Add Credit Life and Disability To Your Loans

Posted by SIU Credit Union on Nov 5th, 2009 | View Comments

Every member has needs and they are unique in every circumstance.  SIUCU is now offering loan protection to all of our members to give you the peace of mind you deserve.  You will be offered the product of Credit Life and Disability when applying for a loan.  Both members and their families will benefit through their loans being paid off in case of death or disability.

Members who are out of work because of disability may find themselves waiting even longer for the Social Security safety net to catch them.

In 2007, the Social Security Administration experienced a record breaking backlog of disability claims.  The average waiting period to get a hearing has reached 17 months. Having the extra protection on your loan will ease the stress during this difficult time.

Many U.S. households say they need more life insurance.  The average amount of life insurance you need is three to six times your annual income.

Your life insurance needs to:

Replace your income

Pay off your mortgage

Cover daily living expenses (food, utilities, transportation, child care)

Pay for college education for your children

Cover retirement for your spouse

Pay for funeral expenses

Pay off loans

By adding Credit Life and Disability insurance to your loan, you will have the piece of mind knowing that your obligations will be taken care of when you need it most. Stop by any branch location. We’ll be happy to discuss how Credit Life and Disability can benefit you.  For more information on insurance products offered thought CUNA Mutual Group, visit http://www.siucu.org/resources/index.htm#insurance

–Kim Babington, Vice President of Operations

Fraud Alerts On The Rise

Posted by SIU Credit Union on Nov 2nd, 2009 | View Comments

This past week saw several government warnings and alerts about financial frauds as well as several credit unions reporting other scams that could spook some accountholders. But these are no Halloween pranksters.

Keesler FCU reported that at its base in RAF Mildenhall, England, about 100 members saw fraudulent charges on their accounts this month (Stars and StripesOct. 28). All affected accountholders had visited Spain sometime this year, Michelle Foster, a loss prevention manager for Keesler told Stars and Stripes.

The losses were from Visa debit cards. Visa said it is aware of a possible security issue in Spain but said the investigation was ongoing and it couldn’t comment. Visa Europe contacted several affected banks and credit unions when the fraud was discovered.

One Keesler member reported charges of $539.16 from boutiques in Chicago suburbs. She said the only time she used her debit card while in Spain was at a mom-and-pop store near the beach.

Another credit union , Service CU, which has 15 locations in Germany and 17 in the U.S., saw less than one-half of 1% of members’ cards compromised by the breach, the newspaper said.

In another situation, the Federal Deposit Insurance Corp. (FDIC) Thursday issued an alert warning financial institutions of an increase in schemes to recruit individuals to receive and transmit unauthorized electronic funds transfers (EFTs) from deposit accounts to individuals overseas.

The recruitees or “money mules” are solicited on the Internet by criminals who have gained unauthorized access to the online deposit account of a business or consumer. The criminal will originate an EFT from a victim’s account to a money mule’s deposit account. The money mule is told to quickly withdraw the funds and wire them overseas after deducting a “commission” of 8% to 10%.

The schemes often occur in the context of online job posting websites, advance fee scams, mystery shopping jobs, and social networking sites. Some hesitant money mules have been threatened by their criminal “employers” if they don’t make the transactions quickly and secretly, said the FDIC. The personal identifiable information provided by the money mule may be used later to commit identity theft or account takeover.

SIU Credit Union has systems in place to monitor for fraudulent activity. But if you suspect you account has been compromised, contact us immediately. For more information on how to protect your accounts, visit our fraud prevention page.

–CUNA News Now

Why Credit Unions Aren’t Banks

Posted by SIU Credit Union on Oct 28th, 2009 | View Comments

When we are out and about in the community, we often hear two things. What’s a credit union? and I didn’t know I could join. To be clear, if you are living in Southern Illinois you are more than likely eligible to join SIU Credit Union. And no, you don’t have to been connected to Southern Illinois University to join the credit union.

But when you explain what a credit union is, it’s almost guarneteed to be followed with … so you’re a bank. Um, no. Here’s the difference.

Banks and credit unions may offer similar products and services. But the similarities stop there. Crucial differences exist–in ownership, in cost of borrowing money, and in use of services.

* You own your credit union. Credit unions are member-owned nonprofit financial cooperatives dedicated to improving members’ lives. More than 90 million members own 7,905 U.S. credit unions with combined assets of $869 billion. Stockholders own banks. Banks make money for stockholders, not for customers.

Credit unions are the only democratically controlled financial institutions in the United States. You and other members elect a volunteer board of directors to oversee the credit union. The manager or reports to this board. Bank directors, however, are paid and legally bound to make decisions that benefit stockholders, not customers.

* Credit unions have the best rates. Credit unions price loans, pay interest on funds you’ve deposited, and charge fees to provide you with high-quality, low-cost services. Banks price products and services to make a profit.

Credit union loan rates also are better. Money market, savings, and interest checking accounts carry higher rates–giving back more to members. Interest rates on credit cards and auto loans average one to one-half percentage points lower than bank rates. Credit unions make consumer loans and some member business loans. Banks offer consumer loans, but really emphasize business loans.

Because you’re an owner of SIU Credit Union you have a say in how we do business. Let us know how you think we’re doing, and what services you want at your credit union.

