Lower Your Home Mortgage Rate With These 3 Tips

lowermortgage.jpgHomeownership is a dream of many people. However, this dream comes with the cold, hard reality of a monthly mortgage payment, including interest. Keeping mortgage rates manageable is a key factor in remaining financially stable after buying a new home. Here is how you can do just that.

  1. Increase Your Down Payment

The standard down payment for a home is usually 20% of the total cost, but in some cases, you may be able to provide much less than that. However, there are very good arguments for providing as large a down payment as you can manage. The bigger down payment, the less interest you’ll need to pay. Monthly payments will also be smaller when down payments are more substantial.

  1. Decrease the Loan Term

Many home loans come with a 30-year term. While this provides ample time for you to pay off your loan, it can also greatly increase costs. If possible, consider a shorter term, such as 10 or 15 years. Not only will you have your home paid off much quicker, you’ll also end up paying a lot less.

  1. Improve Your Credit Score

While there is no quick-fix to a fair or poor credit score, if you’re planning to buy a home sometime in the future you should take steps to improve your rating now. Your score is based on a number of factors, including the balance on your credit cards. Keep this figure to no more than 30% of the total credit limit, while also making sure you pay your bills on time each month.

 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

5 Ways to Budget After the Holidays

post-holidayThe holidays are a period of gift-buying, travel expenses, and time off work, so it’s easy to spend more than you earn. The best New Year’s resolution you can make is to straighten out your finances. Here are a few tips to help you stick to your budget and replenish your credit union account.

1. Take Inventory of Where You Are Financially

Once the holidays are over, it’s time to review your credit card statements. Make sure you can at least make the minimum monthly payments. If the totals are quite high, consider putting the cards in a drawer until you pay the balances down.

2. Curb Excess Spending

Restrict spending when it comes to items that you don’t need right away. A good spending formula to use is the 50/30/20 rule, which allocates 50% of your monthly income to essentials, 30% to debt repayment, and 20% to wants. Once the debt is paid, put that money into savings.

3. Record Your Expenses

Record your everyday expenses so you know where to further cut back on spending. After a few months, review your notes for small indulgences, like coffee and dining out, that add up over time. Once you’re aware of them, ask yourself the next time whether you want to treat yourself or stick to your financial goals.

4. Set Up Automated Payments

Automating your payments through online banking ensures you set aside enough money for your credit card balance, plus you’ll never have another late fee. Paying off your balance consistently will also build your credit score. Just make sure you have enough money in the debited account every month.

5. Return & Reap Rewards

If you received a gift you likely won’t use, return it if possible. Also, redeem cashback deals or reward points on the credit cards you used leading up to the holidays, and use any gift cards. Whether you put these small bonuses toward your daily needs, debt balances, or credit union savings account, you’ll have extra cash on hand.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

 

How to Save for Your Child’s College Education

college education

Just about every parent wants to send their child to college, but higher education is incredibly expensive. In fact, the average cost for one year of school is over $26,000 — up 34% from a decade ago. Luckily, there are many programs provided by local credit unions and state governments that can help you save for your child’s education and avoid taking out a line of credit. Here are three of the top options available.

1. Traditional Savings Account

Savings accounts allow you to steadily grow your money with a guaranteed interest rate. Additionally, the risk of utilizing such a service is low as long as you choose an insured credit union. Since the annual percentage yield (APY) of savings accounts are usually lower than riskier investment options, parents typically create a portfolio consisting of multiple account styles to obtain both security and potential growth.

2. IRA

An individual retirement account (IRA) is a type of investment account with long-term savings in mind. Even though earnings aren’t guaranteed as they are with a traditional savings account, the potential growth is typically higher. Such accounts also allow you to withdraw money completely tax-free for an approved expense.

While traditional IRAs are designed solely for retirement, a Roth IRA can also be utilized for buying your first home and higher education expenses. Alternatively, a Coverdell IRA caters to college expenses specifically, including tuition, books, and fees. There are contribution limitations for both styles, and credit unions require minimum balance requirements to avoid fees.

