Should I Go Solar?

Q: My summertime electric bills are sky-high. For this reason, I’m really thinking aboutsolar panel installation on roof having solar panels installed on my roof. I figure it’s gotta help me save on energy costs, but I hear they can be super-expensive. Should I go solar?

A: Solar panels are popping up on roofs all across the country. This year, with a 30-percent federal tax credit on solar panels extended until the end of 2019, solar panel installation is especially popular. It’s also incredibly effective: A solar panel system can lower a three-digit energy bill to less than $10.

But, are they worth the price? Let’s take a closer look at the cost-effectiveness of solar panels and highlight some important questions that will help you determine whether a solar energy system is the right choice for your home.

The dollars and cents of going solar

Most residential homes will need a five-kilowatt solar panel system for meeting their energy needs. According to the Center for Sustainable Energy, this will cost homeowners between $15,000 to $25,000, or $10,500 to $17,500 after the federal tax credit.

That’s a whole lot of money! Let’s take a look at four ways you can pay for your solar panel system:

  1. Cash. If you can afford it, paying for your panels upfront will bring you the biggest return on your investment since, after the initial startup fees, your panels likely won’t cost you a penny. Depending on your system and your general energy consumption, your solar panels can reduce your electric bill by 70 to 100 percent. This means most systems will pay for themselves in five to seven years.
  2. Lease agreement. Solar leasing is available in about half of the country. Like a car lease agreement, you’ll pay a monthly rent instead of an upfront fee for your panels. The leasing company will then install your panels and collect the federal tax credit, as well as any government incentives available in your state, on your behalf.

    Leasing solar panels is generally not recommended for several reasons. For one, after the lease agreement is over, the company will either remove the panels or charge you full price for the privilege if you want to keep them. You also may end up saving less on your energy costs than you assumed since many leases contain an escalator clause, which increases lease payments by 3 percent a year. Finally, a leased solar panel system can scare off potential homebuyers should you decide to sell your house before the lease is up.

  3. Solar loan. If you’d rather not lease your panels but you don’t have the cash available to pay for them upfront, you can take out a loan created just for the purpose of funding this purchase. A secured solar loan will use your home as collateral and offer tax-deductible interest, while an unsecured solar loan will likely have higher interest rates. Prepare to pay high origination fees with any kind of solar loan as well.
  4. Home Equity Loan or Home Equity Line of Credit (HELOC). Excluding cash, the most financially responsible way to finance your solar panel purchase is through a loan or a line of credit taken out against your home’s value. Speak to a Loan Officer at Destinations Credit Union to learn about the low startup costs and interest rates on our home equity lines of credit. Interest is often tax-deductible (talk with your tax professional), and the funds you need can be available to you in very little time.

Are solar panels for you?

Ask yourself these questions before you make a decision:

  1. Which way does my roof slant? In the United States, south-facing roofs are the best recipients for solar energy. Next up is west-facing, and then east-facing roofs. North-facing roofs are the least desirable for solar.
  2. How much sunlight does my roof get each day? Are there obstructions, like neighboring homes, trees or hills that block the sun from reaching your roof? It’s best for sunlight to hit your panels for a minimum of five hours a day.
  3. How large is my roof? An average residential solar system will need 20 panels to receive sufficient sunlight, which comes to roughly 500 square feet of roof space.
  4. What type of roofing do I have? The cheapest and easiest solar panel installations work on roofs made of asphalt shingles or corrugated metal.
  5. How old is my roof? It only makes sense to install your panels on a roof that has many more years of life left. Otherwise, you’ll need to pay to have the panels removed and then reinstalled when you replace your roof. Similarly, it’s not worth installing panels if you plan on moving out of your home within the next decade or so.
  6. How expensive is my electricity? The higher your local electricity rates, the more cost-effective your solar panels will be. You can determine the rate you pay per kilowatt hour by looking at your most recent energy bill.
  7. Are there any government incentives in my state? Aside from the  federal tax credit mentioned above, many states offer their own incentives for going solar. You can check for any available state credits on the  database of state incentives for renewables and efficiency.

The bottom line

Should you go solar? At the end of the day, it’s your call. If you can afford to pay for the panels or take out a HELOC to help fund the purchase, and all other factors are in your favor, you may want to consider getting solar panels. Especially consider it while the federal tax credit is still active.

However, if you don’t think you can afford another monthly payment and you don’t believe solar panels would be in your best interest, you can find other ways to cut back on your energy costs without going solar.

Your Turn: Is your home solar-powered? Tell us what drove this decision and how your solar panels are working out for you in the comments.

SOURCES:
https://www.washingtonpost.com/lifestyle/home/considering-getting-solar-panels-here-are-the-right-questions-to-ask/2018/03/09/3190c71a-20c0-11e8-94da-ebf9d112159c_story.html%3FoutputType%3Damp

https://www.nerdwallet.com/blog/finance/save-money-putting-solar-panels-roof/
https://www.tdworld.com/commentaries/5-reasons-why-i-don-t-have-solar-panels-my-roofyet
https://www.consumerreports.org/energy-saving/real-cost-of-leasing-vs-buying-solar-panels

Beware Natural Disaster Scams

When disaster strikes, so do the scams. It’s the season of hurricanes, earthquakes, man and woman sitting on sofa in flooded hometornadoes and more. If you live in an area that’s prone to storms and flooding, or you volunteer to help the victims of natural disasters, beware of these four post-disaster scams so you’re not taken for a ride.

Bogus charities

As soon as a major natural disaster hits, fake charities spring up like dandelions after a spring rain. You might get solicitations for donations via email, social media posts, text messages or phone calls. These appeals are usually accompanied by a tear-jerking story designed to play on your emotions and get you to loosen your purse strings. Unfortunately, these scams are often successful at swindling victims out of thousands of dollars.

