Abbey Bowser, Author at High Point FCU

How Do I Give Myself an End-of-Year Financial Review

Q: With 2020 drawing to a close, I’d love to give myself an end-of-year financial review. Where do I begin?

A: Giving yourself an end-of-year financial review is a great way to start the new year with your finances in top shape. Here’s all you need to know about this end-of-year ritual.

Step 1: Review all your debts and create a payoff plan

List all of your debts and their interest rates. Have you made any real progress toward paying them off this year?

If your debt needs some help, you have two primary options for how to proceed:

The avalanche method. Focus on paying off the debt with the highest interest rate first. When it is paid off, continue onto the debt with the second-highest interest rate. Move through the list until you’ve paid off all debts.
The snowball method. Work your way through your debts, starting with the lowest-balance debt, and then move to the next, applying what you would have paid to the previous debt. Repeat until all are paid off.

Step 2: Automate your savings

Make savings easy by making it automatic. Give us a call at to set up an automatic monthly transfer from your checking account to your savings account. This way, you’ll never forget to put money into savings again.

Step 3: Review the progress you have (or haven’t) made on financial goals

Have you made measurable progress toward your financial goals in 2020?

Take a few minutes to review your goals, taking note of your progress and determining how you can move toward better achieving those you didn’t quite achieve.

Step 4: Review your retirement account(s) and investments

As you work through this crucial step, be sure to review the following variables:

Your employer’s matching contributions. Are you leaving money on the table?
The maximum IRA contribution limits for 2021. You will likely need to make adjustments.
Management fees and expense ratios for your investments. Fees should ideally be less than 0.1%.
Your stock/bond ratio and investing style. Do you want to make any changes?

Step 5: Set new financial goals for 2021

As you finish reviewing your financial progress for the past year, look forward to accomplishing greater financial goals in the coming year.

Set goals that are SMART:

Specific

Measurable

Attainable

Realistic

Timely

Wishing you a financially healthy New Year!

Don’t Fall Prey to a Holiday Toy Scam

Scammers famously exploit high-stress times, and the pre-holidays shopping frenzy is no exception. That’s why the BBB is warning of an uptick in holiday toy scams which can be difficult to spot.

Here’s what you need to know about these scams.

How the scam plays out

Every year, there are a few must-have toys on most kids’ wish lists. These choice picks become the hottest-selling items and are plucked off shelves in a wink. Unfortunately for anyone who didn’t shop early enough, these toys soon become impossible to find. The parents search desperately, but to no avail.

Here’s where the scammer steps in. Armed with a bogus website and some crafty online tracking, the scammer targets the vulnerable shopper with ads and online messages to draw the shopper to the scammer’s site. On the authentic-looking site, the shopper finally finds what they seek — the sought-after toy! Often, the toy is also deeply discounted. The purchase is completed within minutes.

Unfortunately, though, the scammer will send a cheap knockoff that doesn’t work or quickly breaks. When contacted for a refund, the scammer refuses to provide one or offers only to refund a small percentage of the purchase price. Sometimes, they’ll also charge an exorbitant amount of money for shipping it back to the company, almost making the small refund not worthwhile.

Red flags

Here’s how to spot these scams:

The seller has a large supply of toys that are in high demand.
The website is not secure.
The seller is offering a steep discount due to a “flash sale” or “last-minute” deal.
The seller’s website is full of spelling and/or grammatical errors.

Stay safe

Keep yourself safe when shopping online with these tips:

Research before you buy. Avoid purchasing an expensive item from a company you’ve never heard of before without doing some digging.
Look for the lock icon and the “s” after the “http” on the URL before buying anything.
Review item return policies before making a purchase.
Pay with credit for purchase protection power.
Keep your security software up to date.
Hang on to any purchase order confirmations.
Don’t trust links in unsolicited emails. Scammers will often impersonate reputable websites in order to gain access to your account information. Go to a company website directly when looking for an item.
If you believe you’ve been targeted by a holiday toy scam, end all contact with the seller immediately. Alert the BBB and let your friends know about the circulating scam as well.

Shop safely this holiday season!

When and Why to Take on Business Debt

Taking on debt, such as a loan or a line of credit, can provide a business with the cash it needs to expand or fund a new venture. Here’s what you need to know about when and why it can make sense to take on business debt:

When is it a good idea to take on business debt?

When seeking resources to help grow the business. It takes money to make money, and a small business loan can help business owners pay for an expansion when they don’t have the resources to fund it on their own. The funds can be used to broaden the company’s line of products or services, finance a move to a larger location, fund a marketing campaign or hire additional staff.

When trying to build credit. Taking out a small loan or opening a new line of credit can be a great way to build a credit profile for a business and to strengthen its relationship with financial institutions. Small loans and lines of credit can help a business prove it is responsible and trusted to repay its debts. This will open doors to larger loans that may be needed in the future.

