Week after week can seem like a struggle between you and the all-powerful grocery store. No matter how much you feed it one week, you can be rest assured sure that you’ll be back same time next week. As fresh as some of the items you buy are, they just spoil too darn quickly. What can you do?! Your feet hurt, your wallet is shrinking, and your gas is emptying with ever inch to and from these necessities you have to purchase because this beast of a grocery store’s hunger will never be satisfied. Our last hope is to find ways to make a produce last a little longer. Luckily, for us band of grocery store survivors, we have here a list of ways to make your groceries last longer than usual:

Poke Holes in Your Bags

If anyone catches you poking holes in your grocery bag, before they can call you a crazy person, you can tell them that you are doing it to protect your produce. Plastic bags can produce moisture, and without holes to escape from, the moisture will be retained in the bag which can then hastily break down your recently purchased produce.

Protect Your Produce from Yourself

We get it. Sometimes the produce looks so good that you can barely throw your groceries into your fridge before you cut it up in preparation of next week’s delicious treat. It happens to us too. The problem with doing this is that once your produce is sliced and diced, it doesn’t take long to start to brown. Cutting up something if too far in advanced causes just another aggravating trip to the grocery store. If your hands are tied, you can always use lemon juice to slow down the process.

Freeze Your Bread

Once the onset of mold begins, your refrigerator’s produce is fair game. A lost cause, maybe. If the bread is frozen, then you eliminate the problem of mold. If you really are against having a couple of frozen loafs, you can meet us halfway. Put half in the freezer, and half in the fridge. We’ll all be winners.

Keep It Out of the Sunlight

Your produce is close to being a vampire. We’re pretty sure that your melons aren’t going to rise up in the middle of the night and suck your blood through your neck, but it does come close to burning up when exposed to the sun. Sunlight speeds up the ripening process.

Middle Shelf Your Milk

Your milk is important. First off, it’s delicious. Secondly, you may need it in your coffee, and third, how are your cookies going to go down as well without it? Even if you are lactose intolerant, you don’t want the glorious milk to be spoiled for your milk loving family, so keep it away from
the refrigerator door. It needs to stay cooler than that spot, so plateau it right on the colder middle shelf where your milk will reign supreme.

Butter That Cheese

Cheese is as, if not more, glorious than milk. That is why it is so devastating when your cheese dries out faster than your poor, little mouth can fit and chew it. To prevent this atrocity from happening, apply a little slab of butter on the exposed cheese. Not too much. That may get kind of gross. Just enough butter to keep the cheese nice and fresh for your next dinner party.

Shrink Wrap Your Banana Crown

Nobody likes a spoiled banana. To keep your bananas nice and yellow and fresh, it is useful to wrap up the crown, or stem all bananas are attached to, in plastic. If unwrapped, the ethylene gas from it will rapidly spoil the bananas and any other produce close to it.

For more tips to make your groceries last longer, you can read the full Money Talks News article here.

~Bobby

Hello car shoppers! With low interest rates and pent-up demand, 2014 was a record year for car sales. And the good news for car companies and the economy in general is that the trend is projected to continue in 2015. With the record snowfall and cold temps behind us, members are now converging on local car dealers in the hunt for their next new or used vehicle.

Today we’ll explore the question more & more members are asking: “Should I buy or lease?” According to Automotive News data, approximately 27% of all new vehicles purchased in 2014 were leased. That’s a huge increase in just a few years.

However, while most people lease to get a lower payment, the long-term cost may in fact be higher. So, we need to weigh the pro’s and con’s with each member. Is this particular member better off leasing or purchasing and financing (at competitive low rates) through the credit union? We help members with this decision every day.

First off, our Auto Advisors explain to members that leasing has two major benefits and two major drawbacks. The benefits are; 1) a nice new car for a lower payment and, 2) a new car every few years. While the drawbacks are; 1) a mileage limitation penalizing higher mileage drivers and 2) there’s no elegant way to get out of a lease. Meaning that, if you lease a vehicle and your circumstances change (e.g. new job with a long commute, a baby on the way making that 2 door coupe less useful, or you simply don’t like it), you are pretty much stuck with that vehicle through the term of the lease.

