Tuesday, October 17, 2017

International Credit Union Day: Dreams Thrive Here

Are you as excited as we are to celebrate International Credit Union Day on Oct. 19, 2017?

It’s a day to share your experiences as a member and to reflect upon all the benefits you enjoy by being a part of your credit union. It’s also a day to have fun! We will have cider and donuts at all of our branches on October 19 to celebrate ICU Day so make sure you stop by!

Each year, CUNA and the World Council of Credit Unions choose a theme for ICU Day. This year’s theme, which was selected via an online poll of credit union professionals, is “Dreams Thrive Here.”

As a credit union member, you know this statement is true. Credit unions help your dreams thrive by helping to make them possible. In the spirit of ICU Day, let’s take a quick look at four factors that make credit unions the best choice to allow your dreams to thrive.

1.) Members first 
As a member of a credit union, you own a piece of the organization. That’s why it’s often referred to as a cooperative. Your credit union only wants what’s best for you. This means we can focus on offering superior service and policies that are as member-friendly as possible.

2.) Lower fees 
Banks earn much of their profit through fees and pushing unnecessary products on their customers. While a credit union will also have fees attached to products and services, these tend to be lower than similar fees you’ll find at a bank.

3.) We’ve got your back 
A credit union will be willing to work with you through rough patches. While a bank is more likely to turn down a borrower who has a poor credit history, a credit union member representative will be happy to meet with you and work to find a loan that best suits your needs. If necessary, we can also help you learn the basics of budgeting and may offer programs to help you cover unexpected expenses.

4.) Better dividend rates 
Credit unions offer higher dividend rates on savings accounts and lower interest rates on loans. We only need to cover operating costs, and all the money we save is passed down to our members in the form of favorable rates, enhanced services, community giving, increased operations and more.

As you can see, we’ve got lots to celebrate! Stop by on Oct. 19 so we can show our appreciation and celebrate everything that makes a credit union special. Can’t wait to see you!

Tuesday, October 10, 2017

7 Common Life Insurance Myths Debunked

Many of us let popular misconceptions about life insurance convince us that we don’t need it. Read on to see how seven of the most widespread life insurance myths are easily debunked.

Myth #1: I’m single and I have no dependents. I don’t need life insurance. 
Actually, you do. Every person should have funds to cover their funeral costs and end-of-life medical bills. Also, you can leave a legacy by choosing a cause to be the beneficiary of your death payout.

Myth #2: I’m a stay-at-home parent who doesn’t earn an income. 
My partner needs life insurance; I don’t. The tasks that currently fill your time will need to be outsourced to hired help should you suddenly pass on. Nannies, cleaning help, and cooks cost money. That money can come from the insurance payout of your homemaker’s policy.

Myth #3: Why would I waste money on insurance when I can invest it to earn higher returns? 
You’re better off putting your money somewhere safe with a guaranteed payout – like a life insurance policy. You don’t want to leave your dependents with an iffy source of funds when you pass on. The only exception to this rule is for the truly wealthy, who have more than $1 million in liquid assets and already have their funeral costs and medical bills covered.

Myth #4: I can’t afford life insurance. 
A recent Life Happens study revealed that 80% of uninsured people who claimed life insurance is too expensive, had overestimated its cost. In fact, a 20-year level term policy for a healthy 30-year-old usually falls in the ballpark of just $150 a year.

Myth #5: I’m too young to worry about life insurance. 
Actually, there’s no better time to purchase a life insurance policy than when you’re young. The premiums are far less expensive for those under age 35, and most people in that stage of life do not have sizable assets to pass on to their dependents. Most importantly, dependents of the 25-35 age group will be too young to be financially independent and will need the death payouts for basic survival.

Myth #6: My children are independent adults. Why would I need life insurance? 
Leaving your dependents with an inheritance that helps them purchase a home, start a business or put some money away for a rainy day will keep you in their thoughts long after you’re gone. Also, you don’t want to burden your children with funeral expenses and medical bills when they’re grieving.

Myth #7: My job offers a life insurance policy for employees. If I leave my job, I can take it with me.
Unfortunately, this is false. Most employer-offered life insurance policies are not portable. Since there’s no way to know that you’ll remain at your current workplace forever, it’s best to purchase a separate life insurance policy.

Your Turn: Which of the above myths did you always believe to be true? Do you know of any others? Share your thoughts with us in the comments!

Thursday, October 5, 2017

Fall Into Tax Planning

The leaves are changing. The nights are getting longer. There’s a cool breeze blowing, and apples are falling off the trees. Everyone knows what that means: It’s tax planning time!

While most people don’t start thinking about their taxes until February or even April, the best time to make changes is this year. If you haven’t thought about your taxes since you paid them in the spring, you’re still in good shape. For most tax matters, changes made by Dec. 31 are assumed to be in effect for the whole year. Let’s look at 3 areas of tax planning you should aim to tackle as quickly as you can.

1.) Make any necessary changes to your retirement accounts 
If there’s anything that is further off than tax planning, it’s retirement planning. Still, one of the most compelling reasons for making contributions to your retirement is preferential tax treatment. For starters, you should be contributing the maximum to either a Roth or a Traditional IRA.

From there, it gets a little trickier. If your income dropped this year, say, because you or your spouse lost your job or had a significant reduction in hours, you might not get much benefit out of the tax deduction that is presented by a Traditional IRA. You can take this opportunity to switch a portion of your Traditional IRA to a Roth IRA. Essentially, you’re “paying” the tax on a portion of your IRA in a year when it won’t cost you as much, then switching it into a tax-free growth account.

You also need to make sure you’re contributing to your employer’s 401(k) program. Those contributions are also made pretax – so you can deduct your portion of the matching funds from your tax burden. If you haven’t been contributing, see if you can make “catch-up” contributions to take advantage of the preferential tax treatment.

2.) Spend your “use-it-or-lose-it” funds 
Many employers offer plans like Flexible Spending Accounts (FSA). These programs also offer preferential tax treatment, but many of them empty out at year-end whether you’ve used the funds or not. These programs are a great way to save for unplanned medical problems, but if you were lucky enough to avoid those costs, you’ll need to spend that money before it goes away.

There are a few common tricks you can use to spend the money without wasting it. Obviously, if you’ve been putting off a minor medical procedure (a mole removal, an eye exam, new contacts) that’s the easiest place to spend. Otherwise, you may need to get creative. A few staple goods are FSA eligible. Over-the-counter painkillers, first aid kits and supplies,bb and some disaster preparedness supplies are generally eligible for reimbursement. Consider getting first aid kits as Christmas gifts for young children or donating them to community programs.

3.) Plan your charitable contributions 
If you’re going to donate to a charity, you can give in a way that maximizes your tax benefit. One of the easiest ways to do that is to give stock. Not-for-profit organizations don’t have to pay the capital gains tax, so they can sell it for the full amount. This means you get to take credit for the full value of the gift. This is also true if you plan to give real property (houses, buildings, land, etc.) or use another complex giving strategy to maximize the value of your contribution.

However you give, make sure you keep detailed records about your gifts. You want both a receipt from the organization and another form of proof, like a copy of a check or a bank record. Not-for-profit organizations are almost always overworked and understaffed, so counting on their bookkeeping can sometimes be an exercise in frustration. Keep your own records just to be sure.