Never take a request for monetary aid at face value. Check out the charity’s authenticity at Charitynavigator.org and see what the Better Business Bureau has to say about them. If you find the charity does indeed exist and is a reliable organization, double-check that the website address (URL) is correct so you can be sure you’re not handing over money to a copycat site. If you want to be absolutely certain that your donation is going to the right address, you can simply contact the charity or The Red Cross on your own.

FEMA imposters

The days following a natural disaster can be chaotic, as victims try to put their lives and their homes back together.

Devious scammers capitalize on this misfortune to impersonate FEMA representatives to collect victims’ personal information and/or their money. They’re counting on victims being too preoccupied to check their legitimacy.

If you applied for FEMA, stay one step ahead of the scammers by remaining alert and cautious. If you receive a phone call from someone claiming to represent the federal organization, only share your FEMA claim number over the phone, keeping all other personal details to yourself. If the caller is legitimate, they should already have any other information they need.

If a FEMA representative shows up at your home, ask to see a FEMA-issued photo ID badge. The “representative” may promise to speed up your claim if you pay a deposit, but this is completely false, as FEMA does not offer any such arrangement. Do not give the “FEMA rep” any of your money – or any of your personal information.

Shady repair contractors

Many so-called contractors will make the rounds of neighborhoods that have seen storm damage to offer their services to homeowners seeking repairs. They may ask for upfront payment for any work you need and then do a sloppy job or never complete their task. You won’t realize you’ve been conned until the worker has left your home with your money in their pocket. To avoid getting caught in this scam, carefully research any contractor you’d like to use before hiring, and never agree to pay for all or most of the repairs before the work is done.

In a different variation of this scam, someone may show up at your door claiming to represent a utility company you use. They’ll threaten to shut off your service if you don’t provide immediate payment for any repairs you might need. Ask to see proof that they indeed represent the company they claim to work for and do not make any upfront payments until you have checked out their authenticity.

Damaged cars

It’s not only homes that can be heavily damaged by storms; vehicles can get hit hard, too. Sometimes, a car that’s been in a flood or hurricane can be fixed up so it looks fine on the outside despite a heavily damaged interior. Shady car salespeople might try to sell these vehicles to unsuspecting consumers who have no idea the car has been in such a storm.

If you’re shopping for a car in an area that has recently been hit by a natural disaster, be sure to check out the car’s history on sites like Carfax.com.

Don’t let scammers make a natural disaster more difficult than it already is. If you suspect fraud, let the FTC know at FTC.gov.

Your Turn: Have you been targeted by a natural disaster scam? Tell us about it in the comments.

SOURCES:
https://www.ridester.com/doordash-vs-grubhub/amp/
https://www.fema.gov/news-release/2019/03/04/defend-against-disaster-related-scams#
https://www.aarp.org/money/scams-fraud/info-2019/disaster.html

Why You Should Finance Your Next Car Loan At Your Credit Union

When shopping for a new set of wheels, your first stop should be right here, at cars in dealer showroomDestinations Credit Union. Though many people start their process on the dealer’s lot, you’ll enjoy a lower rate, a simpler loan application and other benefits by choosing to finance your car with your credit union. And, if you prefer to shop online before making your decision, check out our Car Buying Service – you never have to leave our site to research, find all available inventory, compare your vehicles and more!  Best of all, you can avoid the pesky ads and phone calls.

This is why people are increasingly choosing to finance their cars directly through credit unions. In fact, auto loans comprise more than a third of all the active loans across the 5,600 credit unions in the U.S.

Let’s take a look at the differences in the auto loan process at a car dealership versus Destinations Credit Union.

Financing an auto purchase at a car dealership

When you visit a dealer’s lot with the intention of purchasing a car, the dealer will likely ask you how much you’re willing to spend on your vehicle of choice. You may have already worked out your numbers, or, you may just have a vague idea of how much you can realistically afford. Either way, the dealer will probably try persuading you to push your self-imposed limits to the max or even to go over your ceiling price.

But, if you’re financing your car through the dealer, that’s only the beginning. Once you’ve chosen the car you’d like to buy, you’ll need to submit a complicated auto loan application form, which the dealer will send to the finance companies it partners with. This can include lenders and financial institutions. The dealer will then share the lenders’ offers with you and ask you to make your choice.

However, in most cases, the dealer is only the middleman. This means they are going to present your options in a way that most benefits them – and not you. Thanks to this practice, even a fantastic offer from another lender will be presented as higher than it actually is, or may not be presented at all.

For example, say your dealer contacts three lenders: Lender A, Lender B and Lender C. Lender A agrees to offer you a 5% Annual Percentage Rate (APR), Lender B offers a 6% APR, and Lender C offers a 7% APR. But the lender will not automatically present you with Lender A’s offer. Instead, they will first determine which lender would afford them the greatest profit.

The rates presented by the above lenders are known as the “buy rates,” or the lowest possible rate the lenders will grant the borrower.

Lender A might offer the dealer a flat fee for each new loan the dealer nets them at the buy rate, with more profit granted for each new tier of a car price, such as $10,000. Lender B, on the other hand, allows the dealer to increase the buy rate by 3% to a new “contract rate.” The dealer then pockets the difference as his own profit. Lender C allows the dealer to offer a contract rate at 2% higher than the buy rate.