While there are some programs that enable consumers to “lease” used vehicles, leasing is for the most part limited to new vehicles (where the manufacturers are willing to subsidize the cost or and/or the interest rate, thereby lowering the payment). And the projected residual value (i.e. depreciation) plays a big part. So, lesson 1) certain vehicles are better choices to lease than others. Just because 2 vehicles cost the same, it does not mean that the lease payments will be the same.

What’s not appealing about a lower payment? Just remember our rule of auto advertising: “the big print (like $79 per month!) giveth while the fine print (like payment includes $2,995 cash – taxes and fees extra) taketh away.  If you amortize the cash down, taxes & fees into a 24-month lease, the $79 payment quickly jumps to about $250/month.

Next we help members determine if they’re a good candidate for a lease. Such factors include 1) Do I keep my vehicles a long time? (It’s a fact that manufacturing improvements are extending the life of today’s vehicles) 2) Do I put on a lot of miles? (If so, the penalties can be substantial) 3) What’s the likelihood that my circumstances will change? 4) Am I ok with new car excise tax (MA) and insurance? 5) Am I sure I am going to like driving this car for 3 years?

Let’s compare the long-term (say 6 years) cost when leasing vs buying a typical $20,000 car:

Lease N/A Finance $19,500
Cash $1,500*2 leases Cash 0
72 month payments of $275 $19,800 72 month @ 3% = $296 $21,332
Total $22,800 Total $21,332
Equity 0 Equity $6,000

Other factors favoring the purchase & finance include the higher cost of excise tax based on model year (MA), insurance, and the fact you’ll always have a car payment.

And, of course, this assumes you’re buying/leasing a new vehicle rather than used (where somebody else has already paid the higher price, sales tax, excise tax, and depreciation, so you start at a lower entry price, thereby saving even more)! More about benefits of buying used vs new in our next article.

-David Brown, Align Credit Union Auto Advisor

At Align, we are dedicated to giving our Members an easy and flawless experience, especially when it comes to purchasing vehicles. We are proud to offer Auto Advisors as a FREE service; we love it so much that even Align EVP, Tom Hammond, has used the service and has high praises:

“I love using Align’s Auto Advisors program. I have used Auto Advisors to buy cars for my wife, my daughter, and my mother. Recently I’ve used Auto Advisors to buy a new Toyota Highlander from Toyota of Nashua. Each experience was flawless and easy. Over the next three months, Align will be promoting this car buying experience. Any member who uses Auto Advisors and finances the car through Align, the first loan payment is on us. If you are shopping for a car and would like to save time, money and aggravation, I highly recommend this service. My family enjoyed their car buying experience and you can too.”

 Our advisors offer their services from deciding on the most logical car choice based on your needs, to assisting you when it comes time to make the purchase, and any needs in between. You can meet them at the 2 day Member exclusive event April 18th-19th at Toyota of Nashua!! Receive assistance in the best possible deal, enter a raffle, and if you purchase your car using Auto Advisor with us, your first monthly payment is on us! You can contact us at 800-942-9575 to get pre-approved or email the Align Auto Advisors directly at autoadvisor@aligncu.com.

Click here for more information about the 2-Day Car Sale and how Auto Advisors can help you with your next purchase.

