Common Myths to Mortgage Lending

April 17th, 2014 | Posted by admin in Uncategorized - (0 Comments)

Recently, I had the pleasure of speaking with someone who was telling me how he had been preparing to buy his first home for the last five years.  Over that five year period, he was able to save enough money for a 20% down payment, used a free credit reporting agency to monitor his credit scores, and kept a watchful eye on fixed mortgage interest rates.  He did everything he had been told to do in order to put him in a place to buy his first home.  I applaud his efforts and will congratulate him on his new purchase, rightly so, however, his situation made me wonder if some of these common mortgage myths prevented him from obtaining his goal sooner.

1. Adjustable Rate Mortgages mean “Subprime Lending”

Not too long along, there was an epidemic of mortgage loans made to the more “at-risk borrowers” (i.e. lower credit scores, little or no down payment, higher debt-to-income ratios) known as subprime lending.  One of the biggest products offered within subprime lending was the Adjustable Rate Mortgage, as known as an ARM.  An ARM is one where the interest rate is fixed for a specified length of time and then adjusts periodically thereafter for the remaining term of the loan.  Many lenders used these products to offer an introductory period with a very low rate, which then moved to frequent adjustments, resulting in higher monthly payments.  This causing homeowners to no longer afford their mortgages.  This phenomenon was one of the biggest culprits to the housing market crash, giving ARMS their bad name.  With that being said, there are good ARM products out there, offered by lenders that qualify borrowers, not just on the start rate, but on the adjusted rate as well, projecting that the borrower will still have the ability to pay his mortgage, even if the rate does adjust.  Of course, a fixed rate, which is one where the interest rate stays the same for the entire term, is great option; however it may not be the best option for everyone.  This is especially so for the buyers who plan on living in the home for a shorter period of time reasons such as expanding, downsizing, or relocating could cause a home owner to only need a mortgage for five or so years.  If that is the case, an ARM product with a fixed period of five years or more, at a lower interest rate may save the homeowner a substantial amount of interest over time. Even if the future is not crystal clear, beyond a five year period, it may still be something to consider would discussing mortgage options. Taking advantage of a lower interest rate, typically found with the ARM programs, and applying some of that monthly savings to the principal of the loan, will not only pay the balance down quicker, but it will also create equity faster.  Reviewing the terms of the ARM that is being offered and understanding how the loan works is crucial. The Consumer Financial Protection Bureau recently updated the Consumer Handbook for Adjustable Rate Mortgages and it is great resource to those unwary of these products.

2. You Must Have a 20% Down Payment

While having a full 20% down payment is wonderful, it may not always be an option, especially if the goal is to become a home owner sooner than later. What people should realize is that there are other options out there. Opportunities such as loans with private mortgage insurance that require a much smaller down payment, down payment assistance programs, Mass Housing loans with “No MI”, and seller credits are all great alternatives.  Down payment assistance programs are a great way to get some extra money to use towards purchasing and, in many cases, don’t require repayment.  These can be offered through a mortgage lender or through the City or Town that the property is being purchased in.  It would be wise to contact the City directly and ask about the down payment assistance options.  Mass Housing also offers some great products including an option to not pay private mortgage insurance and still finance up to 97% of the purchase price.  While these are options are very attractive, there are income restrictions, so it is best to contact a lender who offers these products directly.  Seller credits are also a great way find some extra money.  These would be negotiated within the purchase and sales agreement and in most cases can cover the buyer’s settlement charges, such as closing costs and taxes, up to 3% of the purchase price.  This is a great way to maximize your funds towards buying a home.