Remember, no one can offer you accurate tax advice without a careful review of your finances. If you have questions about filing your taxes, you should speak to a tax planning professional. For most people, though, a little bit of knowledge is enough to get started paying less to Uncle Sam and keeping more in their retirement funds.

Tuesday, September 26, 2017

How to Spot a Credit Repair Scam

Credit repair scammers tell you they can make credit repair quick and easy. Unfortunately, when they’re done, your score may still be low, you’ll have lost a nice chunk of change, and you could even be facing criminal charges. Here are the warning signs of a credit repair scam:

1.) Upfront payment
Under the Credit Repair Organizations Act (CROA), credit repair companies are forbidden to request or receive payment until they’ve completed the services they’ve promised.

2.) Big promises 
Scammers may claim they can remove negative information from your credit report, even information that is accurate and current. Don’t believe them; no one can do this. They might also promise to boost your score in just a few weeks. This isn’t true either. It takes at least 30 days for changes to be evident on your credit report.

3.) Offers a “new credit identity” 
In these scams, companies promise to create a new credit identity for a fee. After you pay, the company will provide you with a nine-digit number. They may refer to this number as a CPN – a credit profile number or a credit privacy number. Alternatively, they may direct you to apply for an EIN – an Employer Identification Number.

The company instructs you to use this form of ID to apply for credit, telling you it is legal. However, it’s not – and you’ve just been scammed. These companies are selling you a stolen SSN. They walk away with your money and leave you in hot water because you’ve just committed multiple federal crimes. Falling for a credit identity scam could mean facing fines or prison time.

4.) Tells you to dispute accurate information on your credit report 
Disputing accurate information on your credit report is illegal.

5.) Evasive when questioned 
The Credit Repair Organization Act made it illegal for credit repair companies to lie about your rights and their services. These companies must provide:
  • A written contract detailing your legal rights 
  • Your three-day right to cancel the contract without charge 
  • The anticipated time it will take until results are evident 
  • The total cost you will pay for their services 
  • Their guarantee 
If you’ve hired a credit repair company that hasn’t lived up to its promises, you can choose to sue the company in federal court. Along with other victims, you can file a class action lawsuit against the company.

Finally, it’s best to report the scam to your local consumer affairs office or to your state attorney general. You can also file a complaint with the Federal Trade Commission (FTC). File your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.

Need help understanding your credit report? Community Financial is here to help and will provide a free credit review. Simply visit a branch near you or call (877) 937-2328.

Tuesday, September 19, 2017

Dealing With a Financial Setback

Financial setbacks come in all shapes and sizes. It can be an expensive household repair, a medical emergency, getting laid off, or the birth of a baby. Whatever the situation, it’s impossible to plan for every financial hit you will take in your lifetime. But don’t fret. If you’re hit with hard times, here are some tips to keep in mind.

1.) Don’t panic 
Keeping calm will allow you to think more clearly and resolve your deficit quicker. As difficult as things seem now, they’ll always look a little better after some levelheaded planning.

2.) Crunch the numbers 
Sit down and work out exactly how much more money you’ll need to cover your new expense or to fill the gap of income loss.

3.) Work twice as hard 
The only ways for stretching a deficit to cover your needs are to either earn more or spend less. Since tightening your budget is almost always stressful, try finding ways to add to your income first. If possible, put in more hours at work. Consider freelancing or consulting. Take a side job for some extra cash. Do whatever it takes!

4.) Trim your spending 
Now it’s time to see which expenses you can trim. First, you’ll need to prioritize. List all the expenses you cannot do without and those that would be irresponsible to neglect. Then, take an honest look at your remaining expenses to see where you can cut back. Shop the sales to cut your grocery bill in half. Trim spontaneous purchases by only using cash. If you’re a two-car family, consider cutting back to one car for now. Push off your vacation plans until things start looking up.

5.) Contact your creditors 
If you cannot make some of your minimum monthly payments anymore, contact your creditors before they come calling on you. Most creditors will be happy to work out a reasonable payment plan with you.

6.) Reach out to family and friends 
Tell your family and friends what’s going on. They’ll support you and encourage you until you get back on your feet, and they may even be able to help out with employment opportunities or contacts.

7.) Be proactive 
Hindsight is always 20/20. Harness the urgency you feel now to get into the habit of building up an emergency fund. As soon as you’re back on your feet, start putting away money for protection in the event of future setbacks. Experts recommend having 3-6 month of living expenses saved up in case you can’t work for any reason.

Do you need help recovering from a financial crisis? We can help! Call us at (877) 937-2328 or stop by your local branch for help with money management or debt consolidation.

Your Turn: How have you maintained your equilibrium during a financial setback? Share your best tips and advice with us in the comments!

Tuesday, September 12, 2017

Can Living Frugally Make You Happier?

We all know that money can’t buy happiness. And yet, many people overspend on a lifestyle they believe will make them happy – only to rack up thousands of dollars in debt. This, in turn, leads to stress, worry and unhappiness. Incredibly, living frugally can make you happier than living lavishly.

If you’d like to live more frugally, establish a goal to keep you focused. Maybe you’d like to travel the world or buy your dream home. Write down your objective and place reminders of your goal where you’ll see them often.

There are so many benefits to living frugally:
  • Appreciating what you have. Instead of throwing away old items, you’ll learn to repurpose them.
  • Choosing experiences over objects. Instead of going to the mall for a new outfit, you’ll play board games with friends. These experiences provide memories and happiness that can last a lifetime.
  • Your debt will diminish. The burden of debt often ties people to jobs and locations they dislike. Once your debt disappears, you’ll have the freedom to choose a profession and location that makes you happy.
  • You’ll have more leisure time. When your debt is gone, you can work less and have more time to pursue hobbies.
  • You’ll be on the path to early retirement. Instead of working through your golden years, you can garden, travel and enjoy your grandchildren.
  • You’ll find joy in helping others. By reducing expenses and saving money, you can help support causes that are important to you. 
Here’s how to get started:

Start small 
Make a list of what you’d like to accomplish, how much money you’ll need to achieve it, and make a plan. Determine which expenses you can live without. Instead of buying gourmet drive-thru coffee, brew your own at home. Brown-bag your lunch instead of eating out. Make a weekly meal plan and cook your meals at home. Steps like these can save you hundreds of dollars a month. 

Consolidate debt 
If you’re paying down multiple credit cards, consider consolidating them into one loan or into a single, lower-interest credit card to save on interest charges. Check out Community Financial’s low-interest credit card options and apply at cfcu.org. Once you’ve consolidated your credit card debt, keep your oldest card, but use it infrequently and close all others. 

Stretch your money 
When purchasing groceries, clip coupons and look for sales. Shopping for clothing? Check local thrift stores, yard sales, and clearance racks for the best possible deals. 

Look for ways to lower your monthly bills. Consider giving up your expensive cable service. Trim your electricity bill by hanging your clothes outside to dry and by unplugging electronic devices when they’re not in use. 

Give frugal living a try! You have nothing to lose, but debt! 

Your Turn: Does saving money make you happy? How do you save – and enjoy the process? Share your thoughts with us in the comments!

Tuesday, September 5, 2017

Shred Your Confidential Documents at Shred Day September 16th

Clues to your personal and financial information are often buried throughout your personal paperwork and mail. One search through your mailbox or trash could garner enough evidence for a thief to take control of your identity — and your finances. Thieves can use credit cards, financial statements, or utility bills to obtain and exploit that personal information.