Why is debt often a preferred source of funds?

Here’s why debt can be a preferred source of funds for a business, as opposed to selling equity in the company:

It has lower financing costs. Unlike equity, debt is limited. Once the loan is paid back, the business owner can forget it ever existed. On the flip side, selling equity in a company generally means forking over a part of the profit for as long as the business exists.

It provides tax advantages. Business debt can decrease a company’s tax liability by lowering its equity base. As an added bonus, interest on business loans and lines of credit are usually tax-deductible.

It mitigates risk. Taking on debt to access funds instead of selling equity lowers the company’s risk in the event that the business does not succeed.

If you’re ready to take out a business loan or open a new line of credit for your business, we can help! Call, click, or stop by Olean Area Federal Credit Union today to secure the funds you need to grow your business.

How to Recognize and Protect Yourself from Scams

Here at Olean Area Federal Credit Union, our biggest priority is your financial wellness. It’s important to note that the following information does not cover all types of scams or financial security threats in existence, and that these threats are constantly changing and evolving.

To help keep you safe, we’ve made this guide about how to recognize and protect yourself from scams that are common today.

Five ways to spot a scammer

1. They ask for detailed information before agreeing to process an application.

2. They insist on a specific method of payment.

3. They send a check for an inflated amount to a seller or “employee,” and then ask the victim to mail them the extra money. Of course, the original check will not clear.

4. You can’t find any information about the company the caller allegedly represents.

5. You’re pressured to act now.

Who are the targets?

Here are some of the most common targets of scams:

The unemployed. If you’re job-hunting, don’t respond to emails offering you a “dream position” you never applied to have.
The aging. Older people often spend lots of time online. They can also be less aware of the dangers lurking there.
Children. Children will more readily share information with strangers, which can then be used to steal their identity.

What do scams look like?

These are some of the most common scams:

Cyberhacking. Hackers gain remote access to your computer-and personal information.
Phishing scams. Scammers bait you into sharing personal information, which they use to hack your accounts or steal your identity.
Mystery shopper. A bogus company will “hire” you to purchase an item in a store and then report back on the experience. Before you get started, though, you’ll have to pay a hefty fee, which you’ll never see again.
Job offers. Scammers “hire” you for a position and then scam you by sending you an inflated check, as detailed above.
Sweetheart scams. A scammer pretending to be an online lover or unknown relative will con you into sending them money and gifts or sharing personal information.
Fraudulent investments. Scammers reach out to victims with information about lucrative investments that don’t exist.

10 ways to protect yourself from scams

1. Never share personal or financial information with someone you don’t know or that you didn’t initiate contact with.

2. Don’t open unsolicited emails. If you do, don’t click on any links in them.

3. Never send money to an unknown party.

4. Protect your devices by using the most current operating systems, choosing two-factor authentication and using strong, unique passwords for every account.

5. Choose the strongest privacy settings for your social media accounts.

6. Keep yourself in the know about the latest scams. You can sign up for free scam alerts from the Federal Trade Commission by clicking here.

7. Educate your kids about basic computer safety and privacy.

8. If you have elderly parents, talk to them about common scams and teach them to protect themselves.

9. If a government agency or a company calls and asks you to share personal information, tell them you’ll contact them on your own.

10. Never accept a job or pay for a purchase or service without researching the company involved.

Why Does My Credit Score Matter?

Your credit score is an indicator of your financial wellness and responsibility. We have outlined how credit scores are calculated, why it matters and steps to take to improve your score.

How is my credit score calculated?

The three major credit bureaus in the U.S. collect and share information on a person’s credit usage with potential lenders and financial institutions. Most lenders use this information and the FICO scoring model to calculate credit worthiness. Some use the VantageScore model instead. Both scoring models look at the following factors when calculating credit scores:

The age of your credit. A longer history of credit usage boosts your score.
The timeliness of your bill payments. Chronic late payments can drastically reduce a score.
The ratio of outstanding debt to available credit. The VantageScore formula views having a lot of available credit as a liability, while the FICO formula considers this a favorable point.
The diversity of your credit. Lenders want to see that you have several kinds of open credit.
The trajectory of your debt. Are you constantly accumulating new debt, or working toward paying down your existing debt?
Your credit card usage. Financial experts recommend having several open and active credit cards to boost your score.

How does my credit score affect my life?

Here are some ways your credit can affect your life:

Loan eligibility. Lenders check scores to determine whether you will be eligible for a loan. A poor credit score can keep you from buying a house or car or getting other types of loans.
Interest rates on loans. A higher score can get you a lower interest rate on a loan, and a poor score can mean paying thousands of extra dollars in interest over the life of the loan.
Employment. Many employers look at the credit scores of potential employees as part of the hiring process.
Renting. Lots of landlords will run credit checks on new tenants before signing a lease agreement.
Insurance coverage. Most insurers will check your credit before agreeing to provide you with coverage.