Last Minute Spring Break Ideas

March 26th, 2015 | Posted by admin in Uncategorized - (0 Comments)

It’s that time of the year again! SPRING BREAK! Wahoo! Time to go nuts! It’s the week of relief when you wake up when the moon rises above the earth and you fall asleep when it tiredly departs from the horizon. Well only sometimes. Sometimes you don’t have the time, money, or…friends…to do the typical foolish partying that is usually associated with this time of year. So instead of just making Sweatpants Sunday every day while eating ice cream and binge watching seven shows for the whole week, you can make spring break your own fun, bizarre, and inexpensive entity. So, whether you are in the beginning of your spring break, the end of your spring break, wishing it was spring break, middle aged and living vicariously through their child on spring break, or shivering in December wrapped up in a blanket next to your heater and just wishing it was spring, you can take these interesting alternatives to the week:

Have an “Alternative” Spring Break

It’s 2015 and the spring break for the new millennium is starting to become less about beachin’ it and more about spending your own free time helping those in need. The Habitat for Humanity organization has terrific options for you like helping to build a house for someone else. It will even give you a new skill to show off to the friends and family. If building a house isn’t your thing, they are plenty of charities around your area that would love for your assistance. There can be SO MANY charities that you may need some more guidelines on how to make your spring break helpful and self-satisfying.  Cross-Cultural Solutions is just the thing to get tips and to participate in great volunteer work.

Find a Last Minute Deal

Let’s say you do have friends. You can still go on a vacation with them and spend very little money. Yes, it is possible. No, we’re not kidding. There are companies such as Priceline and Last Minute that specialize in helping you find that perfect last minute deal. Get the lowest prices of vacant hotels, the cheapest cars to rent, and the most inexpensive airline tickets. If you are in the college demographic, the company Contiki has last minute specials such as an Alaskan trip, a European bus tour, or a week spent traveling some of Europe’s most popular cities. Even if it is a week alone driving around unseen places and sleeping in your car, you can easily make the most of your experience with the right deals, and it’ll be a great story to tell at the next dinner you go to.

Pitch a Tent and Stare at the Stars

Nothing is as fun and costs the least amount of money than spending a few days in the great outdoors. While this year has been particularly breezy, that isn’t something a fire and some warm jackets can’t fix. Most sporting goods stores have everything you could possibly need for the trek out. From sleeping bags to tents to lights to stoves, pitching in with a group of your friends for the necessities keeps the costs low and not much planning needed. So, bring on the bug spray and take a hike!

Explore Your Own Town

Next time you are lying in bed, grumpy and on Netflix, complaining about how boring a spring break you’re having because there is nothing to do in your town, how about spending a night in the town. Yes, your town. Even the seemingly dullest of towns has a few hidden pieces of gold in it. Maybe not literal gold, per se, but metaphorical gold. From trivia nights at a local hang out spot, to an unexplored path in a woods near your house, to a well-liked restaurant you never took time out to go to, to a night at your town’s spooky cemetery, to karaoke night at the hopping town bar, to bingo night at the town church or fire station, to a special presentation on an interesting subject at your town’s public library, there are TONS of cheap to free activities to keep you busy.

For more information on last minute spring break ideas, you can read the full Travel Channel article here.

~Bobby

How would you feel if one day you were purchasing a brand new 46” TV, feeling on top of the world, all of your finances believed to be in perfect, wonderful harmony, and the very next day you credit card is being cut at the grocery store in front of your family? Possibly crying on the ride home wondering what went wrong. We recently had a blog about the signs in your life that warned you that you are making a poor financial decision. Those signs included listening to nonprofessionals, stress, and spending for want and not necessity. These were the actions that are very noticeable and can be easily avoided. But let’s say you DID avoid those disasters. What happens if you were spending for necessity, weren’t under stress, and really were listening to the right financial experts, yet still overextended your finances that lead to huge problems you didn’t see coming? These are the signals that even the more financially savvy persons either don’t spend enough time paying attention to, or just ignore that can lead to financial disasters:

Struggling to Pay Bills

Here come all the bills in the mail. Oh boy…. This bill here? That one’s important. We should pay this one right away. This bill? Hey. Let’s put that one off. We don’t have the money every week to pay THAT one. It’s not a big deal and we can even save a little extra money by keeping it off. Leave it to the late fees. We’re already paying a lot anyway, may as well just pay the little extra amount when the time comes to it.