The first line of defense is to destroy documents that contain your personal information before anyone can access it. Private documents and credit/debit cards, which contain sensitive information, should be destroyed once you no longer need them.

Join us for Shred Day! 

If you are looking for a way to securely shred and destroy your old documents, why not bring them to our Shred Day event on Saturday, September 16th from 2:00 – 4:30 p.m.?

We will have Shred-it trucks on site to securely shred documents at 3 of our branch locations:

Livonia Branch- 34000 W. Seven Mile Road
Canton Branch- 6355 N. Canton Center Road
Gaylord Branch- 1360 W. Main Street 

Shredding is a great way to destroy your personal documents to protect your information and your finances. As a general rule, it’s better to have as few physical documents on file as possible. Switching to online banking and opting-out of paper statements can also help keep your financial information secure.

Hosting Shred Day is just one way we try to help our members and communities, and make their lives easier. If you have questions about our Shred Day event please call us at (877) 937-2328.

Tuesday, August 29, 2017

Big News from Our Student-Run Credit Union Team

Student-Run Credit Union Team
Back to school time means another busy year for our Student-Run Credit Union Team. We partner with several Michigan school districts to operate student-run credit unions and expose thousands of students each year to money management skills. Selected students learn to run their own in-school branches as credit union tellers, branch managers, marketing representatives, computer operators and accountants.

National Recognition 
Community Financial recently received some national recognition at the National Youth Involvement Board (NYIB) annual conference in Boston. Several Community Financial team members were recognized for their financial education efforts in two different categories:

For Students Reached ($500-$999 million asset category)
Suzanne Sundberg- 1st place (4,427 students) 
Erin Ilg- 4th place (4,025 students) 
Jeremy Cybulski- 5th place (3,828 students) 

For Presentations Given ($500-$999 million asset category)
Jeremy Cybulski- 3rd place (202 presentations) 
Kristen La Forest- 5th place (105 presentations) 

Our classroom presentations reached over 17,000 students last school year. We’re aiming for even more this year!

We’re proud to be leading the way regionally, and nationally in financial education! If you know a school that is looking for financial education or some other form of partnership, please let us know. We also work with libraries, boy/girl scout troops, churches, and other community organizations to offer assistance with financial education.

Continued Growth
This year we are excited to announce we will have 49 school partnerships in the state of Michigan! Our newest school partners include Coolidge Elementary in Livonia and Ridge Wood Elementary in Northville. Due to our continued growth, we will also add another Education Partnership Coordinator to our team during the 2017-18 year. 

Our Priority 
We continue to make financial education a priority because we understand that children are the future of our communities. According to Sr. Education Partnership Coordinator, Jeremy Cybulski, “Community Financial is very serious about our commitment to education and as the credit union grows, so will our number of school partnerships. Whether it is through new classroom presentations, student credit unions, or some form of financial education event, we are always looking to break new ground and further our efforts in the communities we serve.” To learn more about our school credit union program please visit cfcu.org/scu.

Tuesday, August 22, 2017

Community Financial Named "Best and Brightest" for 12th Year

We are excited to announce that for the 12th year in a row, Community Financial Credit Union has been named one of Metro Detroit’s 101 Best and Brightest Companies To Work For™! This award recognizes companies for excellence in human resources practices that create exceptional work environments.

So how does a company receive this honor? Awards are based on detailed questionnaires completed by nominated companies and their employees. Companies provide information about things like: work place communication, work-life balance, employee education, diversity, employee recognition, and retention. The employees then fill out an extensive survey, and winners are selected based on independent research on key measures in those various categories.

So what makes CFCU stand out among our peers? We try to create a culture of team work and fun! Here are a few of the perks our team members receive:
  • Massage days 
  • Volunteer days off with pay 
  • Longevity program with rewards
  • Community involvement opportunities
  • Employee referral reward program 
  • College scholarships for team members and their children 
  • Tuition reimbursement 
  • Generous vacation time and 401k match 
  • Paid day off during birthday month 
  • Car detailing service days 
  • Fun activities/competitions throughout the year 
Community Financial team members use their
Volunteer Day with Pay at Forgotten Harvest
“Working for an organization that values the community and helping people makes me so proud! My colleagues and I were able to use our Volunteer Day Off with Pay to work at Forgotten Harvest. They are a group dedicated to relieving hunger in metro-Detroit and preventing nutritious food waste. They provide food for emergency food pantries, soup kitchens, homeless and domestic shelters, children’s homes, senior centers and group homes,” said Mary Kerwin, Education Coordinator at Community Financial.

“Being encouraged and offered the opportunity by Community Financial to assist those in need has had such a positive impact on our entire organization and culture.”

The credit union also conducts ongoing training and leadership development programs to maintain a talented and dedicated team. Team members and their families are provided with the resources they need to protect and enhance their financial security and to balance the priorities of work and personal life.

The 2017 award competition included 1,000 nominations and more than 400 applications. At Community Financial we recognize our employees as our greatest assets, and we are proud that they have chosen us once again as the “Best and Brightest.”

Tuesday, August 15, 2017

Adjustable or Fixed-Rate Mortgage: Which is Right for Me?

If you’re mortgage shopping, you may be overwhelmed by the number of options. Dozens of lenders, each with their own rates, terms, conditions and costs, can make the decision feel that way. But it doesn’t have to be that difficult! The choice of which mortgage to go with starts with a simple question: fixed-rate or adjustable? There are many different terms, points and rates associated with each, but narrowing your search to a category can really simplify the process.

Adjustable Rate Mortgages (ARMs) have a segment of time during which the interest rate is fixed. After that, the rate is determined by an economic indicator. If you’ve seen the notation “ARM 5/1,” that means it is an adjustable rate mortgage with a set rate for the first five years of the loan, and then a new rate every year after that. There’s more to it than that, but this basic explanation will get us started.

If you’re planning on selling the property before the initial period is over, the ARM can save you significantly on loan costs. If you intend to “flip” the house, or if your career involves frequent relocation, an ARM could be ideal for you. In this case, the gamble you’re making is less about the performance of an index and more about the performance of your area’s housing market. If demand drops, you could wind up holding on to an expensive mortgage or selling the house at a loss.

So, which is the right one for you? The answer really depends on several factors.

How long do you plan to own your home? 
One thing you’ll notice right away when shopping for mortgages is that ARMs have lower interest rates, sometimes by as much as 0.50%. On a $200,000 mortgage, that saves you as much as $70 a month! The initial rates are lower because the lender is taking on less risk. With a traditional mortgage, if rates go up, the lender is stuck with a lower return. With the ARM, you’re agreeing to pay more as the lending market offers more.

That doesn’t matter as much if you’re not planning on owning your home five years from now. If you’re in a line of work that moves you from place to place every few years, taking the monthly savings on an ARM and sticking it in your 401(k) is a good move. If you intend to buy the house, make some improvements and resell it for a profit, the ARM will lower your costs while you’re living there. There’s still risk involved in the ARM even if you plan to sell the house. If demand drops in your neighborhood, you may have trouble finding a buyer. In that case, you’re stuck with the loan and a likely increasing interest rate. If you can find a buyer, but not for the price you paid for the house, the difference between the sale price and what you owe will follow you around, draining your monthly income until you finally get it paid off.

