Holiday spirit makes people more agreeable

People tend to be in a more generous frame of mind around the holidays. Let this factor work in your favor by shopping for a home during the holiday season. You can walk away with a dream home at a dream price, and you may even be able to negotiate some extras, like furniture or a fresh coat of paint, into the selling price.

Fewer buyers on the market

With more people looking to relocate during the spring and summer months, you’ll have less competition when house-hunting around Christmas time. This will give you an edge in bidding wars and it will make it easier for you to negotiate to bring down an asking price on a home.

Professionals of the field are more available

December is usually the slowest month of the year for home sales. This can work to your advantage if you choose to buy a home around the holidays. Your real estate agent will likely have plenty of time to show you around since fewer other people are looking to buy during this season. The various professionals you’ll need to hire during the home-buying process-including an attorney, home inspector, underwriter and mover-will likely be able to service you promptly as well.

Before you go house hunting

While buying a house during the holidays can be a great idea, keep these factors in mind before you give your agent a call:

  • Daylight hours are short during the winter, giving you a small window of opportunity to search.
  • You won’t be able to see a home’s property in its full glory during the winter months.
  • Some sellers may not be too keen on throwing their homes open to viewers during the holidays.
  • Unexpected inclement weather may delay some parts of the home-buying process, like the inspection or even the closing.
  • You’ll have fewer homes to choose from when house-hunting during the winter, as a cooler real estate market means slimmer pickings.

Shopping for a new home during the holidays may not be conventional, but it can mean finding your home sweet home quickly, easily and for a far better price.

If you’re in the market for a new home, make sure to stop by [credit_union] to ask about our home loan options. We’ll help you move into your dream home with the most favorable terms.

Your Turn: Have you bought a home during the holidays? Tell us about it in the comments.

SOURCES:
https://fitsmallbusiness.com/best-and-worst-time-to-buy-a-house/
https://www.thebalance.com/when-is-the-best-time-to-buy-a-home-1798329
http://www.freddiemac.com/blog/homeownership/20170129_pros_cons_buying_home_in_winter.page
https://loans.usnews.com/articles/reasons-to-buy-a-house-during-the-holidays
https://blog.nationwide.com/best-time-to-buy-a-house/
https://www.thebalance.com/selling-your-home-during-the-holidays-1799068
https://realestate.usnews.com/real-estate/articles/should-you-consider-buying-a-home-during-the-winter

All You Need To Know About Home Loans

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Here at Destinations Credit Union, we provide a variety of products and services to meetimage of a mortgage application your specific financial needs and in the most ideal ways possible. One such example is our home loans. Let’s take a closer look at this product and how its application process works.

What is a home loan?

A home loan, or a mortgage, enables you to purchase a home without having to foot all the cash out of your pocket when purchasing. You will, however, need to make a down payment, which is typically between 3.5-20% of the home’s appraised value, along with closing costs and some other fees. The lender then finances the rest of the purchase. You’ll repay the loan, along with interest, over the course of (generally) 15 to 30 years.

Are all home loans alike?

Before you get started, you’ll need to choose a mortgage type. A conventional loan will necessitate a 5-20% down payment on the home.

There’s also an FHA loan, which only requires a down payment of 3.5%, but necessitates mortgage insurance. If you’re a military veteran, consider obtaining a VA loan, which lets you buy a home with zero down payment.

Once you’ve chosen the kind of loan which is best for your scenario, you may be given a choice of repayment arrangements for that loan.

Here are the three common types of mortgages:

  1. 30-year fixed-rate mortgage. The interest rate on this 30-year mortgage will remain fixed no matter the changes to the national rate.
  2. 15-year fixed-rate mortgage. This mortgage will also have a fixed interest rate, but the term lasts just 15 years. The monthly payments will be higher, but the overall interest paid over the course of the loan will be significantly lower.
  3. Adjustable-rate mortgage (ARM).  An ARM gives the borrower a lower interest rate in the early years of the loan, and then a gradual increase (adjustment) in rate over the rest of the life of the mortgage if rates are going up.

What do I need to know before applying for a home loan?   

A home is likely to be the largest purchase you will ever make. To qualify for one, you will need to prove that you are living a financially responsible life and that you can afford the monthly payments.

The primary way lenders gauge your financial responsibility is through your credit score. This number is like a grade that tells lenders how you’ve handled your past credit card accounts and other debts. It will include the length of time you’ve had your credit cards and loans open, the timeliness with which you’ve made your payments, the trajectory of your debt and the amount of available credit you might use. Most lenders will only grant a home loan to borrowers with a credit score of 650 or higher. You can check your score for free on Credit Karma. You might also consider ordering a free credit report from all three major credit bureaus once a year at AnnualCreditReport.com.