3. 529 Plan

Just about every state offers their own state-sponsored 529 plan, which allows you to invest post-taxed income in stocks and bonds. With Hawaii’s HI529 program, the minimum initial investment is only $15, and each account is allowed to grow to $305,000 before contributions are capped, which may help your family avoid taking out student loans down the road. Unfortunately, the program doesn’t qualify for any state tax deductions, and you’ll face minimum yearly fees. However, parents have the option to invest in any state’s 529 plan regardless of where they live or the child plans to attend school.

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

3 Situations That Call for a Personal Loan

personal loanPersonal loans can increase your buying power. In the long run, taking out a loan can actually save money and may even help you secure additional credit in the future. Below are a few situations in which taking out a personal loan can be a wise financial move.

1. You’re Consolidating Debt

Credit cards and other consumer lending products typically have extremely high interest rates, especially if your credit rating is on the lower side. Taking out a personal loan to pay off credit cards simplifies your bill-paying process and could save you hundreds of dollars in interest. In some circumstances, using a personal loan to refinance student debt can be a smart financial move, especially if your current interest rates are high.

2. You Have a Financial Emergency

Auto breakdowns and home repairs can cost thousands of dollars, which is more than many families can afford out of pocket. A personal loan can provide the resources to deal with financial emergencies, usually at substantially lower rates than credit cards. If you’re making a major purchase or funding a large event, borrowing from a credit union can be more affordable than financing through the seller as well.

3. You’re Rebuilding Credit

Establishing a reputable credit history means showing lenders you know how to manage debt responsibly. Taking out a small personal loan and making every payment on time will bring up your credit score, making it easier to qualify for lower-interest lending products in the future.

 

 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

What to Know Before Applying for a Line of Credit

Regardless of how well you plan and budget, unexpected expenses can arise at any time. Whether you suddenly have car trouble, discover a leaky roof, or require medical care, you may find yourself needing quick financial help. Taking out a line of credit is one option that allows you to access extra funds when necessary. However, before borrowing money, you must understand the terms and your repayment obligations. To determine if this is a good option for you, here are the answers to some frequently asked questions about lines of credit.line of credit

How does a line of credit work?

A line of credit is a type of loan that financial institutions offer. Once your application is approved, the amount you qualify for will be placed into an account that you can withdraw from as needed. You’ll pay either the monthly minimum amount due or make larger payments to reduce your principal balance faster. As you make payments, more funds will become available to borrow.

What can it be used for?

While you can withdraw money to meet virtually any financial need, lines of credit are particularly useful for those who might require cash for some time. For instance, it can cover costs for an ongoing home renovation project, or it can help bridge the gap for freelancers who are waiting for their next paycheck.

What’s the difference between a secured and unsecured line of credit?

When you take out a secured line of credit, you must provide the lender with one of your personal assets—such as a car or home—as collateral. They’ll use this to recover what you owe if you default on the loan. In contrast, unsecured lines of credit don’t require collateral, though they often have higher interest rates.

What are the benefits?

Lines of credit allow you to use up to 100% of your preset borrowing limit, whereas you can only access a portion of your limit in cash when using a credit card. This is important if you have a big purchase that can’t be placed on a card. Additionally, you only pay interest on the money you withdraw, and rates can be much lower than credit card interest rates.

 

If your finances need a boost, turn to your trusted local credit union to ask about applying for a line of credit.  With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

 

3 Scams to Avoid This Holiday Season

holiday scamWhile the holidays are a season to give to others, consumers should always stay aware of how they might be giving to criminals. During this time of year, many individuals take advantage of seasonal distractions and attitudes to steal money or information that doesn’t rightfully belong to them. Fortunately, you can learn how to identify and avoid this kind of fraud. To help you and your wallet stay safe, here are three common holiday scams and how to steer clear of them.

1. Fraudulent Websites
Cybercrime is one of the easiest ways to take advantage of shoppers during the holiday season. For example, fake retailers may set up websites that promise to have out-of-stock items available, causing consumers to spend money on gifts they’ll never receive. Other cybercriminals may disguise themselves as trustworthy parties to collect data, such as online banking passwords, from online users.