On the other hand, if you’re in your house for the long haul, the savings are likely to get wiped out once the adjustment period starts. Interest rates are at historic lows right now, and will likely increase in the next five years. The half-point savings in interest rates will seem trivial compared to the several-point increase you’ll face after the initial period.

How much can you afford to put down?
An ARM can be easier to qualify for and provides you with an interest rate that you might not get without a 20% down payment. If you don’t have enough cash on hand to make a large down payment, an ARM might give you some time to build equity. Refinancing your mortgage after the initial period is over can put you in a better position. You can use the equity you have in your home, plus whatever you’ve saved during that time, to put more money down and get a better fixed-rate mortgage.

Of course, this strategy is not without risk either. If the value of your home decreases, you may have a difficult time refinancing for the balance of the loan after the initial term. This would leave you stuck paying the higher interest rates of the ARM. If you can’t make the payments, you still lose your house, regardless of the equity you’ve established.

What’s your risk tolerance?
At the core of the choice between fixed-rate and adjustable-rate mortgages, is a quick and dirty shortcut. Fixed-rate mortgages are the safer, more conservative choice. Adjustable-rate mortgages are the riskier alternative, but offer the possibility of savings.

If you have the room in your budget to accommodate a potentially fluctuating mortgage payment and enough security in your work, savings and other financial priorities, an ARM does offer the potential to lower your monthly payment. If you’re confident that the value of your home will increase faster than interest rates, an ARM might be a wise investment. 

If you’d rather have the security of a fixed-rate mortgage, there’s quite a bit to be said for that. If you’ve found the house you want to raise a family in, the stability of a fixed-rate mortgage may be desirable. If you’re trying to find the simplest path to homeownership, you may find the simplicity of the fixed-rate mortgage very appealing. It might be easier to be financially aggressive in other aspects of your life, and not put the place where you live at risk.

Fixed-rate and adjustable-rate mortgages each have their advantages and disadvantages. Community Financial Credit Union can help figure out which one is right for you! Speak with a local mortgage specialist today by calling (877) 937-2328 or visiting a branch near you.

Tuesday, August 8, 2017

Save Money While Vacationing Abroad

Exploring foreign shores and dining on exotic fare are what make up many dream vacations. But when you suspect a money changer has taken you for a ride or you’ve busted your budget after only two days, it can quickly become a nightmare. Here’s how to get the most for your money while vacationing overseas:

1.) Use credit cards 
Using credit cards while abroad will help you avoid the hassle and uncertainty of exchanging money. Before you board your flight, determine whether your card has a foreign transaction fee so you’ll understand the cost of using your card. Also, make sure your credit card company knows about your travels so they won’t flag purchases as fraud. Lastly, if you don’t have a chip-enabled card, carry your passport with you, as many European countries don’t accept magnetic-strip cards without identification.

2.) Know the local currency exchange rate 
While primarily using credit cards will minimize the hassle of exchanging currency, you will need some cash. That’s why it is good to know the current exchange rate before you set foot on foreign soil. You can access this information by downloading an exchange app like XE Currency or My Currency Converter. Also, always ask for the price in local currency so vendors don’t take advantage of your naivety by hiking up the price in American dollars just for you.

3.) Dining on a budget 
You haven’t experienced a city without trying the local eats, but you don’t have to blow your budget on pricey restaurants. Instead, get creative! Pick up some supplies at a local grocery, delighting in the strange food items on the shelves. Enjoy a light lunch at a street cafe for half the price of a dimly-lit restaurant. Or, make the rounds of the sidewalk vendors for a meal that will satisfy your craving for exotic cuisine without draining your wallet.

4.) Screen your car rental
 Before you book a car, ask yourself it it’s really necessary. If it is, search through discount booking sites like Priceline.com and Kayak.com. Next, find out if your auto insurance provider covers accidents while overseas. Lastly, review local traffic laws to make sure you drive safely and legally!

5.) Use cheap transportation 
If you aren’t booking a car, you’ll save even more by using the cheapest transportation available. Get the real feel of the city by walking to your destination. Hop on a bus or board a train to rub shoulders with the locals. And, be sure to check for any traveler’s discounts before purchasing tickets, as many hot-spots for tourists offer great deals for vacationers.

6.) Steer clear of the ‘only here’ mindset 
Don’t wind up broke! Create a detailed itinerary and a reasonable budget that includes all the things you want to do. Then, narrow it to just the attractions that are truly unique to your destination.

Working on putting together the funds for your dream getaway? Call, visit cfcu.org, or stop by a Community Financial branch today and ask how we can help. We’re here to turn that dream vacation into reality!

Your Turn: Just got back from a vacation abroad? Share your best money-saving tips with us in the comments!

Tuesday, August 1, 2017

Creative Ways to Save On Energy Costs

Are your summertime electricity bills astronomical? Check out our list of 10 creative ways to trim your bill in the summer and all year ’round!

1.) Plant trees 
If your home has lots of west-facing windows, you’re likely getting loads of sunlight each afternoon, and that’s making your AC unit work harder. Lower your energy consumption by planting trees or large shrubs in front of some of those windows.

2.) Go solar 
If you can’t afford to buy solar panels, consider leasing them instead. You’ll be given a set monthly fee which makes budgeting easier year-round. Also, the monthly payment is often 15% less than the local utility rate.

3.) Rethink your roof 
Is your roof dressed in black for 90-degree weather? By installing a sunlight-reflecting “cool roof,” you can reduce your roof’s temperature by up to 60 degrees. This will trim your AC use by as much as 20%.

4.) Keep your cool 
Large, heat-generating appliances can warm up a room quickly. Consider running your washing machine and dishwasher at night or in the early morning when it’s cooler outside.

5.) Lighten up 
Replace your light bulbs! By swapping out just five incandescent light bulbs in a high-traffic area of your home to CFL or LED bulbs, you can save $65 on annual energy costs.

6.) Seal all leaks 
If your home isn’t a new build, you likely have leaking windows and doors or shrinking caulking. Structural walls of houses also tend to shift with time. To check for leaks, run the match test. Shut down your AC unit and close all doors and windows. Hold a lit match near the windows and exterior doors of your home. If the flame moves, that will indicate an airflow, which means a leaky seal.

If you’ve got leaks, reseal your windows by weatherstripping the problem areas. A leaky door may need a door sweep replacement. Just peel off the old one and bring it to a home improvement shop so they can help you find a new one that fits your door.

7.) Get smart! 
By installing a smart thermostat, your home will be programmed to cool off at exactly the times you need.

8.) Pull out the plug 
Up to 75% of energy consumption by home electronics happens when they’re turned off. Save big by pulling out the plugs when you’re done with your electronics.

9.) Fire up the grill 
An oven cranked up to the standard 350° makes your AC unit work harder. Use your grill for dinner prep. You’ll keep the heat out and enjoy the sunshine at the same time!

10.) Laundry smarts 
About 90% of the energy used when doing laundry comes from heating the water. When possible, choose the cold setting on your washing machine. Hanging your clothes to dry will also trim your bill. If you must use the dryer, stick some tennis balls in there to make it more efficient and finish faster.

Your Turn: Do you have an energy saving hack that keeps your electric bill manageable? Share it with us in the comments section below!

Wednesday, July 26, 2017

Summer of Sharing Donation Helps Bring Horses to Kids with Cancer

Community Financial’s 7th annual Summer of Sharing campaign is well under way and thousands of dollars have already been donated to local charitable organizations throughout Michigan. Recipients are chosen based on nominations submitted at SummerofSharing.org. The campaign asks the community to consider the question, “What GOOD could you do with $1,000?”