How to improve your credit score

Pay your bills on time. If you find timeliness to be a challenge, consider automatic payments.
Pay more than the minimum payment on your credit cards. This shows you’re working on paying down your debt and can help improve your score.
Pay your credit card bills before they’re due. This way, more of your money will go toward your outstanding balance instead of toward interest.
Settle outstanding medical bills. These can significantly drag down your credit score.
Consider debt consolidation. If you’re paying interest on multiple debts each month, you may benefit from transferring your debt to a single credit card that offers an introductory interest-free period or from taking out an unsecured loan.

Take Your First Steps Before They Take Theirs: Financial Planning For The New Parent

The first few days after you bring your baby home is an exciting time that can also be a bit stressful. So can the first few weeks. Many parents also find the first few months stressful, while others are stressed over their parental commitments a while longer. It’s easy to get caught up in sleepless nights, and reading every book you can find, but sometimes parents forget an obvious priority: teaching and helping your child to save money as they grow up. Here are some ways you can begin financial planning as a new parent.

Set up a savings account for your child and make regular deposits

You don’t have to know what you want to do with your child’s savings yet. However, the first step in financial planning is as simple as opening a savings account for your child. Studies show that young adults who had savings accounts as children make better financial decisions, are more prepared for financial emergencies and plan better than their peers who didn’t grow up with savings accounts. So, for now, open a savings account, put a few dollars into it every paycheck and invite your child to participate by making deposits of their own when he or she is old enough. Olean Area Federal Credit Union offers a youth savings account that has no monthly service charges and allows you to earn dividends when you have $5 or more in your account, and we have educational resources so your child can learn to be smart with their money. You can find out more by clicking here.

Start saving for college now

Most parents know they need to save for their child’s college education, but few seem to realize how much college will cost. Education costs have been rising much faster than inflation, and if you’ve been out of school for a few years, you might be shocked by the costs. To make matters worse, and more expensive, many universities are receiving fewer public dollars, and getting a larger portion of their income from tuition, thus passing the cost on to students.

Focus on what you can control

If you’ve been a parent for more than a few minutes, you’ve had at least one moment of pure panic while thinking about the future. Perhaps, on one of the few nights your baby allows you to sleep, you decided to keep yourself up by listing every terrible thing that could happen to you, your partner or your child. There’s so much you can’t control, of course, so place your focus on the things you can control.

One mistake many new parents make while financial planning is to immediately start throwing money at college savings while ignoring their overall financial picture. Start by building a nest egg that can carry you through six to nine months of lean time, and then build your retirement fund. Money market accounts are a good way to build your short-term nest egg, because you can access your money if you need it, while getting a better return than traditional savings.

As for retirement, you may not have given it much thought since your initial conversation with HR. Now is the time to see what else you need. Remember, you can take a loan to pay for college, but you can’t get a loan to retire. Even if you want to put college money away now, you can still get tax incentives if you contribute to your retirement at the same time. Call (716) 372-6607, click here, or stop by Olean Area FCU if you want some help figuring out what’s right for you.

The Complete Guide to IRA Products and Their Recent Changes

Q: How do I choose the Individual Retirement Account (IRA) that’s right for me? What do I need to know about recent changes made to these IRA products?

A: There are important distinctions between each type of IRA. There have also been several changes made to the structure of IRAs with the passing of the Setting Every Community Up for Retirement Enhancement (SECURE) Act in December 2019 and the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020.

This guide can help you choose the retirement account that suits your needs.

PLEASE NOTE: Traditional and Roth IRAs are available to members of Olean Area Federal Credit Union, while SEP and SIMPLE IRAs are strictly employer run IRA products.

Traditional IRA

Traditional IRAs offer tax-free contributions, which may also be tax-deductible. Investment earnings aren’t taxed, and there are no income limits for contributors; however, all withdrawals made during retirement will be taxed. Explore our Traditional IRA rates by clicking here.

Roth IRA

Roth IRAs feature taxed contributions and growth with tax-free withdrawals at retirement as long as they are age 59 1/2 or older and have had the account for 5 years or longer.

There is no age limit for contributions, though there are income and contribution limits for eligible contributors.

There are several other withdrawals that may qualify as tax exempt. Please click here to ask a member service representative for more information.

SEP IRA

Simplified Employee Pension (SEP) IRAs are workplace retirement funds with contributions made by the employer. Contributions are subject to a cap. Earnings grow tax-free. The annual contribution limits are generous, but subject to fluctuation along with the business’s cash flow. Also, there are no catch-up contributions allowed for workers aged 50 and over.