In the above scenario, it isn’t hard to picture the dealer pushing you to accept an offer from Lender B or Lender C at the new contract rate of 9%. If you complain that this rate is too high, the dealer may then suddenly “remember” that Lender B is willing to finance the loan at a 7% APR. In either case, there’s very little chance you’ll end up being presented with the offer that is truly in your best interest. And you’ll never even know you’ve been duped!

Financing an auto purchase at a credit union

Getting an auto loan with your credit union is a completely different experience. Why? Because we exist to serve your best interest.

When you walk into Destinations Credit Union with the intention of taking out an auto loan, you’ll be dealing with people who know who you are and what your financial reality is like. No one will try to push you into a loan you can’t afford.

The process of applying for a Destinations Credit Union Auto Loan is simple, quick, and easy. You can even apply for a loan online. Also, as a member of Destinations Credit Union, you already have a headstart on getting that pre-approval.

One of the biggest advantages you’ll have when financing an auto loan through your credit union, though, is a lower APR. Because you’re working directly with the lender, you’ll only hear the actual rate we offer instead of a marked-up rate the car dealer presents to you.

Also, as member-owned and operated institutions, credit unions famously offer loan rates that are consistently lower than those offered by large lenders and banks. In fact, according to Bankrate, the average APR on a credit union auto loan in the beginning of 2019 was a full point lower than the rates offered by banks.

Another key advantage you’ll enjoy from a credit union-financed auto loan is a more relaxed setting when determining how much you can afford to pay each month toward your new car. There’s no rush and no pressure when you’re sitting at Destinations Credit Union and working out your budget. In contrast, when you’re standing in the dealer’s lot surrounded by cars you wish you could afford, you’re far more likely to make a decision you’ll later come to regret.

If you’re in the market for an auto loan, make your credit union your first stop. You’ll enjoy a lower rate and the friendly, professional service you’ve come to expect at Destinations Credit Union.

Your Turn: Have you financed a car purchase through your credit union? Tell us about it in the comments.

SOURCES:
https://www.magnifymoney.com/blog/auto-loan/why-you-should-avoid-financing-a-car-through-a-dealership/

https://www.nerdwallet.com/blog/loans/auto-loans/auto-financing-before-dealership/
https://www.bankrate.com/loans/auto-loans/6-reasons-to-get-a-credit-union-car-loan/amp/

The Credit Union Difference Part II – What’s In A Membership?

As a member of Destinations Credit Union, you are uniquely positioned to manage yourteller counting money to customer finances and watch your money grow on the best possible terms. Like the member of an elite club, you are entitled to exclusive privileges and individualized service, courtesy of your credit union.

Let’s take a quick look at some of the benefits you can enjoy as a member of Destinations Credit Union.

1.) Highly personalized service

Credit unions are well known for the highly personalized and attentive service they provide to members. A 2017 American Customer Satisfaction Index Finance and Insurance Report found that members rate credit unions with better service than banks, scoring an average of 82 out of 100. It’s part of what makes credit unions unique.

When you step through the door of Destinations Credit Union, you know you’ll always be welcomed by familiar faces, warm smiles and friendly greetings. There are no aloof tellers who don’t know you or your financial situation  – just our helpful service representatives who treat you like family. No matter your age or stage, our Member Service Representatives are happy to guide you through any monetary challenge and assist you in reaching your financial goals.

At Destinations Credit Union, our outstanding member service means we’re personally invested in your financial well-being and only want to see your success. To that end, we’ll grant you a loan quicker than most big banks, graciously looking past some tarnished credit history and skipping the overly thorough background check. We also host financial education seminars for our members and the larger community throughout the year, enabling you to broaden your money knowledge and to learn how to make smarter financial choices.

2.) Increased value for your money

As a not-for-profit cooperative, your credit union has modest overhead and marketing expenses. Destinations Credit Union is proud to pass these savings on to you in the form of low or no account fees, better loan terms and higher dividend payments on your savings.

According to a report by the Credit Union National Association (CUNA) that studied credit unions in Maryland from March of 2017 through March of 2018, Destinations Credit Union provided average financial benefits that were equivalent to $95 per member and $203 per household. Another 2018 study performed by Bankrate found that 84 percent of the nation’s 50 largest credit unions offered their members checking accounts with no monthly maintenance fee. Here at Destinations Credit Union we’re proud to offer our members the same; our Checking Accounts are completely cost-free, and we pay interest on some accounts.

At Destinations Credit Union, we don’t have to answer to outside investors. This enables us to be more attuned to your needs without worrying about increasing our own worth. Our not-for-profit status frees us to offer you optimal terms on Share Certificates, Savings Accounts and more. It’s more money in your pocket just for being a member of Destinations Credit Union.

3.) A voice in how the credit union operates

As mentioned, your credit union does not need to answer to stockholders. Instead, Destinations Credit Union is member-owned, operating with only your best interests in mind.

As a full-fledged member of Destinations Credit Union, you have a voice in how your credit union runs. You are invited to cast your ballot in our [annual] elections in which we vote on a volunteer board of directors. The board is then charged with oversight of the credit union and forming all official decisions regarding the way the credit union operates. Our board is comprised of members of the credit union, just like you. This means the decisions they make will always be advantageous to our membership and to the general community instead of trying to pander to outside stockholders. We’re all about doing what’s best for our members.

4.) A chance to give back to the community

Here at Destinations Credit Union, we’re strong believers in giving back to the community. We support many community initiatives and organizations, and we are committed to making decisions that benefit the entire community. We are especially invested Operation HOPE, a cause that is dear to our hearts. Anyone in the community can get no-cost access to a financial well-being counselor.

When you choose Destinations Credit Union, you’re choosing to give back to the community, too.