During the time leading to your mortgage applications, make sure to pay all your bills on time, don’t open new credit cards and work on paying down overall debt. A higher credit score will help you get approved quicker and it will net you a lower interest rate on your loan.

Another crucial factor in determining your eligibility for a mortgage is your debt-to-income ratio, or your DTI. Lenders want to know how big your collective outstanding debt will be in relation to your income if you receive the home loan. Most lenders will only allow a maximum DTI of 36%.

When should I apply for a home loan?

While you won’t need the loan until you are ready to close on a house, it’s a good idea to start the process before you begin house-hunting. Your lender will let you know whether you can expect to be approved for a loan and will provide you with an estimate of how much house you can afford so you don’t face disappointment later.

When initially applying for a home loan, ask your lender for a letter of pre-approval. This letter confirms you are pre-approved for a home loan up to a specific amount. Having this letter in hand shows real estate agents and sellers that you are serious about buying. Most pre-approvals are only good for 60-90 days, so make sure you’re ready to start house hunting before you get yours.

How do I apply for a home loan?

To apply for a home loan at Destinations Credit Union, visit our First Mortgage Center online – you can get information, speak to a Loan Officer or apply online. Make sure all of your financial paperwork is in order and hold onto all important financial documents in the months leading up to your application.

To make it easier, we’ve created a list of the information and documents you’ll need:

  • Name of current employer, phone and street address
  • Length of time at current employer
  • Official position/title
  • Salary including overtime, bonuses or commissions
  • Two years’ worth of W-2s
  • Profit & loss statement if self-employed
  • Pensions and Social Security check stubs
  • Proof of child support payments
  • Copies of alimony checks
  • Statements for all checking and savings accounts
  • Investments (stocks, bonds, retirement accounts)
  • Proof of any gifted funds from relatives
  • Car loan information

You will also need to explain any blemishes on your financial record; including bankruptcies, collections, foreclosures and delinquencies.

If you’re ready to apply for a home loan, visit our First Mortgage Center online.  We’re completely committed to your financial success.

Your Turn: How did you prepare for a home loan application? Share your tips with us in the comments.

SOURCES:
https://www.thebalance.com/before-you-get-a-mortgage-315700
https://www.rubyhome.com/blog/mortgage-loan-process/
https://thelendersnetwork.com/what-is-mortgage/

Don’t Get Scammed By Santa!

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Someone’s been naughty this year-and we’re not talking about you! Those awful santa looking in mailboxscammers don’t take time out for the holidays, and if you don’t know what to expect you can be their next victim.

One of the oldest holiday scams, which is even more prevalent in the age of the internet, is the letter-from-Santa scam.

Here’s all you need to know about this Christmas-themed scheme.

How it plays out

In this ruse, scammers set up bogus websites where parents can order legitimate-looking letters from Santa for their children. The cost is less than $30. All they need to do is share some details about their child along with their credit card information, and the letter is supposedly as good as mailed.

Except that it’s not. Unfortunately, anyone who follows the instructions detailed on the site has just fallen prey to a scam. They’ll never see that promised letter, or the money they paid for the privilege of receiving a note from Santa. Worse, the ring of scammers now has the children’s information and their parent’s credit card details.

This set of circumstances can have all sorts of unhappy endings, from identity theft to emptied accounts. Sometimes, the scammers will go after the child’s credit, which will likely go unchecked for years. When the children are grown and try to open a credit card or take out a loan, they may find that their credit score has been destroyed by these scammers over the years, all without their knowledge.

Some sites will even offer to send the letter at no cost. All you need to do is share some details about your child, like their full legal name, date of birth and home address. Of course, this is also the work of scammers looking to steal your child’s identity.

How can I tell it’s a scam?

There are legitimate websites where you can order a letter from Santa for your child at no risk of identity theft or a ruined credit history. But how can you weed out the phony sites from the authentic services?

We’ve made it simple. Look for the following red flags, which should alert you to the fact that a site is created by scammers:

  • The fruadster reaches out to you repeatedly. Promotional emails and ads are one thing; targeted marketing that is so aggressive it borders on harassment is another thing entirely. If a company doesn’t stop sending you emails or alerts about its services, you may be dealing with a scam.
  • The site is not secure. As always, check for the lock icon and the ‘s’ after the ‘http’ in the URL; both indicate a site’s security. Also, look for security badges on the bottom of the webpage and click on them to see if they’re actual links to the security company they allegedly represent. Scammers often post static images of well-known security badges, which do fool people into thinking the site is safe.
  • You need to answer too many questions. Yes, a service sending your child a letter from Santa will need to know your child’s name and mailing address. They may even ask your child’s age so they can send an age-appropriate letter. But there’s no need for them to be privy to your child’s exact date of birth, and certainly not their Social Security number. If the questions in an online form are making you uncomfortable, opt out.
  • You can’t reach a representative by phone. Most websites will have the company’s toll-free contact number on the site’s homepage. If you suspect fraud, try the number. If the company is bogus, the number will likely be a fake.
  • You can’t find any positive reviews about the company online. An online search on a legitimate service should bring up basic information and some positive reviews about the service. If a search turns up empty, and of course, if it turns up any reports of past scams, the “company” is run by crooks.

