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Rising Interest Rates: What Do They Mean For You?

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If you read financial headlines, you’ve no doubt seen the news that the Federal Reserve is raising interest rates. These headlines can be accompanied with all sorts of hyperbole about the end of the stock market, the boom of bonds or any of a dozen other possible predictions. It’s easy to get overwhelmed when there’s this much information and so much of it is conflicting. Let’s set the record straight on what rising prime interest rates mean for you and your:

  • Adjustable-rate Mortgage
  • Portfolio
  • Savings
  • Debt

The prime interest rate is the rate that the Federal Reserve charges financial institutions to borrow from it. It influences a lot of other financial prices. Many of these are only of concern to investment bankers, professional investors and other economic enthusiasts. Here are some key ways the prime rate hikes can affect you!

1.) Get out of your ARM

Many people opted for adjustable-rate mortgages (ARMs) when interest rates were historically low. These mortgages often have much better rates for an introductory period, usually five years, before they adjust to a new rate. That new rate is determined in large part by the rate the Federal Reserve charges.

The Federal Reserve is planning to continue to increase interest rates as the economy continues to improve. This means the rate on your ARM may go up as well. Worse yet, the rising rates could make your monthly mortgage payment unpredictable, putting you in a bit of a budget bind. Fortunately, you can refinance your mortgage into a fixed-rate loan and take advantage of still-low interest rates. You may still be able to secure a low rate on a 10-, 15- or 30-year fixed-rate mortgage. As interest rates continue to rise, your fixed-rate mortgage will stay the same, meaning your savings will increase as time goes on.

2.) Balance your portfolio

The historically low interest rates over the past six years have done wonders for the stock market. Because companies could borrow at affordable rates, they could expand rapidly. That expansion fuels growth in stock prices.

As interest rates rise, that credit availability will decrease. Companies will find it more difficult to expand, and their growth will slow. This slowing of growth may lead to a decline in stock prices.

However, as interest rates rise, bond rates will also increase. That will lead to an increase in their price as more investors chase those rates. Individual investors need to ensure their portfolios are properly balanced to take advantage of changing market conditions. Speaking to a financial adviser to ensure your assets are where they need to be will help keep your investments growing at a healthy rate.

3.) Save more

The Federal Reserve interest rate also affects the rates that financial institutions are able to offer account holders. As it becomes more expensive to borrow from other institutions, it’s more profitable for those institutions to “borrow” from their members in the form of certificates and savings accounts. As interest rates continue to rise, it’ll be increasingly more profitable to sock your money away in an interest-bearing account.

If you’ve been putting off opening a certificate or increasing the deposits in your share account, now is an excellent time to consider it. With a 12- or 24-month certificate, you can take advantage of rising interest rates while still leaving yourself the flexibility to re-invest once interest rates rise again.

4.) Refinance your debt

The service charges on several kinds of debt are tied to the prime rate. Notably, credit cards and private student loan rates may increase as the prime rate continues to climb. That makes now a great time to think about refinancing.

Take advantage of currently low interest rates with several strategies. A home equity line of credit can help bundle your high-interest, unsecured debt with your low-interest mortgage. A personal loan for refinancing can also help secure a better interest rate. Other options exist, and the sooner you speak with a debt counselor or other financial professional, the better off you’ll be.

It’s easy to get overwhelmed by all the financial terminology surrounding news events like rate hikes. That’s why it’s best to have an advocate in your corner to help you figure out what to make of a changing economic landscape. Utah community Credit Union can do just that. Call, click or stop by to speak to a member services representative about how you can take advantage of this opportunity and put yourself on the path to financial wellness.

Find your nearest UCCU location here: http://www.uccu.com/home/uccu/locations

Your Turn: Got questions about rising interest rates? Leave your questions in the comments. Or, if you’ve got a handle on all things economic, share your wisdom with others!