As a member of Destinations Credit Union, you are entitled to enjoy all of these benefits and so much more. Whatever your particular needs are, we’re here to help you manage your finances every step of the way. Call, click, or stop by [credit union,] today to learn how to make your membership work for you in the best way possible.

Experience the credit union difference.

Your Turn: What does your credit union membership mean to you? Tell us all about it in the comments.

SOURCES:
https://www.creditkarma.com/advice/i/difference-between-credit-union-and-bank/%3Famp

https://www.thestreet.com/amp/personal-finance/credit-unions-vs-banks-14626262
https://www.nerdwallet.com/blog/banking/credit-unions-vs-banks/

The Credit Union Difference Part 1: The History Of Credit Unions

As a member of Destinations Credit Union, you know that credit unions are always blackboard with columns for banks and credit union pros and consstriving to serve their members and community in as many ways as possible. We value each member’s input as an equal owner in the credit union, and offer flexible loan terms as well as low-cost accounts. We also reward our members with higher dividends, and proudly donate our time and our resources to community initiatives and organizations.

This article is the first in a series celebrating the history, contributions and benefits of credit unions.

Both credit unions and banks provide those they serve with a broad range of financial services and products. However, there are multiple distinctions between the two institutions. The primary credit union difference lies at its core: Banks are created to generate profit for their owners; credit unions are created to provide members with a place to manage their finances at the best possible terms.

The noble goal of putting members first is deeply rooted in the rich history of the credit union movement. Let’s take a quick look at the backstory of credit unions and how they came to be the thriving financial institutions we know today.

The first credit union was established in 1864 by Friedrich Raiffeisen in rural southern Germany. Raiffeisen believed his neighbors and friends could enjoy an enhanced standard of living if only they had access to common funds. He proposed that all community members pool their resources so individuals in need of loans could easily access the necessary funds. Raiffeisen’s idea was well received by his community, and the first credit union model was soon established.

In 1909, the credit union movement crossed the ocean to reach American shores. With Edward Filene serving as its pioneer, the movement gained momentum and continued its growth. In 1920, Edward hired attorney Roy F. Bergengren to assist him in generating the movement’s expansion. Roy soon created a more systemized concept for the credit union model we know and love today.

Credit unions were gaining popularity and popping up all over America, but it was only in the 1930s that the credit union movement achieved federal recognition and national acceptance.

When President Franklin Delano Roosevelt signed the Federal Credit Union Act into law in 1934, federally chartered credit unions in every state became legally authorized to create a system of not-for-profit cooperatives to promote thrift and sound financial practices.

The Federal Credit Union Act enhanced the public’s confidence in the credit union movement, and it continued to spread across the country. In 1970, that sense of security grew stronger when the National Credit Union Share Insurance Fund (NCUSIF) was established. Credit union deposits gained federal insurance that functions much in the way the FDIC insures bank deposits. Your money is always safe at Destinations Credit Union!

With the credit union movement growing at its most rapid pace, prospective members flocked to join the new member-owned financial institutions being established all over the U.S. In fact, between 1970 and 1979, credit union assets in America tripled.

In 1977, another credit union-friendly regulation was signed into law, empowering credit unions to offer more services and products to their membership, most notably mortgage lending and share certificates (which function much like CDs).

Today, the credit union movement continues to thrive in the path charted by its predecessors and is backed by the “full faith and credit of the United States Government.” These not-for-profit institutions serve their 103 million+ members by always putting their members’ needs first and helping them achieve their personal goals through sound financial practices and targeted advice.

Here at Destinations Credit Union, we’re proud to be a part of the collective institutions dedicated to the credit union mission. At the core of our values is an unwavering commitment to creating mutual benefits for members and the larger community. To that end, we are always here to help our members and enable them to optimize their savings or manage finances as smoothly as possible. Our innovative banking solutions, low fees and high dividend rates, along with personalized service, helps members achieve and maintain financial wellness no matter the financial goals they have. As a member-owned institution, our only objective is your satisfaction and your success.

Credit union history is still in the making. Be a part of it by calling, clicking or stopping by Destinations Credit Union today to learn about our exceptional financial products and to benefit from our highly personalized service.

Experience the credit union difference!

Your Turn: How does the core credit union value impact your finances in a positive way? Share your thoughts with us in the comments.

SOURCES:
https://www.mycreditunion.gov/about-credit-unions/historical-timeline

https://www.thebalance.com/national-credit-union-share-insurance-fund-ncusif-315404
https://www.creditkarma.com/advice/i/difference-between-credit-union-and-bank/%3Famp
https://www.nerdwallet.com/blog/banking/credit-unions-vs-banks/

7 Money Myths You Need To Stop Believing Now

We all grow up hearing the same financial advice: Spend less, save more and invest piggy banks in bubbles with a sky backgroundearly. While most of these words of wisdom ring true, there are lots of widespread money management tips that are actually false.

Read on for 7 money myths that might be causing you more financial stress than benefit.

Myth #1: Debit is always better than credit.

Do you automatically reach for your debit card when making a purchase? While it’s true that paying for your expenses with money you already have in your account is often the best choice, there is a time and a place for credit cards as well.

The real deal: Credit cards get a bad rap for the debt trap they represent, but they should be your payment method of choice on occasion. First, many credit cards offer rewards in the form of travel miles, cash-back systems and other bonuses. Second, building and maintaining a strong credit history is crucial for your financial wellness; the only way to achieve this is by using your credit cards and paying your bills on time. Finally, lots of credit cards offer purchase protection, which makes them the smarter payment method for big-ticket items.

Destinations Credit Union offers both debit cards and credit cards.

Myth #2: Buy a home at all costs.

It’s part of the American Dream: Go to college, land the perfect job, get married and buy a house, complete with white picket fence and two cars in the driveway.