If you’ve recognized a company as a scam, be sure not to click on any links that are embedded in their emails. Flag their emails as spam, and delete every email, message and alert it sends you.

You can still send your child a letter from Santa. Try a legitimate site like Portable North Pole or or better yet, create and send one yourself!

Your Turn: Have you been targeted by a letter-from-Santa scam? Share your experience with us in the comments.

SOURCES:
https://www.consumeraffairs.com/news/watch-out-for-the-letter-from-santa-scam-121214.html
https://news.yahoo.com/beware-the-santa-claus-letter-scam-155343661.html;_ylt=AwrEePCUWYJdWQkA6BsPxQt.;_ylu=X3oDMTByZnU4cmNpBGNvbG8DYmYxBHBvcwM5BHZ0aWQDBHNlYwNzcg–
https://www.aarp.org/money/scams-fraud/info-2018/protection-from-holiday-scammers.html

Take Caution Before You Borrow Someone’s Charging Cable

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You know the feeling. It’s like a bona fide coffee addict running low on caffeine, or like a young man charging phonehiker almost out of drinking water. You’re travelling and your phone is running low on juice. Frantic, you’re searching for a place to plug in and recharge. The last thing you want is to be completely stranded in a strange place with no way to order an Uber or pay for your dinner. In one last desperate move, you search through your bag for the charging cable you always keep there – and then you remember you lent it to your friend and never got it back.

What to do?

And then, like an angel, a stranger appears out of nowhere with a friendly smile on their face. They’re holding a wonderful, beautiful charging cable in their hands.

“Do you want to use this?” they ask.

What do you do?

A.  Smile your thanks, grab the cable and plug in your phone.
B.  Say “No, thank you,” before walking away, dead smartphone and all.

If you chose B, you made the right decision. Cybersecurity experts are warning against using a stranger’s charging cable or even borrowing one from an airport official or front-desk concierge at a hotel.

“There are certain things in life that you just don’t borrow,” says Charles Henderson, global managing partner and head of X-Force Red at IBM Security. “If you were on a trip and realized you forgot to pack underwear, you wouldn’t ask all your co-travelers if you could borrow their underwear. You’d go to a store and buy new underwear.”

Henderson heads a team of hackers that clients privately hire to break into their computers to identify vulnerabilities before blackhat hackers do. Henderson’s team will often send clients a compromised iPhone cable in the mail to see if the client will plug it in or if they’ve learned to be more cautious by discarding the charger instead.

Henderson warns that cyberhackers can easily implant charging cables with malware that can be used to hijack mobile devices and computers. This can spell complete disaster for the desperate traveler who graciously accepted the spare cable from their fellow passenger and plugged in their device.

At the annual DEF CON Hacking Conference in Las Vegas, a hacker known as MG showed the attendees how he had modified an iPhone lightning cable to serve as a hacking device. MG used the cable to connect an iPod to a Mac computer and then remotely accessed the cable’s IP address to take control of the Mac. These compromised cables are available on the Darknet for just $200 each.

Don’t be fooled into thinking that charging cables left over by previous guests in the front desk of the hotel are any better than a cable offered by a stranger.

“If the front desk had a drawer full of underwear,” says Henderson, “would you wear those?”

Unlike most scams aiming for as wide a target base as possible, using a charging cable to hack a victim’s device can only be pulled off on one victim at a time. Lucky for us, this means the charging cable hack isn’t as popular or widespread – yet. Henderson warns that the relatively inexpensive technology required for the hack and the fact that it is so easy to make the cable look completely innocent could mean an upsurge in these scams in the near future.

For now, it’s best to be aware of this threat and to practice caution when travelling.

Henderson adds that using public USB charging stations is currently a larger threat than compromised cables. These stations can easily be compromised and open your device to all sorts of malware and vulnerabilities. It’s best to use your own charger at all times.

“In a computing context, sharing cables is like sharing your password,” says Henderson, “because that’s the level of access you’re crucially conveying with these types of technology.”