3. Private-Mortgage Insurance (PMI) is Bad

Private mortgage insurance, or PMI, is an insurance that a lender obtains on loans with less than 20% down payment.  The idea is that the closer the loan amount is to the purchase price, the more risky the loan is for defaulting; therefore riskier to the lender.  The important part to understand is that a borrower only pays PMI while they are financing above 80% of the value of the home.  If a borrower initially is paying PMI, but is able to make a large principal payment later on, the new balance may be at a point where PMI is no longer needed.  This same situation can be said if the value of the property increases, after it was purchased, and when compared to the existing loan balance, it is determined that there is now more than 20% equity.  In that case, PMI may also not be needed.  A borrower would need to check with the mortgage lender to determine if the PMI is still required, but in many loan programs, it is an option.  Another thing to understand about PMI is that the initial amount required to pay is relative to the down payment. For every 5% increment a buyer gets closer to the full 20% down payment, the less amount of PMI is required.  For example, a borrower who is putting a 15% down payment on a $300,000 purchase price may only pay $47 a month in PMI, whereas the person putting down only 5% on a $300,000 purchase will pay $128 a month.  Lastly, PMI has different payment options.  Most lenders give their borrowers an option to either pay the required PMI in either monthly payments or a single premium, lump sum.  As mentioned previously, negotiating a seller credit within the purchase and sales agreement can be beneficial to the buyers purchase potential and can be used to cover buyer costs such as a PMI.  With all of this being said, PMI may be a requirement in many cases for loan approval, it doesn’t necessarily mean that it is bad.

4. Applying for a Mortgage is too Hard

Too much time, too many questions, too much paper work. Right?  Buying a home may be the biggest purchase you will make and just as serious as you take this purchase, so should the lender.  The lenders job is to make sure that you can afford your new home and that you’ve budgeted appropriately to make the timely mortgage repayments.  In order to do so, a lender will need to get a clear picture of your financial profile, including income source, monthly debt, and assets that can be used for future home maintenance, etc.  While it may seem like the lender is asking for a pint of blood and your first born child, they are only trying to create a full picture of what your mortgage capacity should be.  With that being said, the process doesn’t need to be painful.  A good lender will be available to discuss mortgage options, walk you through the entire process, and be there to answer your questions.

If you have any questions about the home buying process, please contact our Home Financing Department at 800-942-9575.

~Erin Kelly, AVP Mortgage Operations

Smart Choices in Your 20′s

April 10th, 2014 | Posted by admin in Uncategorized - (0 Comments)

As someone in their 20’s, I can honestly tell you this is a time to explore, find what you’d like to do with your life, make some mistakes, and most importantly, figure out how to rebound from those mistakes. While your 20’s can be a complete roller coaster, it is still essential that you make good choices so financial uncertainty doesn’t carry through to your 30’s or longer. Follow these 5 tips to ensure a strong financial future.

1. Make Goals

If you are still in college, it is understandable that you might not have much to save, but every little bit counts. Create a budget determining monthly bills and spending and then make an allocation to sock away to your savings. Make short-term and long-term goals and determine which take priority; this will help you to stay on track.

 2. Start Saving for Retirement

So you’ve started your first job and the natural thing on your mind is that retirement is 45 years away! It might sound crazy to start a retirement savings now but it is essential to contribute. This allows your money more time to grow. Even a small contribution can make difference when growing over 45 years.

 3. Living Within Your Means

When you graduate college and start earning your first full time paycheck, you are going to think you have more money than you know what to do with. I can tell you, that feeling goes away REAL quick when you have to pay rent, car payments, insurance, student loans, and the list goes on and on. After your monthly expenses are paid and you’ve made your savings contribution, you may have some discretionary left over. It’s ok to spend some of what’s left over on things like traveling but when booking trips or buying new things, make sure to only make purchases that you can afford and not over extend yourself.

4. Pay Off Debt

More often than not, students are graduating college already in debt after paying for their education. In addition to your budget and savings goals, you should determine a plan for paying down your debt especially if you’ve racked up credit card debt or other high interest loans.

5. Take Care of Yourself

This might not sound like financial advice but it could definitely lead down that road. Eating well, staying physically active, and attending regular doctors’ visits could prevent you from paying exorbitant medical bills in the future. So get into good habits now and live a healthy lifestyle that you will be able to maintain well in your 30’s, 40’s, 50’s and so on.

To learn more about how to protect your financial future in your 20’s, please visit the wallstcheatsheet.com.

~Karen

When you first bought your auto and home you probably called a few insurance companies and agents to get a quote on the cost of insurance for your new purchases. Maybe Mom and Dad have used the same agent for years and you called them first and looked no further or ventured on line and clicked away at coverage.  If it has been more than 5 years since you last looked at your insurance coverage (s), it might be time for an insurance tune up.   Companies are all competing for your business and how they do that is with target marketing, added endorsements to enhance your policy, accident forgiveness and many more intriguing ads all to entice you into being with them.  However, what is best for you?  Your life has changed since you bought your first auto and/or home, maybe you got married, had kids, your financial position has changed or maybe you are about to retire.  Change is always going to happen, you have changed, your lifestyle has changed, but what about your insurance; has that changed?   If not, maybe you should take a little time to go over what you have and don’t have with your agent and it’s free!