Unfortunately, though, too many people are fixed on that dream without realizing that owning a home might not be in their best financial interests.

The real deal: For many people, including those who are not yet ready to put down roots or who anticipate a career change that necessitates moving across state lines, renting a home or apartment might be the better choice. It can also be a financially expedient option if you live in a super-expensive area.

If you are in the market for a home loan, visit Destinations Credit Union.

Myth #3: Investing is only for rich people.

Investing is for people who drive luxury vehicles and have homes in three different states.

Or is it?

The real deal: Anyone with a small pile of money squirreled away can get a foothold in the stock market. A smart investment strategy can be the best way to let your money grow and put you on the track to financial independence. If you’re a beginning investor, look into passively managed index funds for an easy way to start building your wealth.

Myth #4: My partner manages our finances, so I don’t need to think about money at all.

Are you living in blissful financial oblivion, confident that your partner is managing your money?

The real deal: Every adult should have a handle on their family’s finances, regardless of their partner’s involvement. While it is fine for one partner to actively manage their money, it is crucial for both partners to be aware of the state of the family finances and to be capable of managing the household expenses and investments if something happens to their partner.

Myth #5: Credit cards will get me through any financial crisis.

Why would I need an emergency fund? I have credit cards!

The real deal: Depending on credit cards to get you through a financial emergency is the perfect way to dig yourself into a deep pit of debt. Thanks to interest, you’ll be paying back a lot more than you spend. You’re also more likely to overspend when you pay with plastic.

Credit cards should not be relied upon for a real financial emergency, such as a job loss, divorce or illness. It’s best to build an emergency fund consisting of three to six months’ worth of living expenses so you’re completely covered for the unexpected.

Myth #6: I’m so young; I don’t need to think about retirement.

Who can think about retirement when it’s so far down the road because they’re just starting a career? Besides, who can afford to save for retirement when they’re bogged down with more pressing expenses, like saving for a house and putting kids through college?

The real deal: There’s no better time to start planning and saving for your retirement than right now. The younger you start building your retirement fund, the less you’ll have to put away each month, and the more you’ll save by the time you’re ready to retire. Gift yourself with a comfortable, stress-free retirement by maxing out your 401K contributions, and/or opening an IRA or another retirement fund. Start today and let compound interest work its magic!

Myth #7: I have enough in my account to cover my expenses so I don’t need to budget.

Budgeting is for people who are barely squeaking through the month. I have enough money; so why budget?

The real deal: Budgeting is for everyone. Without a realistic budget in place, someone pulling in a salary in the high six digits can easily spend their way into debt. A budget will force you to make responsible money choices and to be fully aware of the state of your finances at all times.

Your Turn: Which money myths have you bought into in the past? Tell us all about it in the comments.

SOURCES:
https://www.google.com/amp/s/www.thenest.com/content/amphtml/money-myths

https://www.listenmoneymatters.com/top-10-money-myths/
https://www.daveramsey.com/blog/foolish-money-myths
https://www.fidelity.com/viewpoints/personal-finance/6-money-myths

All You Need To Know About Flipping Houses

In the 2019 real estate market, home-flipping has become more popular than ever.man painting as family looks on

Flipping houses is a basic real estate investment concept that involves purchasing a rundown or undervalued home at the lowest possible price, spending the necessary time and money fixing it up and then selling it for a profit. Flipping, or rehabbing, homes has become the primary or secondary source of income for thousands of people across the country. In fact, according to a report by ATTOM Data Solutions, a total of 48,457 single-family homes and condos were flipped in the first quarter of 2018.

If you’re thinking of jumping on the home-flipping bandwagon, proceed with caution. You’ll need nerves of steel, large sums of cash to work with and the ability to juggle several projects at once.

Read on to learn more about buying, rehabbing, and selling properties for profit so you can make an informed decision.

Is it a good time to flip houses?

2019 can be an excellent time to make money by rehabbing properties. The robust economy and falling mortgage rates mean more people are rushing to buy homes this year. Consequently, prices on homes are predicted to rise as supply falls behind demand. This can be excellent news for rehabbers who can make a bigger profit off a home-flip.

Before you get started

If you think house-flipping may be for you, ask yourself these questions before getting started:

  1. How is my credit?  Unless you’re paying for each house in cold cash, you’ll need to have a minimum credit score of 720 to qualify for mortgages on the homes you’ll be flipping. If you’re not there yet, work on raising your score before launching a house-flipping business.
  2. Can I afford the down payment?  You’ll also need to have a large amount of cash available for your first down payment. The more you can drop on a house, the bigger chance you have of winning a bidding war.
  3. Can I handle a delay or a loss? You might sink $40,000 into a house and then watch in horror as it sits on the market while refusing to sell. You might buy a house in an up-and-coming neighborhood, but the market promptly falls apart as soon as you close. Hopefully, you’ll only see success, but you’ll need to be emotionally and financially prepared for unpleasant surprises.

5 Steps to Starting a House-Flipping Business

Are you ready to flip some houses? Follow these steps to get your business up and running!

Step 1: Create a business plan

Sit down and write up a business plan before making any other moves. Outline your goals, delineate the number of projects you can realistically manage over the course of a year, create timelines for each project, build a marketing strategy and determine a financing source for your business. Get as detailed as possible for optimal success.

Step 2: Acquire financing

The simplest way to flip a home is to acquire the entire property with cash. But, if you don’t have access to such huge sums of cash, you can still be a successful house-flipper. You can take out a personal loan or a business loan from [credit union], tap into your 401K or open a HELOC against your home.