To avoid falling victim to this hack, always pack an extra charging cable in your handbag. If you forgot to take one along or you can’t seem to find it, purchase a new one to use while you’re away. You can find charging cables in almost any convenience store for under $10 – a small investment for your safety.

The next time you’re running low on juice and a stranger offers you the use of their charging cable, make the safe choice!

Your Turn: Have you ever been targeted by using a borrowed charging cable? Tell us about it in the comments.

SOURCES:
https://www.forbes.com/sites/suzannerowankelleher/2019/08/15/why-you-should-never-borrow-someone-elses-charging-cable/amp/
https://www.headtopics.com/us/why-you-should-never-borrow-someone-else-s-charging-cable-7654695
https://frnews.ng/why-you-should-never-borrow-someone-elses-charging-cable/

What Is The Prime Rate And Why Does It Matter?

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Q: What exactly is the “prime rate?” How does it affect me as an individual?Symbols of percent on falling red cubes

A: The prime rate is the current interest rate that financial institutions in the U.S. charge their best customers. These customers have excellent credit, and are eligible for this optimal rate because their loans carry the lowest risk for their financial institutions.

The prime rate is also referred to as the prime interest rate, prime lending rate or simply prime. You may hear this term thrown around a lot in the financial news or when reading up on loans and mortgages. That’s because the prime rate affects every level of the economy.

We have answers to all your questions on the prime rate.

How is the prime rate determined?

The prime rate is based on another rate, which is set by the Federal Reserve Board. It’s an interconnected system starting with the government and ultimately impacting each of us on some level.

The prime rate is determined in three steps:

  1. The Federal Reserve System, which is the central bank of the United States, sets the federal funds target rate, or the interest rate, it thinks is best for financial institutions to use when lending each other money.
  2. When financial institutions lend each other money to maintain their reserve requirements, they base the interest rates they charge each other on the federal funds target rate.
  3. The Wall Street Journal surveys the largest financial institutions in the country to determine the rate they are using and then publishes this rate as the prime rate. This number is generally 3 percent higher than the federal funds target rate.

The fed’s target rate, and consequently the prime rate, changes often. In fact, the Federal Open Market Committee, which sets the federal funds target rate, meets a minimum of eight times a year to discuss possibly changing the target rate.

The prime rate reached its peak of 8.25% in the second half of 2006 and then steadily decreased to a low of 3.25% at the start of 2009. It has increased over the past few years. You can check out the changes in the prime rate at Federalreserve.gov.

How does the prime rate affect the average individual?

There are two ways the prime rate affects you.

First, the interest rate on nearly every loan, including mortgages and credit cards, is affected by the prime rate. Financial institutions and large lenders will base their interest rates on the prime rate, generally establishing their current rates at an amount that is higher than prime to cover their larger risk of default. If the prime rate rises, the interest rates on your loans and adjustable-rate credit cards will rise as well.

Second, the prime rate affects liquidity in the financial markets. When the rate is low, liquidity increases. This means funds are more readily available because loans are less expensive and easier to qualify for. This, in turn, generates a growing economy as businesses expand.

Conversely, when the prime rate is high, liquidity is low and loans are hard to come by, thus slowing the economy down.

Is the prime rate the only factor used to determine individual interest rates?

While the prime rate is the starting point that financial institutions and large lenders use in determining an interest rate for a loan, it is by no means the only factor they’ll consider.

Your credit score plays a vital role in the interest rate you’ll be granted for a large loan. The higher your score, the lower interest rate you’ll earn. Keep your score high by using your cards responsibly and paying your credit card bills on time.

Here at Destinations Credit Union, we also consider your credit history and the general state of your finances when determining your interest rate on a loan. If we see that you’re moving on an upward trajectory and working toward paying down your debts, we’ll be more likely to grant you a favorable interest rate on any loan we offer.

Also, keep in mind that as an institution devoted to your success, we are always striving to help you achieve and maintain financial wellness. To that end, we offer our members a starting interest rate on all loan products that is currently lower than the interest rate offered by most banks in the U.S. While your specific interest rate may vary due to personal circumstances, you’ll know you’re always getting the best possible terms here at Destinations Credit Union.

The prime rate is an important element in the overall state of the U.S. economy and in your personal finances as well. While you have no control over the rate’s rise and fall, you can do your part in keeping your interest rates low by maintaining a high credit score, living with financial responsibility and taking advantage of the excellent rates on products offered at Destinations Credit Union.

Your Turn: How do you keep your credit score high and your interest rates low? Share your best tips with us in the comments.

SOURCES:
https://www.investopedia.com/terms/p/primerate.asp
https://www.thebalance.com/prime-interest-rate-3305956
https://www.creditkarma.com/credit-cards/i/prime-rate/
https://www.federalreserve.gov/