Here are some tips on how to get the most for your dollar on your auto and home insurance:

  • Combining your insurance with one company can give you a substantial savings.   Insurance carriers no longer want just auto or just home so they dig deep to give discounts for combining them.  Even if you don’t have a home and rent, adding a renter’s policy may save you more than what you are paying for just an auto policy.
  • If you think having the lowest liability limits on your auto policy will save you money then think again. Some carriers will actually charge more for less.  When you carry higher limits an insurance company will look at you as a good risk.
  • Having a higher deductible on your home policy will save you money in two ways, first going from a $250 deductible to $1000.00 can save you hundreds yearly, depending on the carrier.  If you have a higher deductible it prevents you from putting in the smaller claims that insurance companies may penalize you with a non-renewal or an increased premium, if you have a few claims.
  • If you just got married, you and your spouse have separate auto policies but if you combine them to one policy you will receive a multi-car discount. This can be a great savings.
  • If your life has changed since you started your insurance policies you will want to look at your liability portion of those policies.  If you are making more money, have children that drive or have that vacation home, these are life changes that you would want to talk to an agent about.  They can help you to determine what you should have for liability.  All it takes is one claim to wipe out everything you worked hard for.  If you don’t have the right liability to protect those assets you could be in trouble financially.
  • Lastly, ask your agent what is available to you for discounts.  They know the companies they write with and what may be a good company for one person’s life style may not be good for you.  Your agent will know what matters to you and how to protect your assets, save you money and add endorsements to your policy to enhance your coverage for less.

If you haven’t thought about your insurance in a while, now may be the time.  Having one free conversation with your agent could be a savings for you and giving you the protection you need.

LeeAnne Powers, Insurance Center of New England

Selling Your Home

March 20th, 2014 | Posted by admin in Uncategorized - (0 Comments)

 

Whether you believe it or not, today is the first day of Spring!  Bring on the longer days, warmer temperatures, and the Spring home buying season!  Although it may still look and feel like winter, now is the time to decide whether or not you are going to list your home for sale.  Here are some tips to get your started!

1. Is the market right for you?

According to a recent article published by MSN.com, 2014 Housing Outlook, home prices are on the rise in many areas of the country; however, that may or may not be true for the area that you live in. For the most part, home prices are based on supply and demand.  Influences, such as, employment, education, and religion, all play a role in the desirability, or demand, of your home.  Before you decide to list your home for sale, it is best to do your research and find out what the demand is in your area.  Searching websites such as Zillow and Trulia can help you determine what the average sales price is in your area.  Other ways to research the market would be to contact your local Realtor and ask for a market analysis.  You may have heard that your next-door-neighbor was listing their home for $400,000, but did you also hear that it only sold for $300,000?  This is the information that you want to know.  Also, depending if you have a mortgage or not and what the current balance is, can greatly impact the amount that you need to sell your house for. Doing your research up front can help eliminate unrealistic expectations.

2. Working with professionals

For Sale by Owner, or FISBO, is something often seen throughout the Real Estate market.  Many homeowners are looking for cost-effective ways to list and sell their homes.  Although this may sound like a good idea at first, cutting out the middle man and avoiding commission fees, it can often result in longer listing times and less profit.  A Realtor is someone that has the expertise to navigate through the entire process of selling, while keeping the homeowner’s best interest at heart. Listing the property for the best price, negotiating a sales agreement, and keeping the closing timeline on schedule is the role of the Realtor.  Other important professional roles in the home selling process would be the Real Estate Attorney, as well as the mortgage professional.  A Real Estate Attorney will ensure all legal aspects, in regards to transfer of ownership, are handled properly, including the review of the current title and verifying all outstanding liens.  A mortgage professional is someone that will work directly with the potential buyer of your home, to ensure they are pre-approved and are able to meet all financial contingencies.  Working with industry professionals helps create a cohesive approach to selling a property, leaving you as the seller more time to focus on other aspects, such as moving and packing.