Step 3: Find the right group of professionals

If you’re super-handy around the house, you can rehab the homes yourself. Otherwise, you’ll need to hire a group of professionals to help you succeed at rehabbing the houses you intend to flip. You’ll also need to seek counsel from attorneys and others who are well-versed in local laws to make sure your house is up to code and that you have all the necessary permits for construction projects. Take your time researching and hiring the right group of professionals, as a smart choice now will save you loads of money and time down the line.

Step 4: Find your property

Once you have your business plan, financing and group of³ professionals in place, you’re ready to look for your first property. But where do you start looking?

Most experts predict that the best investment opportunities of the 2019 housing market will be found in the suburbs, and more specifically, in emerging new neighborhoods. This way, you can capitalize on lower prices without getting stuck with the house no one wants to buy in a less-than-desirable neighborhood. Check out factors like crime rates, desirable schools, and the number of foreclosures in any neighborhood you’re considering.

The best way to find homes is to trundle around a neighborhood, look for vacant houses, and then send the owners a letter, asking if they’re willing to sell. You can find properties for sale at auctions, on home-searching sites like Zillow and Realtor.com, or by driving around your chosen neighborhood and scouting out For Sale signs. It’s best to have a licensed inspector check a potential home for structural problems and deficiencies before you close.

Step 5: Buy, rehab, market and flip

Once you’ve found a potential house to flip, use the “70% Rule” to determine if it’s a worthwhile proposition. The 70% rule states that an investor should pay no more than 70% of the ARV (after-repair value) of a property minus the repairs needed. If you follow this rule and all works out, you’ll walk away with a sizeable profit.

As soon as your purchase is finalized, the clock starts ticking. Every day you own the home is another day you need to pay the mortgage. If your doing the rehab yourself, get ready to start as soon as you close. Otherwise, have your team of professionals prepared to begin their work as soon as the home is yours. Depending on the condition of the home, this can take anywhere from several weeks to several months. During this time, be sure to check periodically that all renovations are up to code.

When the rehab is nearing completion, you can start marketing the home and vetting out potential buyers. Check out similar homes in the area to work out a fair asking price. With any luck, you’ll find a buyer quickly and the home will once again change owners.

If you’re ready to start a home-flipping business, stop by Destinations Credit Union to talk about your financing options. We can help make your business dreams a reality!

Your Turn: Have you ever flipped a home for profit? Share your experience with us in the comments.

SOURCES:
http://money.com/money/5640988/why-500-houses-in-st-louis-are-on-sale-for-1/

https://www.mashvisor.com/blog/2019-start-house-flipping-business/
https://www.google.com/amp/s/www.thestreet.com/amp/how-to/flip-a-house-14843879
https://www.investopedia.com/articles/mortgages-real-estate/08/house-flip.asp

When Should I Put My House On The Market?

If you’re thinking of selling your home, think spring. That’s because the season of family in front of houseblossoming flowers and gentle breezes has traditionally held the designation as the best time of year to sell a home.

Before you start prepping your home for a photo shoot that shows it off in the best light, take a moment to consider your particular circumstances and needs. What makes spring so well-suited for house-hunting? Does the seller benefit from this arrangement, or is it only advantageous to the buyer?

Let’s take a deeper look at the sell-in-the-spring rule so you can make an informed decision about when to put your house on the market.

Why spring?

There are two primary factors making spring an excellent season for selling a home: The weather and the time of year.

The beautiful, mild weather of spring showcases the exterior of your home in all its glory. Your yard will be alive with healthy, green grass, your flowers and bushes will be in full bloom, and your property will be free of unsightly piles of leaves or mounds of melting snow. If you have an in-ground pool, there’s a world of difference between presenting it to a prospective buyer when it’s sparkling under a brilliant sun, or pointing to a dark, covered shadow at the edge of your yard surrounded by windswept branches and ice puddles.

The pleasant weather that typically heralds the arrival of spring also makes it easier for you to tend to repairs and upgrades on your property. The cold and the dark tend to lead to neglect. Plus, it’s a lot easier to paint the picket fence, stain the deck, and power-wash the siding when the weather is mild and sunny.

Aside from delightful weather, springtime also brings the end of the school year. House-hunting in the spring often makes the most sense for families that include school-age children. This way, they can be settled into their new homes and schools before the new school year. By listing your home for sale in early spring, you’re making it available for this entire group of house-hunters.

Finally, spring means longer daytime hours. This can be advantageous for shoppers who work full-time and can only spare time for home viewings in the evenings. You can schedule a viewing as late as 7 p.m. and still enjoy the benefits of a daylight showing.

Do homes listed in the spring really sell quicker and at higher prices?

It’s not just hype. There are actually studies proving that houses sold in late spring to early summer are on the market a shorter amount of time than houses listed the rest of the year. Also, they tend to close at higher price points.

Here is a sampling of studies proving this theory:

  • An ATTOM Data Solutions analysis of 14.7 million homes sold over a span of 6 years proved the best month to sell a home is May. Most homes sold during this month closed at 5.9% above their estimated market value when compared with other months.
  • A Zillow study showed that homes sold during the first two weeks of May tend to be on the market less time than homes sold any other time of year.
  • According to Realtor.com, homes listed during the spring are 1% less likely to sell with a price cut than homes listed during the rest of the year.

Does this rule hold true for everyone?

“Springtime to market” might be a good rule of thumb for most home-sellers to follow, but it does not apply in every case. Here are some factors to consider:

  • The local market. If your neighborhood is full of for-sale signs and your home does not have any distinguishing features, you may put yourself at a severe disadvantage by listing your home in the spring. Consider waiting until the market cools off in mid-summer, or even in the early fall months.