This is NOT the proper way to go about your finances, yet 24% of Americans are consistently late with paying their bills as stated in National Foundation for Credit Counseling’s 2014 Financial Literacy Survey. Little by little the bills will pile up more and more, the overdraft fee because more worrisome, and the debt will just keep rising. What happens if your car breaks down on a ride to a very important business meeting, and you no longer have the money to get it fixed? You’re going to start regretting relying on your scapegoat of a work check that kept you from sending the money to pay your bills.

Not Putting Money Down On Purchases

Here’s the American Dream. Getting exactly what you want and paying the most desired price for it. $0. Well, not much is really free. Maybe for the time being, at least it feels great to not put any money down, but if 100% financing becomes your routine, your future bills are going to be 100% horrifying. Put some money down on your next purchase, and your debt will be that much lighter.

More Credit Card Spending than Credit Card Paying

Do you sometimes go month to month with unpaid credit card debt? A lot of people do. 1 out of 3 Americans actually, according to the research the previously mentioned National Foundation for Credit Counseling’s 2014 Financial Literacy Survey. This was conducted by asking over 2,000 adults just last year. It is a nice dream to think that you are making purchases with invisible money, but every purchase has its own consequence. Even a small purchase here and a small purchase there adds up.

Not Monitoring Your Credit

If you have multiple of credit cards or lines of credit, GREAT! Right? It means that you are trusted by your creditors. Well, you won’t be trusted by your creditors for long if don’t properly monitor your credit. That could lead to your credit card being maxed out, problems owning a home, paying a loan which leaves you in potential financial ruin. Always be safe with your finances so you won’t be sorry months to come.

For more information on the signals that you are not in control of your own debt, you can check out the full US News & World Report article here.

~Bobby

There are several common knowledge dangers of owning a house. Yes, some are more easily fixed than others, but at least they are all widely known to still be dangerous. The scariest dangers are the dangers that aren’t as well known to the public. They may be known to have caused trouble here and there, and even maybe looked at on a semi-regularly basis, but these hazards may have caused more trouble than many realize. For your safety and the safety of your loved ones, here are the hazards that come with home owning that you should be more aware of:

Stoves

Lightweight stoves are pretty convenient for everybody. Contractors don’t have to take much time to install them, and the residents don’t have much trouble if they want to replace or remodel them. It is an inconvenience though those lightweight stoves are no problem for tipping over on small children. These types of stoves have the ability to open all the way down and their handles are accessible to a child. It is even possible for a heavy pot of water to be able to tip your stove over. Sears has had a court settlement of millions of dollars due to over 100 deaths caused by inadequate mounting mechanisms. Market Watch has reported recently that it is possible for over 20 million homes to still have this danger with their stoves. Check it out the first chance you get. While checking your stove, be careful of your television as well. These flat screen televisions have caused deaths of over 100 children. It is important to safety check your television every few months.

Gas Lines

Do you know if your house was built between the years of 1860 and 1915? If you do not, then it would be in your best interest to check. If your house was built during that time, then there is a chance that you have a gas line that used to supply natural gas used for lighting. While a good amount have been converted to electric or capped off for safety, others remain dangerous. Market Watch has even reported in the recent article that one live gas line was used as a towel rack. The other danger with gas lines is that over 2 million homes in the United States have corrugated stainless steel tubing which is one of the cheapest options for gas piping. Now this doesn’t have great danger unless the unlikely chance of getting hit by a lightning strike. If hit though, Hole in the piping will burn and a fire may be caused.

Smoke Detectors

The U.S. Fire Administration reports that over 100 million houses in the United States have at least one smoke detector. That is 96% of all US houses. According to the National Fire Protection Association, almost all smoke detectors placed in US homes are ionization alarms. Joseph Fleming from the Boston Fire Department has reported to Market Watch that ionization alarms are responsible for around 30,000 deaths since 1990. Ionization alarms have more trouble detecting fires that are smoldering or slow burning. These alarms are chosen over the safer photoelectric alarm due to their price and their batteries last longer. Fleming also reported that ionization alarms can take twenty to fifty minutes longer to activate than photoelectric alarms. If you do not have photoelectric alarms, it would be a wise choice to invest in a few. Also as reported in Market Watch, it is preferable to have your alarms hardwired by an electrician than relying on your smoke detector’s battery.