3. Home Improvements

Another thing to consider, when deciding whether or not to sell your home, is if home improvements are needed to attract the new buyer. The floors are a mess, the walls need paint, and the roof is falling apart.  What do you do first?  Again, a good Realtor should be able to help you determine which areas of your home could be of concern and which areas should be left for the new homeowner to design.  If it is decided that improvements are needed, you should ask the question is this something that you should spend your own money on or adjust your purchase price accordingly.  Articles such as 10 Best Improvement for Your Dollar can also give you some great ideas on what is and isn’t important for a sale.

4. New house

You’ve decided to sell.  Now, the fun part!  Searching for the new house.  When I was a kid, we were in the process of selling our family home and moving into a newly built home.  We were going from an antique house built in the 1800’s to a custom built home with modern characteristics.  While we were waiting for our “old” house to sell and our “new” house to be built, there were many conversations that began with the words “In the new house”, creating a great anticipation for moving, into what we as kids envision to be something out of The Jetson’s.  Looking back, I can see the characteristics to which my parents thought were important in a home, may have been unique to them, but also practical and long lasting.  Some things to consider when buying a new home, in regards to functionality, are things like cost-effective heating systems, tank-less water heaters; as well as updated windows and insulation efficiency.  All of these can save you as a homeowner thousands of dollars, as well as be great benefits for resale in the future.  Other more personal characteristics to think about when considering a new home would be school districts, recreational and cultural influences, and public transportation.  Enjoying your neighborhood is an essential part to enjoying your new home.

Lastly, the decision of selling your home is not only financial but emotional.  If you’ve done your homework, weighed your options and the time is right for you to sell, go for it and good luck!

~Erin Kelly, AVP Mortgage Operations

Chow Down on the Cheap

March 6th, 2014 | Posted by admin in Uncategorized - (0 Comments)

Constantly eating out can be a huge financial downfall. The problem is, I don’t know anyone who doesn’t enjoy dining out. In our society, it’s the way we socialize with friends and family whether it’s a mid-week girls night out or celebrating a birthday. However, a restaurant meal can easily cost $20 per person and that’s not counting drinks, apps, dessert, tax, and tip. You can see that dining out often can really take a chunk out of your budget. As much as I’d like to say refraining from eating out is the solution to this problem, that’s not a realistic solution. Instead, make wiser decisions and try to dine out on the cheap.

Here are some tips:

Don’t Drink Your Money Away

One of the first questions your server will ask you is, “what can I get you to drink”. If you’re looking to save a few bucks, the answer is simple. “Water, please”. And no, not the nice bottle of Pellegrino, just a glass of tap water. Drinks, whether they are alcoholic or non, can really add to your dinner tab so try and stick to complimentary water.

Share a Meal

As we all know, most restaurants serve large portions that can easily feed more than one person. Save yourself money and calories and split the meal. If you think you want a little something else, order a side salad.  On the same idea, order an appetizer as your meal. It’s a smaller portion and priced less.

Look for Kids Deals

The cost of dining out is not very conducive to a family with multiple children. However, there are many restaurants where kids eat free on certain days. Do some research and take advantage of these deals.

Daily Specials

Make sure to visit your local favorites when they have specials like 10 cent wings, or ½ priced nacho nights, etc. Doesn’t the food always taste a little better when you know you’re getting a sweet deal?

Online Daily Deals

If you visit sites like Groupon and LivingSocial, you probably notice deals at various restaurants, some might even be your local favorites. When buying these deals, make sure to read the fine print because most come with minimum purchase requirements and other limitations. However if the fine print looks good you might get away with paying $25 for a $50 meal, etc. Also, a new Groupon feature to look into is reserving a table through their site. You will get a discount and no voucher is required.

Hope these tips help you keep your tab in line. There are many ways to cut back while still enjoying a nice meal with some friends. For more ways to save, please visit the full US News and World Report article.

~Karen

When you’re 18 years old, prom is supposed to be the best night of your life. Graduation is around the corner and it’s one of your last chances to dress up and celebrate with the friends you’ve known for most of your life. Many teenagers anticipate prom for years, but with costs rising, many teenagers can’t afford to attend and lose out on the chance of celebrating. According to ABC News, the 2013 Prom Season saw a 5% increase from the year prior and that will continue. They also reported that the average cost of attending prom in New England is over $1,500. Now I would be the first one advocating going to prom if you can afford to do so, but $1,500 is A LOT of money and the simple reality is that more and more teenagers (and their parents) don’t have that kind of money to spend on a dance.