Up until the passing of the SECURE Act, the limit for SEP IRAs was capped at 25% of an employee’s salary or up to $56,000, whichever is less. That limit has been increased to $57,000.

SIMPLE IRA

Savings Incentive Match Plan for Employees (SIMPLE) IRAs are workplace retirement accounts that allow both employees and employers to make contributions.

With the passing of the SECURE Act, the contribution limit for SIMPLE IRAs increased from $13,000 to $13,500, with a catch-up limit of $3,000.

SECURE Act changes to retirement accounts

RMD changes: Up until the passing of the SECURE Act, holders of IRAs were not allowed to make contributions and were obligated to begin taking Required Minimum Distributions (RMDs) when they reached age 70 ½. Now, the age for RMDs has increased to 72. Also, IRA holders can now continue making contributions indefinitely, as long as they can demonstrate earned income.

Changes for workplace retirement plans: Part-time employees who work at least 500 hours in three consecutive years and meet the age requirements can now participate in employer retirement plans. This change takes effect in January 2021. Also, small businesses can now team up with other organizations when opening an employer retirement plan.

Changes for inherited IRAs: Non-spousal inheritors of IRAs must now empty the account within 10 years.

CARES Act changes to retirement accounts

Changes for RMDs: The CARES Act waived all RMD requirements for IRA products for the year 2020.

Special allowances for coronavirus-related withdrawals: The CARES Act provides for expanded distribution options and favorable tax treatment for up to $100,000 of qualified coronavirus-related distributions.

If you have questions about your existing IRA or want information about a new IRA, please click here.

All You Need to Know About Closing Costs

If you’re in the market for a new home, don’t forget to budget for closing costs! This includes all fees and charges incurred while officially transferring a property from one owner to another.

Here’s all you need to know about closing costs:

How high will my closing costs be?

Closing costs usually amount to 2-5 percent of the home’s price. For example, if you’re purchasing a $130,000 home, your closing costs can be anywhere from $2,600 to $6,500.

What kind of charges can I expect as part of my closing costs?

Application/Underwriting/Origination fees: Compensation for the administrative costs associated with processing a mortgage loan.
Appraisal: Covers the fee of a professional appraiser to provide your lender with an estimate of your home’s true value.
Attorney fee: In some states, the closing documents must be reviewed by an attorney before they become binding. This charge covers the attorney’s fee.
Closing fee or escrow fee: The cost of the title company, escrow company or attorney for facilitating the closing.
Credit check: Some lenders charge a fee to examine your credit history.
Escrow deposit: You may be asked to make your initial escrow deposit at closing, to ensure the financial institution has the funds to pay property taxes and/or mortgage insurance for the first twelve months.
Home inspection: The cost of a professional inspection of your entire home and property.
Homeowners’ insurance: Many lenders require you to pay the first year’s worth of homeowners insurance premiums prior to closing.
Lender’s title insurance: Title insurance insures the outstanding balance of a mortgage in the event there is a financial loss due to a defect in the title to the property.
Prepaid interest: Most lenders require buyers to prepay the interest that will accrue from the day of closing until the date of the first mortgage payment.
Primary Mortgage Insurance (PMI): If you need to pay PMI on your loan, the first month’s premium is due at closing.
Title fees: This covers the cost of a title search, in which your lender hires a title company to look for possible legal claims on your property.

Should I choose the “no-closing-costs” option?

Before signing up for a no-closing-cost loan, it’s important to understand that there’s no such thing as a mortgage without closing costs. In a no-closing-costs loan, these fees will could be rolled into the mortgage. In this scenario, you would be paying interest on your closing costs throughout the life of the loan. Also, lenders usually raise the interest rates on no-closing-costs mortgages.

The Credit Union Difference – A Look at Loan Interest Rates

One of the most beneficial advantages we offer our members here at Olean Area Federal Credit Union is lower interest rates on loans. Let’s take a look at some of the most popular loan types and how the rates at credit unions differ from the industry average.

Auto loans

Looking for a new set of wheels? Look no further than Olean Area Federal Credit Union! With rates that fall far below the industry average, you can sign confidently, knowing you’re getting a fantastic deal.

Used Car Loan, 48 months:

Average industry rate: 5.44%APR (Annual Percentage Rate)

Average credit union rate: 3.50%APR

Used Car Loan, 36 months:

Average industry rate: 5.39%APR

Average credit union rate: 3.37%APR

New Car Loan, 60 months:

Average industry rate: 5.10%APR

Average credit union rate: 3.45%APR

New Car Loan, 48 months:

Average industry rate: 4.99%APR

Average credit union rate: 3.32%APR

You can explore current Auto Loan Rates at Olean Area FCU by clicking here.

Credit Cards

Why pay a steep interest rate on a new credit card when you can get one at Olean Area Federal Credit Union at a rate that’s nearly two points lower than the national average?