Lightweight construction

According to the Wood Truss Council of America, around sixty percent of construction in the United States uses a type of wood truss. Lightweight wood truss is a savior when it helps bring the cost down on many entry level homes, but it is a nightmare if a fire starts within it. Because there are no nails, bolts or screws the heat can just pop off the metal gusset plates used in their place. Fortunately for the safety of everyone, almost all building codes require that when these gussets are used, they must be protected by a sprinkler system. It will keep you a little safer knowing if you are protected by nails or gussets.

For more information of the most dangerous home hazards you don’t notice, you can read the full Market Watch article here.

~Bobby

Mortgages, taxes, loans, cars, vacation, retirement. There are hundreds of financial decisions you will be making in your life. Some of them are going to be significant. Some of them are going to be SO significant that if your decision takes a turn for the worst you will be sitting in your cardboard box outside of the nearest Market Basket thinking about where you possibly could have gone wrong. Alright, it won’t be THAT BAD, but looking on your past decisions, you will notice that there were clues all around you that lead to your poor financial choices. To keep yourself from making one of these decisions and avoid taking up residence in your homeless cardboard box, we have four of the biggest warning signs that you may want to double check your decision:

You Are Spending for Want Not Need

Spending with your heart as opposed to your brain can lead to a whole world of trouble. As the US News & World Report reported, having a convertible is nice, but when you handed the thousands of dollars over and you are driving the car home from the dealer in windy, rainy Seattle, Washington, you have realized too late that you just made a poor choice. Buying on impulse is a major factor when it comes to poor spending habits. Eating a dozen boxes of chocolates after a breakup seems like a good idea at the time, but in the long run it isn’t going to make you feel any better. Next time you see a something you don’t own that starts to make your mouth salivate with desire, first ask yourself if it’s a life or death purchase.

You Are Taking Lessons from a Non-Professional

Ever tell a group of friends or family members about some ailment you have been suffering from and everyone from your date to your clownish best friend to your grandma to your ten year old niece has the correct cure? You may love these people, but you don’t want their lack of medical expertise be the opinions that will treat you. You shouldn’t want that for your finances either. We have financial experts here that have degrees, certifications, and years of experience that dedicate their lives to helping you make the best financial decisions possible for you. Sorry, Grampy. You’re no financial consultant.

You Are Under Stress

When we are in a state of panic we can tend to make a LOT of bad decisions. Some of them, of course, are financial ones. If there is a breech at a store, a stock is plummeting, or loans and bills are piling up then you might make a rash decision. Talk to a financial advisor and come back clear headed so you can take the appropriate action in a stressful situation. This will save you some sweat, tears, and sleepless nights when it’s all said and done.

You Haven’t Done Your Research

We suspect (with good reason to boot) that you are literate. Otherwise it would be pretty difficult for you to be reading this right now. The real question is that are you financial literate? 2,016 adults took Harris Poll for the National Foundation for Credit Counseling’s 2014 Financial Literacy Survey. 41% of survey takers gave themselves a C or a lower grade. Reading up on the top vacation spots is much more fun than smartly planning your vacation finances, but the latter is more important for you the rest of the weeks of the year.

For more information, check out the full US Money News and World Report article here.