For the best fraud protection, only make online purchases from trusted retailers that use secure websites. If your browser detects a security concern or an offer seems too good to be true, don’t complete the purchase.

When you receive e-mails from seemingly real senders, pay close attention to their addresses. Many individuals will use names that are similar to recognizable brands to collect personal information, such as by having you click on a link that directs you to an unbelievable sale or a fraudulent package delivery claim. If you’re ever unsure, contact the retailer’s customer support.

2. Fake Charities
Beware of people asking for donations during the holiday season—they may be collecting on behalf of themselves, not a valid charity. While you may be in the giving mood, always be skeptical of whom you hand cash to.

If you want to contribute, ask the volunteer for other ways that you might donate, such as by making a secure online payment. Before you donate, research the organization to make sure they maintain a 501(c)(3) non-profit status with the IRS.

3. Pickpocketing
When in crowded shopping centers or tourist attractions, criminals take advantage of these distracting environments to pickpocket unsuspecting individuals. To keep thieves from targeting you, always place belongings somewhere secure and hard-to-access, such as in a front pants pocket or a cross-body bag. It’s also smart to avoid carrying cash. Instead, carry credit or debit cards that offer fraud protection.

Cards can be pickpocketed digitally too. Many now allow for contactless payments, and someone with an RFID skimmer can scan their information wirelessly. For example, criminals may attach skimmers to ATMs to read people’s cards as they withdraw cash. Always check the machine for anything unusual before using it, such as differently colored slots or misaligned graphics.

 

With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.

5 Tips to Maximize Your Holiday Budget

holiday budget

It’s holiday season, and while you should be excitedly anticipating December festivities, you’re just glued to your online banking app and stressing about how you’ll pay for all that entails. While you can cut corners with holiday discounts and free shipping deals, there are other ways to manage your money in addition to these classic price cuts. If your holiday expenses are sending you into a frenzy, try these tips to bring some joy back into the season.

Savvy Tips for Holiday Shopping

  1. Make a List of All Holiday Expenses
    Take a page from Santa’s book—make that list and check it twice! The holidays are expensive, but planning ahead can save your bank account from unnecessary buys. But remember, this list should cover everything you buy for the holidays—not just gifts. That can include wrapping paper, traveling expenses, decorations, and food and drink for festivities.
  2. Make an Elaborate Budget
    Deciding early on a realistic budget for your list of expenses will prep you for the holiday hit to your paycheck. In addition to making an overall budget, categorize what amounts of that money goes to each expense, whether it’s for the grocery store run prepping for Christmas dinner or planning how much you spend on a gift for a particular family member.
  3. Stick to Cash
    When you can, buy in cash. Even if you’re constantly checking your online banking, credit card purchases can get away from you when you can’t physically see the money leaving your hand. This strategy makes you more accountable for your money and gives you a tactile understanding of how much you’ve spent.
  4. Strategically Buy Online
    When you do need to online shop, try to buy multiple gifts from the same retailer in one purchase. Doing so will save you money on shipping, but it does require some thinking ahead to assure you bought everything you could from that retailer in one fell swoop. Also, checking your online banking app to research what benefits and partnerships your credit card has lined up; oftentimes they’ll have deals for your favorite stores and sometimes even cash back hanging around to give you some extra money.
  5. Get a Holiday Job
    If your budget leaves you strapped for cash, offset that financial pain with a holiday job. Retailers are always looking for seasonal hires during this season to cater to the increased crowds caused by shoppers like you. If you go this route, for an added bonus, try to work at a retailer where you would buy gifts—that employee discount will save you a little more dough.

 

When you’re stressing about your holiday finances, having a trusted credit union on your side will help to alleviate the burden. With hundreds of millions of dollars in assets and over 60,000 members across Hawaii, Hawaiian Financial FCU is one of the leading financial institutions in the state, with a reputation for combining personalized service with technologically advanced personal banking solutions. Learn more about our broad array of services, follow us on Facebook, Twitter, and Instagram for news and updates, or call (808) 832-3700 on Oahu or toll-free at (800) 272-5255 with any questions.