Average industry rate on new credit cards: 13.15%APR

Average credit union rate on new credit cards: 11.54%APR

Click here to discover current credit card rates offered by Olean Area FCU!

Home Equity Loans

Looking to fund a home renovation or expansion? Consider a home equity loan, or a home equity line of credit (HELOC) at Olean Area Federal Credit Union.

Home Equity Loan, 5 years, up to 80% of the home’s value:

Average industry rate: 5.21%APR

Average credit union rate: 4.65%APR

Home Equity Line of Credit, up to 80% of the home’s value:

Average industry rate: 5.05%APR

Average credit union rate 4.56%APR

Home Loans

When you apply for a home loan at Olean Area Federal Credit Union, you’ll enjoy personalized attention throughout the loan process, quick, professional service and interest rates that beat the industry average no matter what kind of mortgage you choose.

30-Year Fixed-Rate Mortgage:

Average industry rate: 3.79%APR

Average credit union rate: 3.71%APR

15-Year Fixed-Rate Mortgage:

Average industry rate: 3.36%APR

Average credit union rate: 3.23%APR

5/1 Year Adjustable Rate Mortgage (ARM):

Average industry rate: 3.79%APR

Average credit union rate: 3.28%APR

3/1 Year ARM:

Average industry rate: 3.74%APR

Average credit union rate: 3.26%APR

1 Year ARM:

Average industry rate: 3.61%APR

Average credit union rate: 3.48%APR

Discover current mortgage rates offered by Olean Area FCU by clicking here.

Unsecured loans

When you need a bit of extra cash for a reason that doesn’t fit neatly into any other category, consider taking out an unsecured loan at Olean Area Federal Credit Union.

Average industry interest rate on fixed 36-month personal/unsecured loans: 10.21%APR

Average credit union interest rate on fixed 36-month personal/unsecured: 9.28%APR

You can find out about your unsecured loan options by calling an Olean Area FCU lender at (716) 372-6607, or by filling out the “Contact Us” form.

What School Doesn’t Teach You About Money

With the new school year either here or just around the corner, it’s time to fill your shopping carts with No. 2 pencils, protractors and all the goodies the kids will lose by the second day of school. If they’re headed off to college, it can be even more exciting. But, instead of needing you to replace their pens on day two, your college-aged child will probably be calling to ask for money by then.

It’s such a ritual that, at this point, many of us don’t really question it. But how much do our kids actually know about money? You might want to only include the lessons you taught them, because their school probably didn’t teach them much at all.

Common core and other national guidelines don’t include requirements for teaching budgeting skills, how to balance a checkbook, or even explanations of basic concepts such as credit, loans or mortgages. Basically, the last time your children learned about money at school, it probably involved finding out how many apples and oranges they could buy in some middle school math word problem.

We talked to some credit union members about the lessons they want to pass on to their kids, and below you’ll find some of our favorite lessons to teach your kids.

Pay yourself first

No one else is going to make you a financial priority, so don’t make them your financial priority.

If you want to know if you can afford something, check your budget. When you have to check your checking account, you can’t afford it.

If you reconcile your accounts every month, you’ll have a pretty good idea how much is actually in each account. Plan ahead. Make a budget. Execute the plan by sticking to that budget.

Take risks while you’re young

You can afford to be more aggressive with your retirement and college funds while you have plenty of time to make it back up, so don’t be afraid to push those funds a little bit. That said, not saving for retirement is not a risk. It’s just a bad idea.

Make sure the Joneses are keeping up with you

It’s easy to get lost trying to compete with your peers and almost as easy to ignore those consumer pressures entirely. But what about the third option? Instead of ignoring their financial situation, check in every now and then to see if they need help. Our communities are better when we care about each other.

Whether your kids are in diapers or their kids are wearing them, it’s never too early or too late to teach financial literacy. Make sure you’re instilling the right lessons, and check back in with Olean Area Federal Credit Union, because we’ve always got plenty of resources for young people to learn the lessons they aren’t getting in math class.

All You Need to Know About Selling Your Home During COVID-19

For many homeowners, the hot real estate market of spring and summer of 2020 was going to be the season they put their homes up for sale — until the coronavirus hit. With people struggling just to get by financially, selling a home seemed like a dream from another lifetime. Records of U.S. home sales for March show a sharp decline of 21% in total homes sold, according to data from the National Association of Realtors.

Now, though, the U.S. real estate market is looking very different. As the economy limps toward a recovery, national home sales climbed a record 20.7 percent in June, compared with home sales from June 2019.

However, many homeowners who have planned to sell this year are still reluctant to take that leap. Here’s all you need to know about selling your home during the COVID-19 crisis.

Are you really ready to sell?