~Bobby

Ever spend a night lying awake in bed, eyes closed, trying to get you brain so stop racing, then you look over at the clock. 4:35am. An exhausted moan lets past you lips as you clamp you eyelids shut and turn away from that ugly, treacherous, unending hour of the morning. Hopefully turning away from it will make it not exist. Then your brain acts up even faster. You start thinking about how busy your day is tomorrow and this lack of sleep is going to make you a shambling skeleton. Just trying to think makes you head hurt, and trying to focus on the day makes the back of your eyes ache. Even starting with a freshly brewed cup of coffee from Dunkin Donuts will not prepare you for the eight long hours you have ahead of you. Yeah. We’ve all been there. We love how committed you are and we want you to be as active and successful as you can be, but we don’t want you suffering an early heart attack. Stay productive, but keep your stress levels down. Here are the best techniques to do so:

Learn to Reschedule

It’s true that crossing out that cancelled meeting you were dreading off of your daily calendar can be quite relieving, it is far more beneficial towards you and all of the working professionals connected to the meeting that it is rescheduled. This meeting was important enough that your poor, tired hand pulled open your top desk drawer, reached into, picked up a pen, closed your desk drawer, released the ink tip from its indefinite hibernation, and then stretched out your overused dominant wrist to write it down on your calendar. All of this effort that you had put upon yourself has to have a payoff, right? Rescheduling instead of forgetting about if it’s cancelled gives you enough flexibility in your schedule to relieve stress, but more importantly shows that you will not let important things just drop out of your job.

Strategy is Key

Your strategy should be refined by your calendar. Yes, your calendar. Get the biggest calendar you want if you’d like. If you do not have a calendar, get one. The more tactical strategy you can execute is by starting to fill your calendar by writing in your most important tasks first. After that you then fill in your secondary tasks which can fall wherever they best fit. Pretty easy, right? What this does is gives you priority of your work. By writing in each appointment or meeting, or report due without priority, you are giving every single task intent to overbear you.

Prepare, Prepare, Prepare

While overbooking your schedule, it may look nice to show how overcommitted you are to your job, but exhaustion will catch up to you sooner rather than later. Leave short periods to take a breath, gather yourself, and get your thoughts in order. Look over your speech, presentation, work, or topics of discussion one more time. When more prepared for situations, you are less likely to get overly stress from the lack of readiness, and less will be accomplished because of it.

Relax

As a philosopher once said, “Relax, don’t do it. When you want to, go to it.” Okay , that was actually Frankie Goes to Hollywood, but it is a message we can apply to here. How are you supposed to get all of your work done when the words on your report are getting hazy, the phone keeps ringing, and ringing, and ringing, and the room is spinning? You may need to step out of the building for a minute or ten just to alleviate the pressure you feel starting to bear down on you. Then when you come back, you can go back to your work clear headed.

For more information on how to have exceptional time management, you can read the full Entrepreneur article here.

~Bobby

Today we discuss one of the oldest questions in the past hundred years. It is a question that people have debated, fought, explained, denied, changed opinions on, stayed awake during the long hours of the night wracking their brains about, or even traveled long distances on a journey to try to obtain the definite answer. The question that has daunted philosophers, theorists, psychics, and scientists for so long is a simple one: “Banks or credit unions?” It’s the second oldest question behind, “What came first: The chicken or the egg?” To help guide us through the theoretical mayhem of this debate is a recent article from MoneyTalksNews.com. They listed their reasons why they believe credit unions are better than banks. Naturally, we agree with them, and we listed reasons why we agree with them. Here are some reasons that apply to us and also to you:

Our Convenience

As MoneyTalksNews.com correctly states, though credit unions may not be open every hour of every day, we still use every hour we are open to help you with whatever financial issue you may have. You can be rest assured that you have a friend in us. Most of our branches’ hours are Monday to Thursday from 8:30am to 4:30pm, Friday from 8am to 6:30pm, and Saturday from 9am to 12pm. Our Cross Point branch is open Monday to Friday from 7am to 3pm. You can check out our website for drive thru hours, as well. If you don’t want to drive to us, that’s fine too. You can seek help from us from the comfort of your own home. While our branches are open, you also have an option to contact our Member Care Center who is always more than happy to take your calls!