One of the recipients for the 2017 campaign was Camp Casey. Camp Casey is a 501(c)(3) nonprofit horseback riding program for children with cancer and rare blood disorders. Through generous donations and compassionate volunteers, Camp Casey helps spread the healing power of horses to Michigan families.

Camp Casey provides free house visits, known as Horsey House Calls, to children with cancer and their families. These Horsey House Calls enable families to horse around in their own backyards! The visits are normally kept as a surprise for the children and the Camp Casey team brings a horse, an arts-and-craft project, and food for a camp-like home visit and fun afternoon!

The $1,000 Summer of Sharing donation from Community Financial will provide one Horsey House Call for a child with cancer and his/her family and friends. An Equine Therapist will be accompanied by 6 volunteers to give a child and up to 10 friends a day they'll never forget.

“First and foremost, a giant thanks to everyone at CFCU for continuing to support our grassroots nonprofit,” said Molly Reeser, Founder/Executive Director of Camp Casey. “With your donation, Camp Casey will be able to bring a ‘camp experience’ to the home of a child who is too sick to enjoy summer camp.”

To learn more about Camp Casey and the work they do across Michigan visit www.camp-casey.org

The Summer of Sharing campaign runs through September 1. This year Community Financial is donating $60,000 to the community.

You are invited to visit SummerOfSharing.org to learn more about how you can share your story and nominate a charity, community group, or school program that deserves a $1,000 donation. Don’t miss out on this opportunity to make a difference in your community!

Wednesday, July 19, 2017

5 Benefits of Using Credit Cards vs. Cash

Does anyone pay with cash anymore? According to Bankrate.com, nearly one in 10 Americans no longer carry cash with them on a regular basis. While paying with cash can help people avoid the temptation of accumulating debt, there are also some major advantages to ditching it and using credit cards on a regular basis.

Convenience 
There is no doubt about it that paying with credit cards is convenient. The convenience of being able to swipe your credit card instead of running to the ATM or having to count out the exact amount is pretty obvious. Credit cards can also help streamline your budgeting process since you’ll have a detailed list of everything you’ve spent money on throughout the month.

Security
When it comes to protecting your money, the advantages of using credit cards compared to cash are numerous. Most credit cards these days have built-in security features like EMV chip technology to help prevent phishing of your card info. If someone fraudulently uses your card, call the number on your statement or the back of your card immediately. In most cases, you won’t be held responsible for any charges if your card or account number has been stolen. For example, Community Financial’s credit cards are backed by MasterCard®’s Zero Liability Program.

With a Community Financial MasterCard, you can also sign up for Quick Launch Text Alerts to receive a text or email when your card is used. Learn more at cfcu.org/cardinfo.

Credit History 
One of the main advantages of using a credit card is that it can positively impact your credit score when you use it responsibly. Regular use and prompt full payment of your balance is one of the better ways to build a solid credit history. This also lets creditors know that you can be trusted to lend to. Not using credit can dramatically hurt your credit score. If you don’t have a history and don’t use credit on a regular basis, your credit score may be pretty low.

Options 
World traveler? There’s a card for you. Willing to ditch the rewards in favor of a lower interest rate? There’s a card for that too. Community Financial now offers 4 different MasterCard options, including fixed-rate cards so your payments won’t increase even if Federal interest rates do. Check out cfcu.org/cards to find the right credit card for you!

Rewards 
If you choose a reward-based card, one of the best parts of using your credit card is reaping the rewards! Since you are already spending money on everyday items like gas and groceries, why not earn rewards? Community Financial members can earn Choice Rewards on their purchases.

And now through September 6, you can earn 2X Rewards on your Platinum Rewards or World MasterCard when you make back-to-school purchases! *

So while some still might prefer paying with cash, there are plenty of reasons to ditch it and take out the plastic. What do you think? Are we headed towards a cashless society?


*Cash advances and balance transfers do not earn Choice Rewards. Points awarded on net purchases; qualified transactions must post to your account by September 6, 2017.

Tuesday, July 11, 2017

6 Ways to Save On Your Summer Vacation

The open road is calling and your dream vacation awaits! But first, you need to work out the financial details. How are you going to pay for your getaway? Ideally, a plump vacation fund is the way to go. Unfortunately, though, many of us don’t think about how we’re going to pay for vacation until it’s a few weeks away.

Be proactive in planning your vacation by saving up for it in advance. Forgo some luxuries in the months or weeks leading up to your vacation and put the extra cash aside for your getaway. When you’ve got the money saved up, create a realistic vacation budget. These six vacation saving tips will help you plan a perfect getaway without busting your budget.

1.) Timing is everything 
There is an ideal window for buying everything, and booking airline flights is no exception. Flight prices generally fluctuate until departure day, but experts say the sweet spot is 54 days before your travel date.

2.) Clear your cache 
Hotel and airline sites use cookies to determine what you’re shopping for – and then raise their prices accordingly. Beat the system by clearing your cache before every new search so they can’t access your browser history.

3.) Sweet-talk your way to savings 
Ask for an upgrade at check-in. About 78% of hotel guests who request an upgrade at the front desk actually receive one. Also, by 6 p.m., most hotels know which rooms will be filled for the night. If you check in later in the day, you’ll have a better chance at getting the room with the incredible view – for an economy-class price.

4.) Never pay full price 
Check sites like coupondivas.com, entertainment.com, and Groupon.com for deep discounts at local eateries and entertainment centers. You can also find cheaper tickets to nearby amusement parks by looking for sellers on Craigslist.

5.) Freebie fun 
Challenge yourself to enjoy one day of your vacation without spending any money. Search local sites and blogs for write-ups about free things to do. You might find a charming farm, a fun splash pad for the kids or a scenic hiking trail. Don’t eat out on this day either. Many hotels include a continental breakfast – so take full advantage. For lunch, make a picnic on sandwiches. Dinner can be something effortless that you brought from home, like hot dogs cooked on a travel grill or omelettes fried in a sandwich-maker.

6.) Save your mega event for the last day 
End your vacation on a sweet note by saving your most exciting event for your last day away. If you’re unsure of how you’re going to fund your getaway, call or stop by Community Financial to ask about taking out a personal loan or open a savings account. We’re here to make your dream vacation come true!

Your Turn: How do you save big on summer vacation? Share your best hacks with us in the comments!

Tuesday, July 4, 2017

Independence Day Celebrations, Yesterday and Today

Do you know exactly what happened on July 4, 1776? What do our Fourth of July celebrations commemorate, and why?

The Reason We Celebrate July 4 
July 4, 1776, is the date written on the original Declaration of Independence, even though it wasn’t signed until Aug. 2 of the same year. July 4 was the day in which the Continental Congress officially agreed and approved the final edits to the document that Thomas Jefferson wrote. It declared the words that would establish a new nation, independent of Great Britain’s control.

Thirteen American colonies were already at war over oppressive taxation, but residents weren’t consistent in their opinions and their efforts until the words of the Declaration united them and gave them a foundation for the Revolutionary War victory in 1783. Because the Declaration was also understood to be the first formal statement by any group of people asserting a right to choose their own form of government, it was a significant document for all citizens of the world, not only for the colonists.