On the flipside, if your home has one or more features that set it apart, you’ll want to list it when the neighborhood is full of house-hunters, to give it optimal exposure.

  • Your preferred time to move. When is the ideal time for your family to move to another town? Pick a date and work backward to decide when to list your home. There’s no way to determine exactly when you’ll close on a listed home, but Realtor.com estimates the average home sale takes 50 days to close after going under contract. Add a month for preparing your home for the market, choosing a selling agent, making any necessary repairs or upgrades, and finding a buyer.
  • Local climate. Springtime might mean beautiful weather for much of the country, but in some areas, like Southern California, pleasant, mild weather is an all-year-round delight. Conversely, in many northern states, the warmer weather doesn’t set in until early summer, and you’ll want to wait a bit before putting your home up for sale.

Whether you choose to put your house on the market in spring, or you decide you’d be better off waiting until summer or fall, we wish you a smooth sale at the best possible price. Don’t forget to stop by [credit union] to ask about our fantastic home loan options when you’re ready to start searching for a new place to call home.

Your Turn: Have you sold a home in the spring or summer? Tell us all about it in the comments.

SOURCES:
https://www.pennymacusa.com/blog/what-is-best-time-to-sell-house

https://www.housingwire.com/articles/48685-want-to-sell-your-house-list-in-the-1st-week-of-april
https://www.google.com/amp/s/www.forbes.com/sites/reneemorad/2018/04/30/the-best-month-and-day-to-sell-a-home/amp/
https://www.google.com/amp/s/www.fool.com/amp/retirement/2018/05/31/whats-the-best-time-to-sell-a-house.aspx

 

What To Buy And What To Skip On Memorial Day

Since 1971, Memorial Day has been celebrated as an extended weekend away fromtwo women shopping in the spring work–and the unofficial start of summer. It’s time to get that grill going, dust off your patio set, and break out the white jeans you’ve had stashed away all winter.

More recently, Memorial Day has also turned into a second Black Friday for retailers, each offering loads of sale events in stores and online,and each promising to save you heaps of money. Lots of these sales will run for a full two weeks, starting a week before Memorial Day, which falls on May 27 this year, and continuing until the end of the month.

As always, though, not every marked-down product is actually a bargain. In fact, you can sometimes get the same product a lot cheaper by waiting a few months-or even just a few weeks. And of course, if the for-sale item is not one you need, you’re better off leaving it in the store. But, if you know what to shop for and you’re careful to stick to what you need and can afford, you can find some great deals.

Let’s take a look at what to buy and what to skip this Memorial Day weekend.

Buy: Outdoor essentials

Get ready to welcome summer with outdoor gear like grills, lawn mowers, mulch, ladders, and more, which may be marked down as much as 50% at stores like Lowe’s and Home Depot. Online retailers, like Wayfair and Overstock, host similar events and may offer free two-day shipping in honor of the summer season kickoff.

Skip: Electronics

You’re going to see lots of crazy-low deals on gaming consoles, laptops, and tablets around Memorial Day weekend. But, unless you need one now, it’s better to wait it out. You’ll find even better deals on electronics during Black Friday season, when retailers are looking to clear out last year’s models to make room for the newer inventory. If you need your electronics sooner than November, you may consider waiting until July, when many retailers host “Black Friday in July” events that feature steep discounts on electronics.

Buy: Furniture

Memorial Day weekend is the perfect time to spruce up both the inside and outside of your home with new furniture. You can snag a great deal on a fully-loaded patio set, pick up a comfortable sofa, and even swap your old mattresses for new ones, all at great prices. You may need to use a coupon code to qualify for the reduced price, so be sure to check out a retailer’s website before hitting the store.

Skip: TVs

Don’t make the mistake of picking up a new TV in May just because you found one at an excellent price. Most marked-down TVs you’ll find around Memorial Day are older models with outdated features. You can find much better deals on newer models in November or January.

Buy: Wedding registry gifts

Department stores, like Macy’s and JC Penney, offer discounts on household essentials, like coffee makers and blenders, in advance of the wedding season. You’ll also find markdowns on these items at specialty stores, like Bed Bath & Beyond. If you’ve got any weddings to attend this summer, pick out a registry gift now to save big.

Skip: Cars

If you’re looking for a new set of wheels, wait until after June. You’ll find the hottest deals on cars between July and October, when dealerships are trying to move old inventory and make room for the newer models.

Buy: Tires

Preparing the family car for a summer road trip? You’ll find the year’s best prices on tires around Memorial Day weekend.

Skip: Swimwear

Don’t splurge on swimwear and other summer apparel just yet. Wait until June, or even mid-summer if you can swing it, for the steepest discounts.

Buy: Spring apparel

Retailers have been displaying their warmer-weather line for months now. That makes the end of May a perfect time to stock up on spring wear.

Skip: Power tools

You’ll only have to wait a few weeks for the hottest deals on power tools. Father’s Day sales usually start at the beginning of June, and they offer deep discounts on power tools and other outdoor power equipment.

Buy: Appliances and home décor

Retailers and manufacturers alike offer markdowns on large household appliances, like refrigerators, dishwashers, and ovens, at the end of May. Hold onto your receipts, as you may need to mail them to the manufacturer for a cash-back rebate. You can also score a deal on home décor products, like light fixtures, flooring, and kitchen essentials, at Memorial Day sale events.

Skip: Jewelry

All that glam won’t glow so brightly if you have to drain your wallet to pay for it. Skip the diamonds this month and wait until late summer, when the jewelry business is at its slowest and retailers put some of their products on sale. If you can wait even longer, push off your purchase until the end of February, when jewelry prices are at their lowest.

