Is Now the Right Time To Buy A House?

Now might be the perfect time to purchase your dream home.

Owning your own home has always been part of the American dream. In the past few years, this dream seemed to have burst for many, along with the real estate bubble. Despite the recent gloom and doom over the state of the housing market, however, many people searching for homes right now are finding excellent deals. Leveraging power and affordability are greater now than they have been for years.

The good news for buyers is that it is still a buyer’s market. If you qualify for bank financing, or have cash readily available for a large down payment, it is a great time to buy a house. Purchasing a home now can prove to be a great investment over the long term, if you buy smart.

Here are some great reasons to buy:

  • Get an inexpensive mortgage. Interest rates are historically low, so low that it is feasible to get a 30-year fixed loan at less than 4%. That makes a very appealing case for buying a home now. Such low mortgage rates may be scarce once inflation returns to normal. If you decide to purchase a house and rates drop in the future, you might be able to refinance if it makes sense financially.
  • It is a good tax savings. You can deduct mortgage interest from your income tax and also deduct real estate taxes. When you choose to sell the home, you can get a tax break on capital gains if you itemize deductions. These tax benefits can even make home ownership less expensive than renting over the long term.
  • You will appreciate appreciation. You may have read that houses are not the investments they once were, but they remain an effective hedge against inflation (since principal payments remain the same). Historically, in a “normal” market, a house can appreciate 3% a year.
  • Great choices and excellent deals abound. There is still a glut of houses on the market from which to choose. The housing mix also includes short sales, foreclosure options and bank-owned properties, potentially offering you greater negotiating power. More availability means that you are more likely to fulfill your house wish list, such as being able to afford a four-bedroom home instead of three, or enjoying a larger yard, a two-car garage or multiple bathrooms.
  • Build equity each month. If you are presently renting an apartment or a house, you may get frustrated when signing your rent check each month. Why feel like you are throwing money away when you could be applying money to a mortgage each month and building equity instead?
  • You will have a place of your own. There is nothing like the feeling of pride you get from owning your own home. You can decorate your own place to suit your tastes – no more landlord limitations. In this economy, you can expect to find some deep discounts on home improvements and home furnishings. Go crazy and paint your walls a cherry red, or knock down a wall to create an open living space.
  • Buy a home for Fido and Fluffy. Many pet lovers consider cats and dogs part of the family. However, renting and pets rarely mix, especially in some parts of the country. It is often difficult to find an apartment that accepts multiple cats or large-sized dogs. Another benefit of home-ownership is that a house usually has a yard, so you and your pets can romp around and get valuable exercise.

There are many good reasons to purchase a home now, as long as it makes sense financially for you. We invite to visit us at any of our eighteen UCCU branches to learn more how you can become a homeowner. You will be glad you did.

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Carrying Around Extra Debt?

Here are some strategies to lighten the load.

Economic experts may have different opinions on when the economic uncertainty in the American economy will end. They do, however, agree on what fueled our country’s worst recession since the Great Depression – people spending more than they can afford to spend. The numbers do not lie. There is been a growing trend in consumer debt, including credit card balances, mortgages and student loans.

If you are among the growing number of Americans who have accumulated debt, what can you do to get relief? The good news is that there are some important steps you can take.

Create a budget and stick to it. The first rule of thumb in consolidating debt is to take a closer look at your expenses and income. Are you spending more than you make? It may sound like a simple question, but most people do not know the answer. Write down all your expenses in a given month, to see where you are spending your money. Be sure to include the items you routinely pay cash for, such as coffee, vending machine items, movie tickets or rentals, etc. You may be surprised to see where your money is going. Once you have listed your expenses, look for ways to decrease them.

Then, establish a realistic budget and work to stay on it. If you want to spend more money on entertainment or clothing, figure out other expenses you can cut down, such as buying your lunch every day.

Stop using your credit cards. If you have significant credit card debt, as many Americans do, it may be time to change your habits. A great rule to follow is if you do not have the money to buy something in cash, do not buy it. Think about your purchases before you make them. Also, do not be lured in by 0% interest to buy something you want but do not really need. You still have to pay for the purchase, and if you do not pay off your balance before the interest-free period ends, you will end up paying for accrued interest.

Pay more than the monthly minimum on your credit cards. If you have revolving debt, such as credit cards or home equity lines of credit, be sure to pay more than your minimum payments. Thanks to new credit card regulations, you can now see how long it will take you to pay off your debt if you just pay the minimum. The extra money you pay will go directly toward the principal balance and will reduce the amount of interest you pay over time.