Although it was called Independence Day as early as 1791, the Declaration of Independence wasn’t always celebrated on July 4 with a vacation from work and fancy fireworks. In fact, the United States Congress didn’t make it a holiday for federal employees until 1870, nor did lawmakers pass additional legislation to make July 4 a paid federal holiday until 1938.

During the Revolutionary War, July 4 was commemorated with 13-gun salutes (representing the 13 colonies), official banquets for the Continental Congress and their families, and parades and shows for the troops. Ships at sea were draped with red, white and blue while in port and at sail, and General George Washington reportedly ordered a double ration of rum for his fighting men to celebrate.

One of the signers of the Declaration of Independence was John Adams, who wrote the following in a letter to his wife, Abigail: “It ought to be solemnized with Pomp and Parade, with Shews, Games, Sports, Guns, Bells, Bonfires and Illuminations from one End of this Continent to the other from this Time forward forever more.”

Celebrating July 4 at Home 
Today, we certainly have our modern pomp and parade, shows, games, sports, guns, bells and bonfires to celebrate July 4. But we also have jet fighter salutes at airshows and choreographed fountains and fireworks exploding over lakes, rivers, and harbors throughout the country. John Adams probably could never have imagined the majestic displays we take for granted now.

Whether you are enjoying a road trip with your family or staying home to barbecue by the pool, have a fun and safe holiday!

Your Turn: How are you celebrating July 4th this year?

Tuesday, June 27, 2017

Newlyweds: Don’t Let Financial Stress Take the Cake

Of all the things to discuss before marriage, finances are the least exciting. Statistically, money is the top reason couples argue and financial arguments are among the top predictors of divorce. So, how can you avoid becoming a statistic? Here are some ideas from the experts:

Talk to Each Other 
A 2013 poll by the National Foundation for Credit Counseling found 68% of engaged couples have negative attitudes about discussing money. To 45%, it’s “necessary but awkward,” and 7% say it’s “likely to lead to a fight.” 5% predict it would call off the wedding. The result? Couples don’t talk finances. A Fidelity survey found that over one-third don’t know their partner’s salary, of which 72% think they communicate “very well” about finances.

It’s not surprising: What’s romantic about debt, budgets or taxes? Nobody can ensure newlywed happiness, but experts agree: Don’t wait. Discuss taxes now. If you’re both employed, the “marriage penalty” may cost you more; consider marrying in January. But if one spouse earns the majority, you’ll enjoy a “marriage bonus” and a December wedding might be wise. Whether you talk money weekly or monthly, agree on a system and stay open to change.

Get Started 
Start easy: “What’s your first money memory?” “How did you spend your allowance?” Then, go further with these questions:
  • “Are you a spender or saver?” – If one saves and one spends, create a budget considering both styles. Studies show that men and women spend differently. Women tackle daily expenses (groceries, utilities, clothes); men make larger purchases (TVs, cars, computers). Amounts might be equal, but perceptions differ. About 36% of partners don’t discuss big purchases; that’s a recipe for disaster. 
  • “Are you in debt?” – Your spouse’s debt doesn’t become yours, but it affects your choices. Heavy credit card debt complicates home buying. Make reducing debt a priority. A TD Ameritrade survey found 38% of partners unaware of the other’s debts. 
  • “What are your financial goals?” “Where do you want to be in five or 20 years?” – Goal-oriented people progress toward savings and investing targets faster. Decide on the targets: buying a home, starting a family, being debt-free. List your goals, then share and plan together. 
Know what’s important to each other: things or experiences? Saving for a house or for retirement? Clarify these values early on in the marriage.

Trust Each Other 
Be honest with your partner. If you made a foolish purchase, own up to it. Some 40% of partners have lied about the price of a purchase. Lying about money has huge repercussions. Support one another; finger-pointing or retreating won’t help. Instead, work together on a plan.

You’re Still Individuals 
Celebrate differences. Your bargain-hunter should do the spending while you invest the savings. Choose a monthly amount each can spend, no questions asked. Money claims the average is $150.

A joint bank account has pros and cons. SmartMoney found 64% of couples put all their money in joint accounts; 14% kept everything separate. Many newlyweds choose both: yours, mine, and ours. Calculate shared living expenses and then contribute your portion of those costs. The key is to take action now to ensure money won’t prevent your wedded bliss.

Tuesday, June 20, 2017

Kick Off A Safe And Healthy Summer

Since June 21 is the official start of summer, meaning outdoor time, swimming, picnics and travel, here are some tips to keep your family happy and healthy.

Not Looking Forward To Swimsuit Season? 
If you want to lose weight, says Lisa Lillien of the Hungry Girl website, don’t use crash diets, just make healthy choices. Spend weekend time prepping proteins and veggies. Then for a hot dinner, just throw the ingredients together. Have smart snacks around: jerky, protein bars, nuts, fruit. Eating more often seems counter intuitive, but prevents overeating at mealtime. More about food: At picnics, keep mayonnaise salads cool. Enjoy them straight from the refrigerator; don’t let them sit more than 15 minutes in the sun.

Water Inside 
Proper hydration is important, especially in hotter weather. Drinking enough water improves body function and keeps you from feeling unnecessarily hungry. Eight 8-ounce glasses of water daily will maintain moisture balance, but if you’re a caffeine drinker, triple that. Bonus: Staying hydrated gives skin that healthy glow.

Water Outside 
Remember being told, “You’ll drown if you go into the water right after eating”? That’s too strong, but Sue Leahy, president of the American Safety and Health Institute, says during digestion, “There’s less blood flow in your body and this takes away from strength. So if you really had to use your strength for undertow, you might have a problem.” Best to wait half an hour after you eat. Children pose different problems. The National Safety Council says more than one in five drowning victims are 14 or under. Find age-appropriate swim lessons for your child, and don’t rely on lifeguards; never leave your child unattended.

Be Good to Your Skin 
Just one blistering sunburn doubles your risk of melanoma. You have to apply the right kind of sunscreen (SPF 15 or higher), frequently (every two hours), and enough: a teaspoon for the face, and about a shot glassful for the body. If you forgot, apply cooling botanicals generously at the first sight of a pink glow to reduce peeling and inflammation.

Be Good To Your Eyes 
To help prevent cataracts, as well as wrinkles, wear sunglasses that block at least 99% of ultraviolet A and B.

Watch For Heat Stroke 
This is a big problem for outdoor workers and older people in apartments without air conditioning, but can happen to anyone. “The first sign is cramping in the legs,” says Sue Leahy. “Cool off and drink fluids until it goes away. Cramping – especially in the leg – is a sign the body is losing salt and electrolytes, and you should heed it.”

Get Debugged 
Bugs can transmit Lyme disease, West Nile, Zika, and other illnesses. The American Academy of Pediatrics and the Centers for Disease Control and Prevention recommend insect repellents containing DEET (10% to 30%), except on children under 2 months.

Move It But Don’t Lose It 
If your children travel by bicycle, skateboard or scooter, they need helmets that meet CPSC safety standards. Never let children ride near moving traffic. Don’t allow children too young to have a driver’s license on riding lawnmowers or off-road vehicles. Children are involved in 30% of ATV-related deaths and ER injuries.

Fireworks 
The Fourth of July is a big summer event,and emergency rooms brace for the injuries. Fireworks can cause severe burns, blindness, scars or worse – even sparklers can reach over 1000 degrees and can start fires. The National Safety Council says that in 2010, fireworks caused about 15,500 reported fires, including 1,100 structure fires. Families should attend professional community fireworks displays rather than using fireworks at home.