Now you might be thinking “what in the world costs $1,500”? Well, according to promgirl.com

Tickets: Tickets can range anywhere from $20-$250 depending on location, venue, if dinner is included, etc.

Beauty: Girls will probably get a mani/pedi and their hair and makeup done. This can all range from $30-$275.

Prom Dress: Dresses range anywhere from $100-$400. Now tack on alterations, shoes, and accessories.

Flowers: A boutonniere for your date can cost $10-$20.

Formal Photography: Add on another $30-$125

Limo Rental: The total cost of riding in style can range from $200-$500. This cost will reduce if you split the cost with a group of friends.

There are definite ways of saving and some cost cutters are fairly obvious. Paint your own nails, do your own makeup, and maybe visit a hair school that will do an up-do for a reduced price. Really think if a limo rental is necessary and maybe ask a family member to take some nice photos of you (and your date) before heading to the event. This should significantly reduce your costs; however, dress prices can be enough to still deter girls of being able to attend.

Luckily, Align’s Hale St. Branch is teaming up with Anton’s Cleaners to help provide gently worn dresses to local teenagers who wouldn’t otherwise be able to attend prom. If you have a gently worn prom dress just taking up space in your closet, consider bringing it  down to the Hale St. Branch from now through March 29th. Anton’s Cleaners will make sure those dresses are cleaned and given to local girls in need.

So take a look in your closet and check for any old prom dresses, bridesmaid dresses, or even cocktail dresses that you don’t have a need for anymore. Attending prom seems like a simple luxury to some but for many it’s a celebration they won’t be able to participate in without your help.

~Karen

Is Your Mortgage Pre-approval Real?

February 20th, 2014 | Posted by admin in Uncategorized - (0 Comments)

Recently, a Realtor asked her First Time Home Buyer (FTHB) “Is this pre-approval letter real?” to which the FTHB replied, “How do I know?”  Good question.  With a lack of real estate inventory and surplus of home buyers, many professional Realtors are not willing to take a chance and risk their reputation with a FTHB that hasn’t been pre-approved with a credible mortgage lender.  When it comes to a mortgage pre-approval letter, a FTHB should ask the following questions:

1. When is the right time?

Getting a pre-approval letter is one of the first steps before taking the leap into homeownership. Knowing when you are ready is key.  The U.S. Department of Housing and Urban Development offers a consumer guide to Homeownership that helps buyers decide if they are ready.  How much can you afford? How much are you willing to spend? Where do you want to live? When do you plan to move again? These are some of the critical questions that need to be answered before the pre-approval letter is written and before the home search begins.  Knowing what you are looking for helps determine what your purchase price should be and what mortgage product may be best for you.  For example, if you decide to opt out of a self-maintained property and go for a high-end condominium that offers landscaping, snow removal, and 24 hour concierge service, don’t forget to factor in the monthly Homeowner Association fee when deciding on your budget.  Or, if this home purchase is going to be a starter home, with the plans to move in the next five years, an Adjustable Rate Mortgage with a lower start rate, may be the best way for you to go.

2. Where do I go?

Deciding to buy a home is a big decision and having the right partners along the way is just as important.  A pre-approval letter can be obtained from a mortgage broker or a direct mortgage lender.  The difference between the two is that a mortgage broker does not lend its own money, nor does it service the loan.  Instead, a mortgage broker works with multiple lenders to find a loan for you.  A benefit to the mortgage broker is that they usually have access to a broad spectrum of mortgage products; however, typically they charge a fee or higher interest rate to do so.  A direct lender, such as a bank or a credit union, lends its own money and has the option to continue to service your loan after it closes. For the most part, all lenders are able to offer the same array of products usually at the same interest rates.  The deciding factor of which lender to choose should not necessarily be based on who has the absolute lowest interest rate, but more so on the relationship you have with that institution.  Questions to consider might be: Do you trust them?  Do they have products that meet your needs?  Were the products and process explained to you?  Will they be there for you after you buy your home? The lender that you decide to work with should be available when you need them, follow up throughout the process, and most importantly be able to meet the time and date commitments associated with your purchase.