Before putting your home on the market, consider all variables involved and be sure it’s a financially responsible move. Thanks to coronavirus, life circumstances you may have relied on, such as a steady salary, may not be dependable anymore.

Stage your home to sell

With restrictions still in place in many states and lots of people home in quarantine, many buyers will be doing their touring virtually. For sellers, this means staging and photographing a home properly is more important than ever.

Consider hiring a professional home-staging and photography service to present your home in the best light. You can also invest in virtual staging software to help you update the furniture with just a few clicks.

To make it easier for buyers to view your home, you can post a virtual tour on your online listing, and offer the option of scheduling a live tour with an agent through FaceTime.

Play it safe

If you will be allowing potential buyers into your home, set up a box of disposable masks, shoe covers and sanitizing wipes at the door for all visitors who will be tramping through your home.

Price it right

Fewer homeowners are putting their houses up for sale this year, but the pool of buyers is also smaller than usual. This means that you won’t be able to jack up the price of your home for way more than it’s worth. Work with a real estate agent to look at comparable home sales in the area and to determine a fair asking price.

Closing during COVID-19

The coronavirus pandemic will likely affect every aspect of selling your home. With many professionals working with a smaller team now, be prepared for various steps of the process to be delayed. This is especially true with lenders, as low mortgage rates have triggered a spike in refinance applications and lenders are busier than ever.

Should I Buy a House During a Pandemic?

Q: I’d planned to buy my first home this spring — and then the coronavirus changed everything. Should I forget about my plans, or can I buy a house during a pandemic?

A: The coronavirus outbreak that has swept through the world has given rise to dozens of financial questions. No one can say when this pandemic will end, or the lasting impact it will have on the economy. Experts can only look at past economic crises in an attempt to predict what the financial future will look like in the United States.

Let’s explore the mid-pandemic housing market and the wisdom of purchasing a home during a time of economic instability

The home sales of February 2020 were the strongest they’ve been in the country since 2007, topping 5 million sales. Factors, like falling interest rates and a booming economy, contributed to the thriving housing market. But two months later, experts are already seeing a sharp decline in buying.

This downturn has likely been triggered by the economic devastation caused by the outbreak, including widespread job insecurity, thousands of shuttered businesses and millions of employees on leave from work.

The decrease in home sales is also likely due to practical reasons. When people are worried about their health, it’s difficult for them to think about purchasing a new home. Meeting with potential sellers, real estate agents and looking at properties is also complicated when trying to maintain social distancing.

A dwindling housing market does not automatically mean this isn’t a good time to buy a house. In fact, times of financial uncertainty generally lead to falling mortgage rates and the ease of credit qualifications. Mortgage rates have already reached a record low of 3.13 percent in the beginning of March, prompting some buyers to rush into new home purchases.

Some market experts also believe the coronavirus pandemic will cause an eventual spike in home sales as buyers, fearing a recession, will want the stability and control that homeownership brings.

Before you jump into a home purchase at this time, you may want to consider the following factors:

How stable is your income? If you have reason to believe you might be laid off soon, you may want to hold off on your purchase.
How long do you plan on living in this home? If you plan on selling within the next few years, you may come out at a loss due to a falling housing market and an unstable economy.
Will you have savings left after buying a home? As the economy heads toward a probable recession, this is not the best time to be without a savings cushion.

If you can afford the purchase, and your income isn’t threatened by the economic instability, the favorable interest rates and looser qualifications during this pandemic can make it a good time to buy a new home.

All You Need to Know About Home Loans

If you’re in the market for a new home, you’ll likely need to take out a home loan or mortgage. Let’s take a closer look at home loans and the application process.

What is a home loan?

A home loan enables you to buy a home without having to pull all the cash directly from your pocket at the time of purchase. You’ll need to make a down payment, which is typically between 3.5-20% of the home’s value, along with closing costs and some other fees. The lender will finance the rest. You’ll then repay the loan, along with interest, generally over the course of 15 to 30 years.

Are all home loans alike?

There are several kinds of home loans, each with its own attributes. Here are three common types:

1. 30-year fixed-rate mortgage. The interest rate on this 30-year mortgage remains fixed despite any changes to the national rate.

2. 15-year fixed-rate mortgage. This fixed-rate mortgage will only last 15 years. Monthly payments will be higher, but the overall interest paid on the loan will be much lower.

3. Adjustable-rate mortgage (ARM). An ARM will give the borrower a lower interest rate in the early years of the loan, followed by a gradual rate increase over the rest of the life of the mortgage.

What do I need to know before applying?

To qualify for a mortgage, you’ll need to prove you are financially responsible and you can afford the monthly mortgage payments.