Selecting a Credit Card

Posted by SIU Credit Union on Oct 20th, 2009 | View Comments

Having a credit card is much easier and safer than carrying large amounts of cash with you.  But are the credit cards in your wallet really offering you the best deal?

To find out, start by asking yourself how you use your credit card(s). If you pay your balance in full every month, interest rate isn’t an important consideration. Instead, look for a card with no/low fees and a 20 to 30 day grace period. However if you’re among the other 82%of college students that already have a balance, be sure to do your homework and shop credit card rates.

The good news is that often you can transfer your existing balance from a high interest rate card to your credit union low rate credit card for little or no cost and realize instant savings.

For the Freebies

Don’t forget to also consider rewards. Some cards allow you to build points with every purchase towards free gift cards, merchandise or airline miles. Check with your credit union to see what rewards programs they offer.

Plus, Build Good Credit

Remember every time you use your credit card and then pay off the balance, you’re building yourcredit. Not sure what your credit rating is? Just contact the credit reporting bureaus. They are required by federal law to provide you with one free copy of your credit report per year upon request:

Equifax

www.equifax.com

Experian

www.experian.com

TransUnion

www.transunion.com

Your Credit Score

Posted by SIU Credit Union on Oct 16th, 2009 | View Comments

Do you know your credit score?

Your credit score matters whether you need a credit card, auto loan, mortgage or some other sort of credit.  In general, higher scores mean you are more likely to be approved and you will be charged a lower interest rate on any new credit.

 Most companies use a FICO credit score that is made up of five parts:

 Your payment history – 35%

Have you paid your credit accounts on time?  Late payments, no matter what amount, can hurt your score.

How much you owe – 30%

FICO scores look at the amounts you owe on all your credit accounts, the number of accounts with balances, and how much of your available credit you are using.  The more you owe compared to your credit limit, the lower your score will be.

Length of credit history – 15%

A longer credit history will increase your score.  However, you can get a high score with a short credit history if the rest of your credit report shows responsible credit management.

New credit – 10%

If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history.  FICO scores distinguish between a search for a single loan and the search for many new credit lines, in part by the length of time over which inquires occur.  If you need a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score.

Other factors – 10%

Several minor factors can also influence your score.  For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit – is normal for people with longer credit histories and can add slightly to their scores.

What’s a good score?

FICO scores range from 300 – 850.  The higher the score the better.  Most lenders prefer a score of 700+ as an indication of financial health. 

What’s NOT in your score?

By law, credit scores may not consider your race, color, religion, national origin, sex and marital status, and whether you receive public assistance or exercise any consumer right under the federal Equal Credit Opportunity Act or Fair Credit Reporting Act.

Should You Pay for Mortgage Points?

Posted by SIU Credit Union on Oct 9th, 2009 | View Comments

You’ve just bought your dream home and now your finalizing your mortgage.  Your lender ask if you want to purchase “points” on your mortgage and now you’re confused.  Should you or shouldn’t you?   What exactly are these points that your lender is talking about?

Mortgages come with “points” – a polite synonym for fees or premiums that your lender charges for loan origination or refinancing. The math on points is simple: one point equals 1% of the amount of the loan you take out, two points equal 2%, and so forth. While the math is easy, the real value of a point is not always so simply calculated.

There really is a point. Why would you want points? Well, when you buy a point or two along with your mortgage, you get a lower interest rate and a lower monthly payment. Pay $3,000 for a point now, and you could save that much and more later on over the course of the loan.
 

What’s the Point?

But it may seem pointless. The problem is, points don’t move when you do. Who stays in one home for 30 years these days? If you have a 30-year loan and you sell your home and move five years from now, you lose the points and the benefits that go with them. The same applies when you refinance. There’s also the interest rate aspect. Let’s say you buy two points at 6% interest when you get your mortgage. What if two years later, interest rates fall to 4%? You’ll regret your purchase.

Are There Tax Benefits?

Sometimes. Usually, points are amortized over the duration of your mortgage – that is, paid off in installment payments over the life of the loan. But you might be able to deduct the cost of these points at tax time.

If you took out your mortgage to buy or refinance your primary residence, you could qualify for a deduction in the tax year you took out the loan, if your loan meets certain conditions. The IRS has a 9-point test, and the key points are:

1. the points must be a percentage of a principal amount clearly defined on the settlement statement
2. the points can’t be paid in place of separately stated amounts elsewhere on the settlement statement
3. funds supplied by the buyer + points paid by the seller must be equal to or greater than points charged
4. points charged must not be excessive, and
5. the charging of points must be “an established business practice” for such a mortgage. If you buy a home and the seller pays any points, you can deduct those points.

If you’re refinancing, there is no quick tax break. Points have to be amortized, unless you are using part of the loan for home improvement. Then a partial deduction is allowable.

If you’d like more information on mortgages and the financial questions linked to them, speak with a qualified mortgage professional today.

This was prepared by Peter Montoya, Inc., not the named Representative or Broker/Dealer, and should not be construed as investment advice. Neither the named Representative or Broker/Dealer give tax or legal advice.

Jeff Rose is an Illinois Certified Financial Planner and co-founder of Alliance Investment Planning Group. He is also the author of Good Financial Cents, a financial planning and investment blog. You can also learn more about Jeff at his website Jeff Rose Financial.