3. Why does it matter?

You’ve found it! Your first home, your dream home!  Now, it’s time to make an offer.  The problem is, you are not the only person who sees a future in this house; so do numerous other people as well.  The Realtor is obligated to present all offers to the seller; however, an offer from a buyer with a great pre-approval letter has an advantage.  A pre-approval letter specific to the home in question, along with criteria showing the credit worthiness of the buyer is a must.  If a pre-approval letter states items like income and assets are still to be verified, that implies there could be undiscovered issues, which could possibly delay or prevent the financing.  The last thing a seller wants to hear just days before closing is that the buyer’s mortgage financing has fallen through.

4. How long is it good for?

Keeping your pre-approval letter up-to-date is just as important as keeping your resume current.  You never know when that dream job, or dream home, will come along.  Typically, a mortgage pre-approval letter is good for 90 days.  After 90 days, the credit report will expire and a new credit report will need to be reviewed.  Since house hunting can sometimes take longer than that, it is a good idea to mark your calendar and call your loan officer when your pre-approval letter is about to expire.  Keep in mind, major life events can also impact your pre-approval, such as new job, new car payment, or new marital status.  It is always a good idea to disclose this information up front, in order to avoid obstacles later in the process.

Remember, home buying should be enjoyable.  Just as you would take your time picking out the neighborhood you want your kids to go trick-or-treating in, same should be done when deciding to get pre-approved.  Do your research, ask questions, and most importantly, have fun!

~Erin Kelly, AVP Mortgage Operations

How to Slash Your Wedding Budget

February 13th, 2014 | Posted by admin in Uncategorized - (0 Comments)

Weddings are a big business. Some weddings cost the equivalent of a down payment on a house. While every couple should have a special day, you shouldn’t have to spend your life savings and accrue debt just for a beautiful wedding. When it comes to planning your wedding, there are many ways to keep costs down and if you start to feel like you’re spending a little too much, check out these way on how you can slash your budget.

1. Borrow instead of Buy

Something new, something borrowed. Chances are you have many friends and family members that have gotten married before you. Instead of buying everything new, ask someone close to you to borrow a veil, a necklace, or a pair of earrings. The people close to you might have some perfect pieces to contribute to your wedding look and it might be nice to have that with you on your wedding day. Also, ask friends and family if they have card boxes and other decorations that fit the look and feel of your wedding.

2. Negotiate

Some of your vendors might have firm prices but you’ll never know if you don’t ask if they can offer a better deal. You might be pleasantly surprised when they offer to do the job at a discounted rate. Ask your photographer if they will give you a break on their album prices. They might even be able to throw in a free engagement session. Ask the band if they will play cocktail hour in addition to dinner and dancing. This way you won’t have to hire extra entertainment.

3. Work with Your Venue

Think of your wedding as many business partnerships. Relationships build when venues refer brides to certain clients and vice versa. Once you book your venue, always ask for a list of their preferred vendors. This list will refer for to everyone from DJ’s, to bakeries, to florists, and way more. Chances are you can get discounted rates from the preferred vendors simply because the venue refers business to them all the time.

4. Do-It-Yourself Projects

In the age of Pinterest, brides can get really crafty with their wedding décor and possibly recruit their bridal party to help with the job. Personally, I’ve been a bridesmaid in 2 of my best friends weddings and have helped on a few DIY projects. It’s a great bonding experience, especially if you’re not too familiar with the whole bridal party and when you see everything come together at the wedding, you have a great sense of accomplishment.

5. Ask Your Friends to Get Involved

If you have some talented friends, ask if they would be willing to play a bigger role in your wedding. You might know a great baker that can do your cake. One of your friends might know how to do really great hair and makeup. Does a friend take really great pictures? Ask them to take a few engagement pictures of you and your fiancé. Don’t expect your friends to do this for free but they could probably do the job for way less than what you would pay someone else.

Every couple deserves a special day but remember, a wedding is only one day. Spending your life savings and accruing debt can give you a rough start to your marriage. Set a budget, set priorities, and remember you can still have a beautiful wedding without paying high prices.

~Karen

*Blog based on MSN Money article.

At Align Credit Union, we take the issue of security and privacy very seriously. Unfortunately we’ve been hearing about more and more scams and fraud attempts and it seems like hackers just don’t give up. In fact, as technology continues to advance, hackers will just be more innovative in the way they crack the code and get access to personal and account information. We feel that we can help prevent our members from becoming victim if we provide beneficial tools and resources so you can be educated about the various scams happening and be proactive about protecting your information. For those tools and resources and for a list of various current fraud alerts, please visit our security and privacy page.