The primary way lenders gauge your financial responsibility is through your credit score. This number tells lenders how you’ve handled your past debts. Most lenders will grant a home loan to borrowers with a score of 650 or more. To boost yours, pay your bills on time and keep your credit card usage to a minimum. A higher score will help you get approved and will net you a lower interest rate on your loan.

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

When should I apply?

It’s a good idea to start the mortgage process before you begin house hunting. Your lender will let you know whether you can expect to be approved for a loan and will provide you with an estimate of how much house you can afford. At this point, you can also ask for a pre-approval letter, which confirms you are qualified for a mortgage and shows sellers you’re a serious buyer.

How do I apply?

To apply for a home loan at Olean Area Federal Credit Union, contact a representative to help you get started. Make sure to have all of your financial documents in order.

Am I Really Ready to Buy a House?

Q: I’ve saved up for a down payment and drawn up a wish list of what I’m looking for in a new home, but I’m getting cold feet. How do I know if I’m really ready to buy a house?

A: It’s normal to feel hesitant about going through with what may be the biggest purchase of your life. To help put you at ease, we’ve compiled a list of questions to ask yourself before buying a new home.

Can I afford to buy a house?

Before viewing properties, remember that purchasing a home will cost more than just the down payment. You’ll also need to cover closing costs, which typically run at 2-4 percent of the total purchase, as well as moving costs and possibly new furniture and renovations for your new home.

Can I afford the monthly mortgage?

Most lending companies will grant a loan to a homebuyer if the monthly mortgage payments do not push the buyer’s debt-to-income ratio above the recommended 43 percent. Work out the total for your pre-mortgage debt before applying for a loan so you have an idea of how much house you can afford.

Am I ready to settle down?

Buyers who don’t plan on staying in their homes long-term may end up incurring a loss. Consider factors like your career, family planning and evolving demographics of a neighborhood when trying to answer this question.

Does buying a house in my neighborhood make sense?

In some neighborhoods, rentals are relatively cheap while houses sell for far more than they are worth. In these neighborhoods, buying a home may not be the logical choice.

Is my credit score high enough?

Most lenders will only grant a mortgage to borrowers with a credit score of 650 or higher. If your score doesn’t make the cut, you can boost it by being super-careful about paying your bills on time, paying credit card bills in full each month and keeping credit utilization low.

Do I have a plan in place for repairs?

When a renter has a leaky faucet, they call the landlord and the problem becomes theirs. When a homeowner has a leaky faucet, it’s their own problem. They can either fix it or hire someone to do the job, but it’s a good idea to have a plan in place before the first thing in a new home needs fixing. If you’re handy enough to make repairs on your own, you’ll need to be willing to give up some free time to tend to such things. Otherwise, it’s best to have a tidy sum put away to pay for necessary repairs before purchasing a home.

If you’re ready to get started on your home loan application, contact Olean Area Federal Credit Union today to hear about our fantastic home loan options.

9 Steps to Buying Your First Car

Congrats—you’re buying your first car!

The process can be daunting, but Olean Area Federal Credit Union will walk you through it. Follow our guidelines for a stress-free ride!

1. Determine if you really need a car

OK, you weren’t expecting this, but it’s important to take a step back to review your actual transportation needs. Lots of college towns have a great bus system in place, which can save you loads on car costs. If you have a car-owning good friend you’ll be riding into town with each weekend, it may not pay for you to have your own set of wheels. Also, if your campus has everything you need within walking distance, it can be cheaper to rent a car when you need it instead of buying one now.

2. Know your budget

If you’ve determined that a car purchase is necessary at this point in your life, don’t start hunting for your dream car until you’ve worked out a realistic budget. Take a hard look at your other monthly expenses to see how much you can spare for a new set of wheels. Don’t forget to include some cash for auto insurance, gas and maintenance.

3. Create a tentative wish list

This is your first car, so it doesn’t need to have all the bells and whistles it does in your dreams. Sit down and make a list of all the “must haves” and “wants” you’re looking for in a vehicle. Determine how much each feature would cost you in a car and decide which are really important.

4. Obtain financing

If you’ve been saving up cash for your first car all through high school, you’re set! Otherwise, visit Olean Area FCU to learn about your auto loan options and to get your pre-approval.

5. Research your options

You’re ready to start looking for a vehicle that will satisfy your needs and wants. You can research ratings and user reviews on sites like Cars.com and create another list that contains your top three choices of car makes and models.

6. Look up listings

Start scavenging for listings of your car choices online and in your neighborhood. Once you’ve found several that might work, research their histories on Carfax.com and then contact the seller to set up a test drive.

7. Take it for a spin

If a car checks out and everything looks good, you’re going to want to take it for a test drive. Pay attention to details like legroom, acceleration, brake functionality and more while you drive.

8. Have it inspected

If you’re purchasing a used vehicle, it’s best to have it inspected by a mechanic before signing on the deal.