Sources:

http://www.azcentral.com/story/money/business/consumers/2017/01/19/bit-bit-rising-interest-rates-making-impact/96560462/
https://www.nytimes.com/2017/01/18/your-money/increases-in-interest-rates-on-savings-accounts-remain-slow-to-materialize.html?_r=0
http://www.usatoday.com/story/money/personalfinance/2016/12/28/what-2017-may-mean-your-personal-finances/95736736/

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President's Message April 2016

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We are well into our 60 year celebration and many people are taking advantage of our Cash for You, Cash For Your School initiative. Don’t forget that for every loan you transfer to UCCU we will give you 0.5% cash back, as well as donate 0.5% cash back to the K-12 school of your choice. Tell your friends and neighbors and help support local education.

The Utah housing market is booming. There is significant demand for mortgage and construction services and consumers are continuing to build equity due to rising housing prices. With the growing population rate and the increasing demand for housing, appreciation rates have continued to rise and will likely continue to be favorable.

Trying to help your children get into their first home? It may be easier than you think. UCCU has our first time home buying program that takes the guesswork out of finding the home of your dreams.  UCCU offers support and resources to help you find the right loan product to suit your financial needs. Our BuyerRelax program offers access to mortgage experts who can answer any question – big or small.

It is our pleasure to serve you! We want to be your trusted financial partner now and into the future. Take full advantage of your membership by visiting with one of our financial experts. If you are not yet a member – become one and let the benefits of UCCU membership help you save money, make smart financial decisions, and propel you and your family closer to you financial goals and dreams.

Jeff's signature
Jeff Sermon
President/CEO

 

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President's Message March 2016

JeffSermon_2015

The credit union continues to celebrate 60 years of serving this great community! This year-long celebration will give members and the credit union many opportunities to strengthen the community and take advantage of special offers and services provided by the credit union. We welcome your participation and urge you to take advantage of the special offers, rates, and service opportunities that are part of our celebration.

  • Support the School of your Choice

Throughout the year, you can earn money and also support a local school of your choice – just by transferring an existing loan to UCCU!

When you transfer a loan from somewhere else to the credit union, you will not only benefit from lower loan rates and lower monthly payments – but UCCU will pay you ½% of the loan balance in cash up to $125. But that’s not all. The credit union will also send the school of your choice the same amount (1/2/% of the loan balance up to $125) in your name!  So, by moving a loan to UCCU, you’ll most likely end up with better loan rates and terms, some cash in your pocket, and the credit union will donate the same amount to a school of your choice in your name!

  • March Loan Sale Going on Now

You’ll find low special rates on auto loans and on home equity loans as part of our 60th Anniversary celebration. Whether its time to replace your car or whether you’re planning some needed home improvements or other summer projects, UCCU’s low loan rates will help you succeed.  There will be additional special offers throughout the year.

  • Your “First Choice” Financial Partner

As always, we thank you for your trust and your membership. Our sole focus, as a not-for-profit financial institution, is to provide you and your family with the services and information that will help you set- and reach- your financial goals. One valuable resource to help you make smart financial decisions is UCCURelax.com. This educational site is a great guide to help save you money and frustration in purchasing a home or car. Check it out and see how it can give you confidence in making some of life’s biggest purchases.

We love serving you and look forward to another 60 years of serving this community!

Jeff's signature

Jeff Sermon
President/CEO
Utah Community Credit Union

 

eNEWS_2016_01_promo1_v2

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President's Message January 2015

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As 2015 gets underway we note the relatively strong local economy. Unemployment is low, job creation is positive, population growth is strong, and consumer confidence continues to rise.

Of course, our local economy is still impacted by the national and global economic trends. Monetary policies in the country and in Europe continue to rely on government intervention to keep rates low, and spur on a continuing but stubborn recovery. Recent developments in the energy industry bring us sharply lower oil and gas prices. While we enjoy filling up our cars for a lot less money, the low prices are creating havoc in many countries around the world.

The European Union is bracing against economic declines with several countries already in recession. Japan, the third largest world economy, continues to struggle under the weight of massive debt. We watch with great interest as our own national monetary and fiscal policies evolve with the new congress. 2014 was the best year for US job creation since 1999 with a reported drop in unemployment to 5.6%.