Now that you know what to buy and what to skip this Memorial Day, you can kick off the season of poolside barbecues and aimless road trips by snagging some great deals!

Your Turn: What was your best Memorial Day find ever? Tell us all about it in the comments!

SOURCES:
https://www.finder.com/memorial-day-sales

https://www.google.com/amp/s/www.marketwatch.com/amp/story/guid/99B0B79C-4236-11E7-AE38-779A9096A819
https://www.nerdwallet.com/blog/shopping/shopping-tips-news/what-to-buy-skip-may/

Mortgage Rates Are Dropping; Should I Refinance?

Q:  I’ve heard that mortgage rates have dropped dramatically since the start of 2019. three people going over paperworkShould I refinance my mortgage loan to take advantage of these lower rates?

A:  Refinancing a mortgage is essentially paying off the remaining balance on an existing home loan and then taking out a new mortgage loan, often at a lower interest rate. It may sound like a no-brainer, but there are many factors to consider before moving forward with a refinance.

Is it a good time to refinance?

Mortgage rates have been falling steadily over the last few months. During the last week of March this year, rates took their biggest one-week nosedive in more than a decade, and mortgage applications rose 39%, as thousands of homeowners sought out their lenders for a refinance.

However, the downward trend has already reversed as of the beginning of April, when rates hit 4.29 percent. That’s up from 4.17 percent just one week prior. If you’re thinking of refinancing in the near future, it’s best to do move quickly so you can lock in the lowest possible rate. You may be able to save hundreds of dollars a month if you refinance a loan that currently has a relatively high interest rate.

Is a refinance right for you?

While this is definitely an excellent time to take out a new mortgage, that doesn’t mean a refinance is the right fit for everyone.

Here are two reasons a refinance might be a good fit for you:

  1. Your credit is strong and you’d like to lower your monthly payments

The first, and most obvious, reason homeowners refinance their mortgage is to take advantage of a lower interest rate. The drive behind this reason might be a change in finances, personal life or simply the desire to save money. As mentioned, the current mortgage rates make this an excellent time to refinance into a lower interest rate.

Don’t try a refinance unless your credit is in good shape, though. Taking out another mortgage with a less-than-desirable credit score can mean getting hit with a high interest rate, even if national rates are dropping.

Aside from reducing your monthly payments, a lower interest rate can also help you build more equity in your home sooner.

  1. You’d like to shorten the life of your loan

People sometimes choose to refinance their mortgage because they want to finish paying off their loan sooner. If you have a mortgage that has a really high interest rate but you can easily meet these payments, consider refinancing into a shorter-term option. You may be able to pay off your loan in half the time without changing your monthly payment much at all.

When refinancing your mortgage is a bad idea

In the following three circumstances, refinancing your mortgage may not make sense.

  1. You’re in debt.

If you’re looking for the extra stash of cash each month to pull you out of debt, you probably shouldn’t be refinancing. Most people who refinance for this reason end up spending all the money they save, and then some. Without making any real changes to your spending habits, giving yourself extra money is only enabling more debt. While the intention is rooted in sound logic, unless you make an equally sound change in your spending habits, you’ll be right back to your present situation in very little time.

  1. A refinance will greatly lengthen the loan’s terms.

If you’ve only got 10 years left on your mortgage and you want to refinance to stretch out those payments over 30 years, you won’t come out ahead. Any money you save on lower payments will be lost in the cost of the refinance and the extra 20 years of interest you’ll be paying on your mortgage.

  1. You don’t plan on living in your home much longer.

If you plan on moving within the next few years, the money you save might not even come close to the costs of a refinance.

How much will it cost?

Homeowners are often eager to get started on a refinance until they see what it will cost them.

Remember all those fees and closing costs you paid when you first bought your house? Prepare to pay most of them again. Broker fees will vary, but a typical refinance will cost anywhere between 3-6% of the loan’s principal.

Before proceeding with your refinance, make sure you’ll actually be saving money. You can do this by procuring a good faith estimate from several lenders. This will get you your projected interest rate and the anticipated loan price. Next, divide this price by the amount you’ll save each month with your anticipated new rate. This will give you the number of months that will have to pass before you break even on the new loan. If you don’t plan on staying in your home for that long, or you can’t afford to wait until then to recoup your losses, refinancing may not make sense for you.

Rates are still low, and if your finances are in good shape, a refinance can be a great way to put an extra few hundred dollars into your pocket each month. [If you’re ready to talk to a home loan expert about refinancing, call, click or stop by Destinations Credit Union today to ask about getting started on your refinance. We’re always happy to help you save money!

Your Turn: Have you refinanced? What drove your decision? Was it the right decision for you? Let us know in the comments!

SOURCES:
https://www.myfinance.com/5-reasons-to-refinance/?utm_source=Millennial+Money&utm_campaign=millennialmoneycru&utm_medium=mfCRU

https://www.consumersadvocate.org/mortgage-refinance/a/best-mortgage-refinance?matchtype=e&keyword=should%20i%20refinance&adpos=1t2&gclid=CjwKCAjww6XXBRByEiwAM-ZUILOeJrx3aTigcckJXeQcxYZ5KC-gPj1HDcbQYQlprrg3zX08LqGaohoCL14QAvD_BwE
https://www.investopedia.com/mortgage/refinance/when-and-when-not-to-refinance-mortgage/
https://www.investopedia.com/mortgage/refinance/7-bad-reasons-to-refinance-mortgage/
https://www.bankrate.com/mortgages/analysis/
https://www.wkbn.com/news/local-news/with-mortgage-rate-drop-many-buyers-consider-refinancing/1897961701