9. Make it official

If your car has passed the test drive and inspection, you’re ready to make it official! Be sure to read all documents before signing and obtain insurance before your first joyride.

Enjoy your new set of wheels and drive safely!

SOURCES:

https://www.carbuyingtips.com/first-time-buyer.htm

https://www.edmunds.com/car-buying/10-steps-to-buying-a-used-car.html

https://www.carbuyingtips.com/used.htm

Home Improvement Hacks

You’ve finally finished scrubbing and purging your home from top to bottom in honor of spring. And now, with every surface, closet, and room sparkling clean, you’re starting to see all the areas that could use a facelift. Maybe you’re hankering after a complete kitchen makeover. You might be dreaming of a fresh coat of paint for your bedrooms. Or maybe your window treatments are in desperate need of an overhaul.

The only thing standing between you and your dream home is finding piles of cash for funding it, right?

Maybe not. Lucky for you, you don’t need to spend a fortune this spring to give your house a new look. Read on for our list of home improvement hacks and learn how to upgrade your home on a budget.

1. Cabinet makeover

Instead of dropping a ton of money on replacing your kitchen cabinets, you can give a tired kitchen a fresh new look by replacing just the cabinet fronts. You’ll pay a fraction of the price and no one will know it’s your old, shabby cabinets hiding behind those beautiful new doors.

Want to go even lower-cost? Consider painting the front of your cabinet to upgrade the look without spending much money or time. You can also replace those dated cabinet pulls with something nicer and trendier for a more modern look.

2. Cover your countertops with contact paper

Granite countertops can be gorgeous, but they’re also incredibly pricey. Instead of taking out a second mortgage for beautiful counters, try covering them with pretty, patterned contact paper. You’ll find loads of granite lookalikes at home improvement stores and you can learn how to apply your knockoff covers neatly from DIY tutorials on YouTube. You might even fool your friends and family into thinking it’s the real thing. But don’t worry: We won’t tell anyone it’s fake!

3. Use PVC pipes for curtain rods

Pretty curtains and drapes add a splash of color and personality to any room. You can make your own inexpensive curtains by picking up some fabric from a sewing supply store. The only issue? You’ll need rods to hang up those curtains—and if you need specific measurements and colors, that can get pricey.

Make it happen with this hack: Use PVC pipes instead of curtain rods. You can paint your pipes to match the décor of the room and hang them with inexpensive hooks that fit well. Curtains, done!

4. Create a mirrored backsplash

All you need for this fantastic hack is a pack of self-adhesive mirror tiles. These retail for about $15 per 20-tile pack and you can find them online or at a home improvement store. Use your snazzy tiles to create a mirrored backsplash in your kitchen. Decorate with inexpensive decals to up the glam or just leave it bare. The mirrors will give the illusion of greater space and you won’t have to deal with grout and caulking. It’s a super-cheap way to make your kitchen sparkle!

5. Slipcover your sofa

If your sofa is hopelessly stained and you’d love to update it, but can’t spare the cash, try covering it in a slipcover. You can find a leather-look slipcover to match the shape of your sofa for $100 or less. They’re not just for protection; the right slipcover will give you an (almost) brand new couch! Make sure you read reviews before purchasing, because quality really makes a difference here.

6. Let the light in

Light fixtures can really make or break an area in your home, and you don’t have to spend a fortune to get it right. Walk through your home and take note of the light fixtures that are relics from a past life, paying close attention to highly visible areas. Then, take a trip to a home improvement store or check out sites like Wayfair and Hayneedle for trendy, striking light fixtures. For less than $100, you can give your house an entire new look!

7. DIY paint

If the walls in your home desperately need fresh coats of paint, look no further than your local home improvement store. No, you don’t have to be a genuine DIYer to get this right; it’s fairly simple. You’ll find loads of painting tutorials on YouTube, and you’ll only have to spring for the actual paint plus a few supplies. Best of all, when you’re in charge, you can get as creative as possible. Using painter’s tape and your imagination, you can paint funky designs on your walls, like diamond contrasts, vertical and horizontal stripes, or, if you’re feeling really artsy, go for a full-blown mural!

These hacks will make your home beautiful this spring for just a bit of money. If you need more major home improvements that require serious cash, though, we can help. Call, click or stop by Olean Area FCU today to ask us about opening a HELOC or taking out a home equity loan. We can make that happen, too!

SOURCES:

www.google.com/amp/s/www.thrillist.com/amphtml/home/home-improvement-hacks-under-50-diy-home-projects

diyjoy.com/diy-remodeling-hacks/

www.architectureartdesigns.com/15-smart-hacks-that-will-save-you-money-while-remodeling-your-home/

www.google.com/amp/s/www.remodelista.com/posts/apartment-rental-simple-easy-budget-hacks/amp/