National and global uncertainties notwithstanding, we feel fortunate to be enjoying a very robust local economy and the opportunity we have to serve you, your family, and this community. Most economists agree that, overall, economic trends are positive and the recovery is continuing. We remain optimistic about the future!

Six things to keep in mind as you plan for 2015: 

  1. With rates expected to rise in the near future, the credit union created a home equity line of credit that stays fixed to help hedge against a payment going up. Home equity lines of credit typically have a variable rate – which can be the best option at times, but this new home equity has a fixed rate for 10-years! Your payment can remain low for the next decade – no matter what happens in the economy. Call a home equity loan expert today at 801.223.7750 or click here to visit us online.
  1. As your not-for-profit financial partner, UCCU works hard to provide you and your family with valuable services, products, and information to help you set and achieve your financial goals. In additional to low-cost loans, free checking, convenient online and mobile account access, the credit union offers valuable services that fit every stage of life. From youth banking services with our award winning BeMoneySmart program, to any investment, insurance, or Medicare need with the UCCU Financial Group, the credit union has you covered. We want to be your “first choice” financial partner.
  1. For a fun and engaging way to teach your family, church, school, civic, or scout group about money, attend a free class from Money Made Easy – sponsored by UCCU. Money Made Easy classes make it easy to learn important financial principles through a series of interactive lessons and hands-on activities. Schedule your FREE class by calling Tom Painter at 801-235-9100 or click here for more information.
  1. The credit union is here to serve your needs. This is the best institution for low rate loans without the worry of changing rates or hidden fees. If you have a loan that is not currently with the UCCU, I personally invite you to call, go online, or visit with one of our loan officers to see about lowering your rate and saving you a lot of money. It’s time to make the move.
  1. Worried about all of the credit card fraud? EMV Chip card technology is your best defense against credit card fraud. When the EMV chip card came out, your credit union jumped on board – which is why we were able to be the first to offer EMV Chip cards to help protect your finances from criminals. Upgrade your card and bring your balances over and get a low 6.99% APR.
  1. If you have any commercial lending needs — either a new loan need or a refinance — our commercial loan professionals can help. Ask about our low rates, quick turn-around, and great terms with no pre-payment penalties.

We look forward to 2015 and appreciate the opportunity to be your trusted financial partner. Take advantage of your membership at Utah Community Credit Union this year.

Thank you for being a member!

Jeff Sermon
President/ CEO
Utah Community Credit Union

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Lower Your Home Equity Payment Today

Consolidate your debt into one loan with one low payment.

With UCCU’s new Low Payment Calculation, you can consolidate your debt into one loan and one really low payment! No-fee home equity lines of credit–with Low Payment Calculation–available right now at UCCU. Only 1.99% Fixed APR for nine months, then 3.74% Variable APR thereafter.

For more information visit uccu.com or call us at 801.223.7650

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Market Rates on the Rise

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Housing rates continue to rise due to a number of economic changes. The market is beginning to recover from the housing crash of 2007 and homeowners are starting to see a silver lining.

According to Quicken Loans VP Bill Banfield, the increases in housing prices will have a positive effect on mortgage holders. “While the increase in home prices is slowing, homeowners have still gained a significant amount of equity in the last year,” he said.

That is why there is no better time than now to get a 10-year fixed Home Equity Line of Credit. At UCCU we want you to feel taken care of. With a Home Equity Line of Credit you can get the money you need to cover important expenses and make your dream home a reality.

Used like a credit card, UCCU has fixed rate home equity lines of credit for 5, 7, & 10 year terms and even a Flex Pay option where you can pay the interest only for 7 years.

Call one of our home equity specialists today at 801.223.7650 or apply online at uccu.com!

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Rates Spur Refinances as Buying Season Begins

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In early June, rates for 30-year fixed home loans were at their lowest in seven months, according to Freddie Mac. Rates had been on the decline for five weeks straight before hitting this year’s lowest yet.

The window of opportunity was certainly welcome for on-the-fence refinancers who previously opted out, found difficulties qualifying, or were unable to recoup significant closing costs. Refinances accounted for 50 percent of total home loan applications in mid-May, up 1 percent from a month earlier, according to the Mortgage Bankers Association.