In regards to hackers, one of your natural questions might be “how do I get hacked”. A recent ABC News article answered this exact question.

1.      Phishing

Those with email accounts are probably very familiar with phishing. This is when you receive a suspicious email from what appears to be your financial institution, an email provider, an online merchant you’ve previously done business with, or even a friend or family member. Typically these emails look like they come from a trusted source and ask for more personal information or even account information. These emails could also cause trouble if you simply click on the links included by installing a virus or malware.

I actually received an email like this just a week ago. It looked like it came from an acquaintance that needed money because they ran into some trouble while on vacation. Luckily I knew not to respond but there have been cases where sensitive information is given. Please remember not to click on anything from unfamiliar email addresses. Also, if you do believe a trusted source is trying to contact you, reach out to them directly. For example, if you believe your financial institution needs to speak with you, type in their website address directly and call the contact number listed on their official website.

 2. Spear-phishing

Spear-phishing is similar to phishing except it is much more targeted. Hackers go through lists of contact data and look for those who they think are more vulnerable. These emails might look more tailored to you because these hackers are targeting you in particular. Use the same precautions as above; do not click on unfamiliar emails or links within those emails

 3. Vishing

Vishing is when hackers collect telephone data. You might receive phone calls claiming to be from your financial institution, asking you to provide account info, debit/credit card info, Social Security Number, etc. NEVER give out any type of account information and if you accidentally do, please contact Align immediately so we can take the necessary precautions to protect your account.

 4. Smishing

Like I said earlier, as technology progresses, hackers will also be more innovative. Smishing is the perfect example of this as hackers are now taking advantage of texting. Hackers are able to disguise their number to look like they are from a trusted source and ask you to open links that install malware and viruses on your smartphone.

We hope that this helps you understand how important it is to protect your information and that hackers are very resourceful. They will find a way in if we give them even the slightest opening. Please visit our security and privacy page regularly to become aware of the current scams happening and if you ever need assistance, we are happy to help. Please contact Align at 800-942-9575.

~Karen

It’s cold outside.  Time to think spring and find out what’s hot and what’s not for mortgage lending in 2014. Let’s start with what’s not.

The Consumer Finance Protection Bureau’s (CFCB) new mortgage rules may make it harder for buyers to qualify for mortgage loans1. After six years of trying to recover from a depressing housing market, a new set of guidelines were put in place on January 10th, 2014 to help regulate and create consistency throughout the mortgage lending world.  While these rules were developed in hopes to help breed better homeowners, it may also have a “backlash” by limiting the number of buyers qualified for a mortgage, therefore, delaying the housing recovery even more.

Another not is less Real Estate inventory on the market.  With the uncertainty of the housing and job markets, many homeowners have decided to stay in their homes longer and put off their plans of upgrading, downsizing, or relocating.  This has caused a downward trend in new home sales and new construction, again, making it more difficult for the new home buyer.

What’s hot? Portfolio lending! A portfolio lender is one that originates and services a mortgage loan.  By holding the loan “in-house” the lender has more ability to customize a mortgage loan to fit the need of the buyer2. They also can service the needs of the borrower more easily by providing knowledgeable staff with “real” time information.

Another hot is Home Equity Lines of Credit.  For the homeowners that do have plans to list their homes for sale in 2014, a Home Equity Line of Credit is a great way to leverage the equity in their existing home to finish those much needed home improvements.  A good Home Equity Line will have no fees, low rates, and may be tax deductible.

Getting pre-approved! Now more than ever, having a mortgage pre-approval letter in your hand is definitely considered a “hot”! With fewer homes on the market, more buyers are in competition with each other trying to “win” that home.  Real Estate brokers don’t want to waste their time, or the seller’s time, with offers from buyers who don’t qualify.  Even more so, the lender that is issuing the pre-approval letter is important.  A lender who has a reputation of being easy to work with, thorough with their up-front loan qualification, and known for meeting all the contingency dates, is a lender that Real Estate brokers are more likely to want to work with.

Have any questions? Contact Align’s Home Financing Department at 800-942-9575.

~Erin, AVP Mortgage Operations

1http://www.consumerfinance.gov/mortgage-rules-at-a-glance/

2https://www.aligncu.com/mortgages.php