Our Structure

We may be workers here, but this is YOUR credit union. You own part of this. You have a voting right along with every other member at this credit union. We are a not for profit organization, so we are here for you, not what’s in your wallet or purse. All of the products and services we offer are for your benefit and convenience. Lastly, credit unions generally have excess funds returned with higher dividends. Don’t understand what the means? We have people here to walk you through that and whatever other benefits you are entitled to!

Our Fees

Lower expenses? No overdraft fees? Count us in! To become a Member here at Align, all you need is $25. That is a business weeks’ worth of coffee, and that makes you a Member for life. Banks can sometimes start throwing nonsensical fees every which way at you, but us credit unions like to treat our Members with respect. No worrying about your minimum balance. We won’t charge you a monthly maintenance fee. MoneyTalksNews.com praises credit unions lack of fees, and we are proud to stand behind that notion.

Our Motive

Do you know our tagline? Say it! No cheating!

Correct! We are very proud of you. Go buy yourself something nice. You deserve it. Our tagline is: “Connecting all your banking needs.” What do you take away from that? To us, it explains to our Members that we will use our expert guidance to give each and every Member the customized banking experience that fits your lifestyle. It’s our tagline, it’s our mission, and it’s our vision. MoneyTalksNews.com writes that it is credit unions that make sure their Members needs and interests come first where banks abide more by their own financial needs, and we couldn’t agree with them more.

For more reasons why MoneyTalksNews.com considers credit unions better than banks, you can read the full article here.

~Bobby

5 Things to Know About Mortgage Insurance

February 12th, 2015 | Posted by admin in Mortgages - (0 Comments)

In general, there are 2 types of mortgage insurance.  Mortgage insurance available through the government for FHA and VA loans and mortgage insurance for conventional loans which is purchased from a private carrier (this is called private mortgage insurance or PMI).  The type of mortgage insurance required will depend on the type of mortgage you get. Private mortgage insurance is required on loans where the borrower is putting down less than 20%.  This insurance protects the Lender in case the borrower is unable to pay the mortgage but also has borrower benefits! Keep in mind, an individual CAN purchase a home without a 20% down payment but they will required to purchase PMI. So what other questions do you have about mortgage insurance? Here are some of the answers you may be looking for.

1.    Who is required to have mortgage insurance?

On a conventional loan, if your down payment is less than 20% of the value of the home or purchase price (whichever is lower) a lender will require you to carry mortgage insurance.  Usually you pay these mortgage insurance premiums until your loan to value reaches 78%; at that time the PMI fall off.  On government loans (FHA, VA) mortgage insurance is normally required regardless of the LTV (loan to value).

2.    What does mortgage insurance cost?

Conventional mortgage insurance rates vary… usually the lower your down payment and/or the lower your credit score the higher the monthly premiums will be.  FHA loans have an up-front MIP (mortgage insurance premium) AND a monthly premium.  VA loans have an up-front fee but no monthly premiums.

You will pay your mortgage insurance premiums monthly as part of your monthly mortgage payment.  Lenders may also allow you to pay your PMI as a lump sum at closing, this is called single premium mortgage insurance.

3.    Why do I need mortgage insurance?

Your lender requires you to have mortgage insurance so that if you can no longer make payments on your mortgage, the lender will still get paid (through the insurance policy). Mortgage insurance is protecting the lender in case the borrower defaults.

4.    How can I avoid paying mortgage insurance premiums?

If you put down 20% or more when you are buying a home, you can avoid paying mortgage insurance on a conventional loan. Once you’ve built up enough equity in your home, you can request to cancel it. There are other programs available; contact me to discuss those with you!!

5.     When does mortgage insurance “fall off” the loan?

Once the borrower has built up 20% equity in the house, the mortgage insurance policy usually may be canceled.  The lender won’t automatically cancel PMI until you’ve reached 22 % equity base on the original appraised value or purchase price.

If you have any questions about private mortgage insurance or purchasing a home, feel free to reach out to me at 978-275-2755!

Stay Warm and Think Spring!

~Amy Spindler

Sr. Home Financing Consultant