Interest rates unexpectedly fell this year after the Federal Reserve began scaling back the stimulus that held borrowing costs near record lows since 2011.

Uptick in Prices and Purchases

Lower rates may have also prompted homebuyers to commit to properties, as signed contracts to buy existing homes increased 0.4 percent in April, according to an early June report from the National Association of REALTORS® (NAR). Despite this increase, the group’s expectation was for at least a 2 percent sequential gain. The NAR’s chief economist, Lawrence Yun, said, “Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective homebuyers’ confidence. An uptrend in closed sales is expected, although some months will encounter a modest setback.”

Home prices, and subsequently, values, are also on the rise, as buyers in March paid 12.4 percent more for homes compared with a year earlier, according to the S&P/Case-Shiller index of 20 cities. Prices have been increasing due to high buyer demand and less available inventory, though it’s important to note that home prices are rising at more modest levels this year when compared to last year’s big gains.

Early June numbers from CoreLogic’s Home Price Index (HPI) also reported that home prices, including distressed sales, increased 2.1 percent in April compared to March, and were up 10.5 percent compared to April 2013.

While rough weather was blamed for very slow sales at the beginning of the year, closed sales in April increased slightly—the first month-to-month rise of the year.

The Bottom Line

Home loan rates remain at some of their lowest levels in months. If you have any questions about your personal situation or would like to inquire about housing and home loans, please don’t hesitate to visit UCCU.com.

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President’s Message July 2014

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Americans are using smartphones, tablets, and mobile browsers to access the Internet more than using a computer. To help you manage your money easily and efficiently, we recently launched a redesign of the UCCU Mobile app. The new mobile app for iPhone, Android, and now the iPad provides fast access to your account information anywhere and anytime. The design is more intuitive and of course, is protected by SSL encryption. This app allows you to access your normal banking needs on the go – balances, transfer, mobile deposit, bill pay, and now you can even apply for a loan. Also, you can access Smart Deals – discounts to hundreds of local merchants right from your smart phone. Visit UCCUSmart.com for details. Download or update the UCCU Mobile app today!

Using a Home Equity Line of Credit (With a Fixed Interest Rate!)

For those in a stage of life that incorporates the use of credit and borrowing money, rates have never been better, but we can all probably agree that rates are projected to go up – we just don’t know when. That is why the credit union created a new program, a 10-year fixed rate Home Equity Line of Credit, that helps you take advantage of equity in your home. A line of credit allows you to pull the funds out when you need them, so if you do not have a balance, then you do not pay any interest. Plus there is no cost to you!

Due to the recent rise in home prices you may have equity in your home that you can use for summer projects, big expenses, or just to have a rainy day fund. Speak with one of our knowledgeable Home Equity Loan Officers today at any branch or by calling 801.223.7650 to see if a Home Equity Line of Credit can help you and your family.

Take Full Advantage of Your UCCU Membership

Your membership at UCCU offers you many advantages! Whether you are a saver or a borrower (or both), the credit union has programs and services that will help you achieve your financial goals. Helpful, no-cost, financial planning advice and retirement planning help is available from UCCU’s Financial Group. Our trained professionals can help you put together a plan for retirement, estate planning, insurance protection, and investments – all tailored to suit your needs. Put these services together with a UCCU checking account, VISA debit/credit card, mobile, texting, and other on-the-go banking resources, and you have all the tools necessary to manage your finances, plan your future, and reach your financial goals.

And that, simply put, is why we exist – to serve you and your family throughout your life.

Thank you for your continued trust and the opportunity to serve you!

 

Sincerely,

Jeff Sermon
President/CEO

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Meet Steve

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Have a question about a real estate loan? UCCU has the answer:

Call Steve.

Sounds simple, right? UCCU prefers to think of it as a simple solution to a complex need.

Steve Hart’s official title is UCCU Mortgage Leads Manager. But Steve prefers to think of himself as “The Voice” of UCCU’s mortgage department.