Pay a little more on your mortgage. If you have extra money, consider putting a few extra dollars on your mortgage each month. You may be surprised to learn that paying just an additional $50 per month on your mortgage can help you save thousands of dollars in interest charges over the life of your loan and help you take years off your mortgage term.

Consider refinancing. If there is anything good that has come out of the economic uncertainty, it is that mortgage rates have reached record lows, making this a great time to consider refinancing your home mortgage. With rates so low, you can possibly reduce the term of your mortgage and pay the same monthly payment. You can also consider rolling your higher-interest credit card debt into your mortgage. That way, you can take advantage of potential tax benefits, since mortgage interest is tax deductible. If you do decide to consolidate debt with your mortgage, do not make the mistake of taking on additional debt with credit cards or home equity lines. You will negate the benefits of refinancing.

Pay yourself first. In these challenging times, it is more important than ever for you to set aside money for savings. To make it easier, arrange automatic transfers from your checking account to your savings account. These can even be setup over the phone by calling 801.223.UCCU (8228).

There is no question that life is unpredictable. There are times when you might need to use your credit card to pay for unexpected or emergency expenses. Just remember to try and use your savings first and to work on putting as much money as you can toward reducing your debt. In the long run, it will pay off. If you have questions about where to begin, stop by any of our eighteen UCCU branch or give us a call at 801.223.UCCU (8228) to see how we can help you start eliminating some of that extra debt.

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UCCU MEMBER NIGHT – Saturday, February 25th at the UCCU Center

We invite you all to come join us Saturday, February 25th celebrate our first MEMBER NIGHT at the UCCU Center. Come and enjoy some exciting UVU Men’s Basketball as they take on Texas Pan Am. FREE POPCORN for EVERYONE and FREE Hot dog if you are among the first 1,000 to arrive! Pick up your FREE tickets at any UCCU Branch. See you all there!

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Seven Keys to Buying a Home in Today’s Market

Seven Keys to Buying a Home in Today’s Market

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President’s Message February 2012

Growing Demand for Auto Loans

Throughout the recession, consumers have tended to keep their automobiles longer and put off buying new ones. In an effort to keep monthly payments as low as possible and protect themselves from uncertainty in the job market, consumers have put money into repairs instead of purchasing new cars. As a result, monthly book prices on used autos have actually gone up monthly for many months. This trend appears to be changing now. New auto sales are up slightly across the nation and we are seeing an increase in Utah as well. Economists predict that the “pent up demand” for new autos will boost new auto sales throughout 2012.  Buying a used auto still makes a lot of sense for many people although we will continue to see many programs aimed at encouraging consumers to purchase new autos.

New or Used – We’re Here to Help

Depending on your situation and your needs, buying either new or used can be the proper choice. Either way, your credit union is ready to help you finalize the purchase. Record low rates are available along with payment terms that will meet your budgeting needs. Auto loans tend to be a substantial part of household budgets. Finding the right terms, rates, and payments can be as important as finding the right auto.

Get Prepared Before You Shop

We suggest several things to help you be successful in your next auto purchase experience.

  • Determine how much you can afford. What monthly payment will fit into your budget? We can help you on-line or in person to determine what size of auto loan makes the best sense for you.
  • Check out what kind of autos fit in your price or payment range. What kind of auto do you need? Use the internet to see what is out there and what kind of prices exist for what you need. You can contact the credit union to double check on book prices and values.
  • Check with UCCU for pre-approval. This will help you shop with confidence, knowing that you already have financing arranged with terms and payment amounts that fit your budget.
  • Find a reputable dealer – they are all around – or, if you are buying on-line – be sure to check out the auto sufficiently.  Car-Fax and other history checks may be available. Often it is wise to take the auto to your trusted mechanic for a check-up.
  • Be disciplined. Once you know the price that is right for you – stick to your plan. Do not shop for a vehicle based on monthly payments alone. Sometimes extended loans lower your monthly payments but you may find that your loan lasts longer than your auto.  Be careful – while extended loan terms can lower your monthly payment – they can also make it harder for you to get financing on your next trade-in our auto purchase.
  • Extended warranties and other add-on options offered by dealers may be a wise investment. Determine what is best for you. Depending upon the age and condition of the auto, some options may make more sense than others.
  • Do not be in too much of a hurry. A wise old adage is to “never shop and make a major purchase on the same day. Sleep on it.” The idea here is to take the necessary time to prepare, compare, and then make a thoughtful decision. After all, you will be paying for the auto for a while – and hopefully driving it even longer.

Happy shopping – and do not forget to rely on your credit union in the process. Our goal is to be your “first choice” financial partner – helping you make smart decisions about your finances and your life.

Jeff Sermon
Utah Community Credit Union

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