Your Turn: What’s most important to you about summertime safety? Have you had any close calls? Tell us what you do to keep the family happy and healthy in the hotter months.

Tuesday, June 13, 2017

Buying a Home in Today's Economy

The only thing certain about today’s economy is that it is uncertain. While things look relatively stable now, no one can guarantee what the next few years will bring. Fortunately, you don’t have to give up on the home of your dreams because of a fluctuating economy. Here are four steps you can take to make sure your money – and your house – are safe regardless of the state of the economy.

1) Maximize your down payment 
The magic number for down payments has been established at 20% of the home’s value. Often, though, new homeowners will put down a much smaller amount. If you can’t afford a down payment of at least 5% of the home’s value, you may not be ready to buy a house. Having little or no equity in a home could mean taking a loss should you need to sell it.

2) Get less than you qualify for 
It’s best to buy a house that comes in well under your approved mortgage limit. This will keep your mortgage payments from dwarfing your monthly budget. Also, if the economy worsens, you’ll have a smaller mortgage payment to scrape together each month.

3) Pick the right Realtor 
Here’s how to find the Realtor that’s best for you:
  • Speak to recent clients about their experience with this agent. 
  • Look up the licensing of your prospective agent. You can find this information online.
  • Choose a winner. A Realtor who has been recognized for their excellent work is one you want working for you. 
  • Research how long the agent has been in the industry.
  • Check the current listings under the Realtor’s name. Are they in the same price range as the house you’re hoping to buy? 

4) Look for red flags 
Aside from having a professional inspection done, check for the following yourself:
  • A sturdy roof. A flimsy roof can bring expensive repairs. If you don’t mind replacing the roof, use it as a negotiating point for a lower price. 
  • Efficient heating and cooling systems. These can be costly to fix and replace. Plus, inefficient systems can hike up your utility bills. 
  • Strong structural components. Don’t be fooled by a fresh coat of paint. Check beneath the surface for strong pipes, wiring and insulation. 
  • Overall functioning of the home. Try out everything! Open doors, turn on faucets, flick light switches, and flush toilets. If you find any major problems, rethink your decision to buy this home. Don’t mind a handful of minor repairs? Use these as a negotiating point. 
Stop by any Community Financial branch or contact one of our friendly Mortgage Specialists before you start your search. We’ll help you with the finances as you find the home of your dreams!

Tuesday, June 6, 2017

How to Use Your Graduation Presents To Build Your Financial Future

If you’re graduating from college this year, congratulations! As a college graduate you’ve survived four (or more) years of nose-to-the-grindstone studying, years of ramen noodle breakfasts and frantic, last-minute papers. Your family and friends are eager to celebrate your accomplishment, and one of the ways they know how to do that is by giving you cash.

Money you don’t have a plan for has a funny way of turning into concert tickets, electronics and other splurge items. Making a plan to use your graduation money to build your financial future can prevent you from relying on debt to cover your lifestyle startup costs. Consider making space in your graduation gifting for these must-haves.

1) A professional wardrobe 
If you have a new employer waiting for you to show up to work, chances are they won’t be as sympathetic to sweatpants and band T-shirts as your TA was. Getting two or three professional items of clothing will help you hit the ground running on day one. And if you don’t yet have an employer, buying a good “interview” outfit is a wise investment.

2) Start saving for retirement 
It’s weird to think about how your career will end before it starts, but it’s never too early. Starting a Roth IRA will keep your money growing tax-free. You’ll need to start this some time, and it’s much less daunting to add to a retirement account than to start from zero. Though early withdrawal of IRA funds should be limited for many reasons, the money is available for major purchases like your first home, or if you need it due to a medical emergency.

3) Build an emergency fund 
Right now, your financial future is very fragile. You’ve spent a lot of time and money developing your ability to work and making yourself more attractive to an employer. What would you do if you found yourself unable to work for several months? What if you needed car repairs to get to work? 

Right now, before you have to worry about a rent payment or a utility bill, is the best time to start saving for those emergencies. Stashing away a little money in a rainy day fund is one of the best ways to insure the significant investment you’ve made in yourself. You could even open a separate Community Financial savings account to accomplish this goal.

Congrats to all of the 2017 graduates! We wish you a bright financial future.

Wednesday, May 31, 2017

Summer of Sharing is Back! What GOOD Could You Do with $1,000?

Temperatures are rising and so is our community support. As we launch our 7th annual Summer of Sharing Campaign, we want to know, “What GOOD could you do with $1,000?”

This summer, Community Financial will donate $60,000 to nonprofit, educational and community organizations throughout Michigan! That's $1,000 a day every Monday – Friday from June 12, 2017 – September 1, 2017.

Community Financial will start accepting nominations on June 1. At that time, members of the community are invited to visit www.SummerOfSharing.org to submit an essay-style nomination explaining how their favorite nonprofit helps the community it serves. These essays will stay live on the site for others to learn about how the nominated organizations are making a difference.

Community Financial's Summer of Sharing program is one of the ways we help give back to the communities that support us, but we can’t do it alone. We need your input to let us know which groups are making the greatest impact. Past recipients have included animal welfare groups, school music programs, food pantries, veterans groups and many more!

President and CEO Bill Lawton is excited to keep the tradition of sharing alive in 2017.

“We are inviting the community to tell us which organizations are doing great work and deserve additional financial support,” Lawton said. “It is part of our culture to give back to our communities, and we are proud to bring the Summer of Sharing back once again.”

Throughout the next three months, Community Financial will announce the winning recipients beginning in June on www.SummerOfSharing.org. Community Financial has donated over $365,000 through its Summer of Sharing program since 2011.

Tuesday, May 23, 2017

The Pros and Cons of Bridge Loans

Buying your next home is nothing like buying your first. This time around, you're coming to the table with the experience of being a homeowner. You know what to expect throughout the buying process, you know what to look for in a home, and you know what you can afford. After all, experience is truly the best teacher.

Another major difference this time around is that you're likely counting on proceeds from the sale of your first home to help cover the down payment and the closing costs of your new home. But what happens if selling that home is taking a bit longer than you'd anticipated? What if you need to move immediately because of a job opportunity, or because there's a great home on the market that will be snatched up if you don't grab it quickly? How are you going to come up with the funds if your own home isn't selling quickly?

This is where bridge loans come in. A bridge loan provides temporary financing until more permanent financing can be obtained. When taking out a bridge loan, it’s understood that once permanent financing is in place, some of those funds will be used to pay back the bridge loan. Bridge loans are most commonly used to help the borrower span the gap between the sale of one home and the purchase of another.

Terms vary tremendously, so take the time to talk with your loan officer. Some will completely pay up the outstanding mortgage on the old home, while others just pull out equity, leaving the borrower with two mortgages, or simply lumping the loans together.

Bridge loans understandably have shorter terms than other loans, and are typically more expensive as well. Also, a lender will usually only extend a bridge loan if the borrower agrees to finance their new home's mortgage through the same institution.

Bridge loans seem to provide the ideal solution to a less-than-ideal situation: You can now house-hunt freely and without waiting for your current home to sell. However, bridge loans are not as simple as they may seem. Let's take a look at some of the pros and cons of taking out a bridge loan.