“When it comes to getting a home loan – any loan – most people have a lot of questions,” Steve said. “And when you need help, getting referred to a generic call center or a computer voice can be really frustrating.” UCCU was founded in 1955 on the simple ideal of “people helping people.” And as the credit union grew over six decades, that simple ideal has remained a top priority.

“When you have a question about something as important as a mortgage,” Steve said, “you need to be able to call and talk to a real person. An expert. UCCU understands that. They saw this need and created a position to fill it.”

Today, UCCU offers every type of real estate loan. But while everyone’s situation is different, anyone can call Steve Hart and get the help they need for both residential and construction loans.

So if you’re wondering what your best options are for a home loan, call Steve. If you have a question about a loan you’re applying for or already have, call Steve. If you’re a member of UCCU – or not – call Steve. Steve Hart will answer the phone and make sure you get the help you need.

Steve’s experience with UCCU spans more than 26 years, beginning in the Visa department and continuing through consumer lending, home equity lending, and managing the UCCU Spanish Fork branch. Before becoming “The Voice,” Steve spent ten years working with long-term mortgages.

“That’s one of the reasons this position is such a good fit for me,” Steve said, “I can bring my experience from many different areas to it.”

Steve also loves that he can help UCCU employees as he helps members with their loans.

“I support the loan officers wherever I can,” he said. “If I can take some of the pressure off of them, then they can do their jobs better. It’s a great system that helps everyone.”

Depending on the needs of the person calling in, Steve will either help the person himself, from start to finish, or find the right expert who can provide the assistance the caller needs. Steve also reviews online mortgage applications to make sure they get in the hands of the right people and have everything they need to be successful for the applicants.

“I enjoy it. It’s fantastic. I have a job where I get to help people and that’s what I do,” Steve said. “I pick up the phone. I listen and I give straight answers. It’s an old-fashioned approach to helping people, but it’s often exactly what they need.”

So if you have a question – any question – about a real estate or construction loan, finding the answer is easy. Just call UCCU. And ask for Steve.

Steve Hart: 801.223.7756

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President's Message April 2014: 3 Ways the Credit Union Can Help You and Your Family this Month

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#1 Financial Management 

You may have felt some pressure to be sure your tax, estate, and retirement plans are back on track following the recession – especially just after tax season coming to a close. Make it a plan to become prepared in 2014 with the UCCU Financial Group. The UCCU Financial Group has licensed professionals ready to help you set goals and take the necessary steps needed to reach them. They can help you find solutions and opportunities for investments, insurance, retirement and estate planning. And during this critical time of huge changes in health care and uncertainties in health care coverage options, UCCU Financial Group has specialists who can help you fill the gaps and find coverage for you and your family. They are experts in MediCare and supplemental health care coverage and can help you find the right coverage – and some peace of mind. We also are happy to have Medicare experts giving free seminars about Medicare at our branches. Contact the UCCU Financial Group professionals at 81.223.7502 or visit them online at UCCU Financial Group for a no-obligation, no-cost meeting to explore your needs and options.

#2 Get Pre-approval Before you Shop

Before you go shopping for a new auto loan, get pre-approved at the credit union. Then you know your loan amount, loan payment, and can be sure that you are getting the great low rates at UCCU.

We want to be your source for auto loans. Even if you have an auto loan at another institution, we’ll help you to bring it here to UCCU and even pay you 1% cash back up to $250 to bring your loan to UCCU and possibly even lower your payment. See our 1 Percent Cash Back Program for details.

#3 Leveraging the Equity in Your Home 

With home values finally growing again, many members are taking advantage of the convenience of UCCU’s Home Equity lending programs to take care of home improvements, consolidation, or other family projects. We have every possible option to meet your needs. Members love our no-fee Home Equity Lines of Credit (HELOC) with either variable or fixed rate options.

Visit us online: Home Equity Loan for information, current rates, or to apply online.

Of course, there are many more programs and products available at your credit union to help you and your family reach your financial goals. We feel privileged to be your trusted financial partner and look forward to serving you and providing you “First Choice” quality service and information.

Jeff Sermon

President/CEO

Utah Community Credit Union

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