Pros 

1.) Freedom to house-hunt 
The most obvious benefit of taking out a bridge loan is also the most significant. With this financing in place, you'll be free to buy the home of your choice, without being bound by the sale of your previous home.

2.) Short lending term 
Another big benefit of bridge loans is their short lifespan. In most cases, low interest only payments are required. The interest accrues for as long as you have the loan and is added to the payoff when you sell your home. This, in turn, can give rise to further financial challenges as the borrower is hit with various penalties and fees, or is forced to take out another loan. The short payback term of bridge loans assures that this loan will not be a source of financial stress for years to come.


Cons 

1.) Total debt increases 
Any loan a buyer takes out will cause their total debt to climb. Sometimes, a bridge loan will split the purchase of the second home into two mortgages, leaving a buyer with three monthly mortgage payments; one from their previous home, and two from their new one. Other times, the buyer will be left with two mortgages to pay, which can also be a strain on their budget. In either case, an increase in debt means an increase in monthly financial obligations.

2.) High interest rates and fees 
 To compensate for their short lifespans and the amount of work the lender has to do for them, bridge loans generally have higher interest rates, than an equity or mortgage loan. There are also various fees involved, such as closing costs, origination fees and more. 

3.) Risky contingency 
Bridge loans are usually taken out with the understanding that the sale of your existing home will allow you to repay the loan. But what if your house doesn't sell before the loan is due? This can happen even if you have an interested buyer – they may not get the financing they need or they may back out. This will leave you with another monthly mortgage payment to pay.

It's important to speak to a Realtor about market conditions before taking out a bridge loan, even if you think you have a buyer. Make sure the odds are in your favor and that it is likely your home will be sold on time before committing to a loan that is contingent on its sale.

If you really need the funds from the sale of your home before the transaction is finalized, but the thought of taking out a bridge loan makes you uneasy, you may want to consider other options. You can borrow against a 401(k) plan or take out a loan secured by stocks, bonds or other assets. And of course, don't forget to call, click, or stop by Community Financial Credit Union for guidance throughout the process of buying and selling a home.

Wednesday, May 17, 2017

Choosing an Equity Loan in a Rising Rates Environment

Q: I’ve heard that interest rates will climb soon. If that is true, how does it impact home equity lines of credit and a typical home equity loan? And what are the differences anyway?

A: It’s true that financial experts predict an interest rate hike (or multiple hikes) in 2017. There are some key differences between a home equity line of credit (HELOC) and fixed home equity loans. Here are some of the things you’ll want to know:


HELOCs 

How they work:  
A HELOC is a revolving credit line that allows you to borrow money as needed, with your home serving as collateral for the loan. You can spend the funds however you’d choose, though some lenders have restrictions on the amounts and ways you can borrow.

1.) Pros
HELOCs allow for financial flexibility. You can borrow money as needed over an amount of time known as the “draw period.” This is especially beneficial if you don’t know exactly when or how much money you’ll need. Repayment options vary, but are also usually very flexible. When the draw period ends, some lenders will allow you to renew the credit line, and others might allow you to make payments over another set period of time.

Monthly payments also vary. Some only require monthly interest payments and then collect the entire principal at the end of the draw period. Others base the payment on a portion of the amount owed plus interest. This is an important question to ask as you research your options.

2.) Cons 
HELOCs have variable interest rates – the interest you’re paying on the loan fluctuates over the loan’s term. Taking out a HELOC in an environment of rising interest rates means your rates are likely to increase over the life of the loan.

HELOCs that require repayment of principal only at the end of the term can also prove to be difficult for borrowers. If you can’t pay the large amount, you may be forced to refinance with another lender, possibly at an unfavorable interest rate.


Home Equity Loans 

How they work: 
A fixed rate closed end home equity loan, also secured by your home’s equity, allows you to borrow a fixed amount in one lump sum. Most home equity loans have a fixed term and a fixed monthly payment.

1.) Pros 
Home equity loans have fixed interest rates – the borrower knows exactly what their monthly payment will be for the life of the loan. In an environment of rising rates, this is especially beneficial; the loan won’t be subject to increasing rates. Every monthly payment on your loan is made up of both principal and interest. You will pay back the entire loan, in manageable amounts, until the loan term is over.

2.) Cons 
Receiving all the funds at once may be problematic if you find you someday need more than the amount borrowed. Also, the monthly payments may be higher.

Both options may have fees or prepayment penalties attached, so be sure to ask questions about these when doing your research. Ready to start? Our knowledgeable representatives can help you decide if a home equity loan or HELOC is right for you. Give us a call at (877) 937-2328 or visit www.cfcu.org/HELOC for more info!

Wednesday, May 10, 2017

Money Smart Vacation Ideas in Michigan

Looking to get away this summer, but don’t want to break the bank? There are plenty of activities and places to visit right in your home state. Here are just a few ideas to get you inspired for this summer.

Beach Day 
Michigan has dozens of splendid beaches where you can swim, build a sandcastle, and explore! Check out Michigan.org/summer to see which ones have free public access. "Parents" magazine named Silver Beach one of the top 10 family beaches in the United States for its clean, wide beach; swimming; children's playground; and other activities. Michigan state parks also have hundreds of mini-cabins, rustic cabins, camper cabins and even yurts, $45-$80. Many are in prime locations on Lake Superior or in Lake Michigan beach parks.

Must See Museums
Looking for something educational and fun to do? Why not visit one of Michigan’s famous museums and maybe even venture back in time? The Henry Ford Museum, Greenfield Village and Ford Rouge Factory Tour in Dearborn all provide activities for the whole family to enjoy. Sign up for Model-T rides, watch artists as they work with glass, clay or tin, or take the only Detroit automotive plant tour available to the public. Michigan is also home to some fantastic art museums like the Detroit Institute of Arts and the Grand Rapids Art Museum. With low cost admission, both options provide a great way to get out and explore your creative side!

Prepare for Takeoff 
The Air Zoo of Kalamazoo was voted the "Best Place to Spend a Day with Your Family" by the "Kalamazoo Gazette" for good reason. Kids of all ages can enjoy amusement park rides, experience a historic mission in the 4-D theater, navigate a World War II fighter over the South Pacific in full-motion flight simulators and view 50 historic aircraft. Entrance fees are inexpensive, and several local hotels often partner with the Air Zoo to provide package deals. Kids with an interest in airplanes might also like the free viewing park at Gerald Ford International Airport. The airport viewing park provides entertainment for aviation buffs and families, and the park-like space is furnished with picnic tables and litter barrels for picnickers.

Fun on the Farm 
Visit your local farmers market to sample area products and stock up on fresh goods. It’s a great way to support local farmers and also learn about other local businesses in your area. Another inexpensive idea is to visit a local farm or petting zoo. Visit Michigan.org for a complete list to take the kids to. And if you really want to experience farm life and have a little extra in your budget, take a farming class or consider a stay at Hillside Homestead in Sutton Bay. Experience what life was really like living on a farm in 1910!

Road Trip 
Lastly, what better way to experience Michigan than by taking a road trip? With gas prices relatively low now is a great time to adventure around the state. The Great Lakes Circle Tour is a scenic route across Michigan that showcases the most beautiful vistas in the Mitten State. Travel around the great lakes, visit lighthouses, and explore campgrounds along the way!

Have any inexpensive Michigan vacation ideas of your own? Share them in the comments section below!

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