Credit is one of the most important aspects of a person’s financial life. Good credit can make all the difference in purchasing a home, buying a car or getting a personal loan. Unfortunately, many Americans suffer from poor credit. A low credit score can make life much harder, and it’s important to always strive to improve your credit history.

Working to improve your credit is definitely a positive, but be wary of schemes that seem too good to be true. Credit repair scams lure in people with promises of improving their credit scores only to take their money and leave them worse off than before. Luckily there a number of ways to spot a credit repair scam.

Spotting a scam  
One way to spot a credit repair scam is a lack of available information. First, you’re supposed to be provided with a copy of the Consumer Credit File Rights Under State and Federal Law. This information concerns your rights to obtain a credit report and change any inaccuracies found therein.

It’s also vital that you be given a copy of your contract before you sign it. This is standard practice for any contract, and if a credit repair company refuses to provide you with a copy, you should take that as a red flag.

Once you are provided with a copy of your contract, it’s important to make sure the information it contains is legitimate. A credit repair contract should cover the amount of money you’re being charged, a detailed explanation of the company’s services, a time frame for when these services will be conducted and proper contact information for the company. It’s also standard for a credit repair contract to let you know that you can cancel it within three days.

One sure sign of fraud is if you’re asked to pay upfront before any services have been performed. This is a good rule to spot all types of scams, not just those of the credit repair variety.

Another sign of a scam is if the credit repair company claims it will erase negative, but accurate information from you credit report. This is illegal. Practicing responsible credit behavior for an extended period of time is the most effective way to work through accurate credit problems that are on your report.

Any credit repair company that asks you to waive your rights under the Credit Repair Organizations Act should be avoided. The CROA is meant to protect consumers from predatory credit repair scams.

It’s no secret that vehicle repair costs are on the rise. The most recent data from the CarMD Vehicle Health Index shows that for the first time in six years, vehicle repair costs have increased 10 percent nationwide. With more people hanging on to their vehicles for longer periods of time, these increases can wreak havoc on a person’s online checking account.

Of course, repair costs can be even more damaging to individuals without proper vehicle protection plan (VPP) insurance.

What is VPP Insurance?

While new cars are typically protected from mechanical breakdown by a warranty, once it expires, drivers are leaving themselves open to major financial loss. VPP insurance offers coverage for repair costs to policyholders, ensuring that any mechanical problems a vehicle may face will be taken care of with the least expense to its owner.

Purchasing a vehicle is an investment, and since most individuals rely on their vehicles for everyday needs, obtaining the right insurance coverage is essential. Mountain America Insurance Services, in cooperation with Route 66 Insurance, can provide vehicle owners with a number of policy options intended to suit their specific needs.

VPP insurance offers full service protection

It’s important for vehicle owners to keep in mind that mechanical breakdown can lead to more costs than just those related to repair. In addition to the likelihood of forking over thousands of dollars for vehicle repair, mechanical breakdown expenses can include towing fees, car rental costs, battery replacement and total loss refund, which will reimburse the cost of your warranty if your car is totaled – even if you used the warranty

However, by investing in VPP insurance, Vehicle owners have a $0 deductible, giving them the chance to save a significant amount of money, as well as considerably cut down on the stress that comes with mechanical breakdown.

Not only does VPP insurance provide coverage for major vehicle components like engine, transmission, front and rear wheel drive, front suspension, steering, brakes, electrical and air conditioning, it also provides coverage for things like 24-hour roadside assistance, rental car costs, emergency tire repair, lost keys and lockout assistance.

Additionally, since repairs can be performed anywhere in the United States and Canada, policyholders have more flexibility when it comes to where and when repairs are done. Also, if mechanical breakdown occurs during a trip, policyholders can depend on trip interruption expense reimbursement. Together with fast payment on claims and the chance to eliminate or reduce out-of-pocket expenses, VPP insurance is an incredibly valuable resource for vehicle owners.

Not only are VPP insurance plans available for most new and used vehicles, but coverage can be transferred to a new owner, making VPP insurance an investment that will only add to the resale value of a vehicle.

VPP insurance plans can be tailored to fit each vehicle owner’s needs, making it easy for all individuals to gain peace of mind and vital financial protection.

In addition to VPP insurance, Mountain America Insurance Services has and National Auto Care have several other plans intended to fit the needs of vehicle owners.

Payment protection insurance

Besides taking out a home loan, a vehicle is likely to be one of the most expensive purchases an individual makes in his or her lifetime. In most cases, an auto loan is necessary to finance such a purchase. But what happens if the borrower dies, is injured or becomes seriously ill?
A person dies every five minutes, while a person suffers from a disabling injury every two seconds. Meanwhile, of the 569,000 workers who become disabled each year, only about half of them return to work. This loss of regular income could lead to major problems for borrowers.

Regardless if they are killed or are unable to work, payment protection insurance policyholders can count on the knowledge that their loan payments will be made for them, preventing repossession of a vehicle or major damage to their credit rating.

Guaranteed asset protection

If a vehicle is totaled or stolen before its loan is paid off, borrowers can find themselves responsible for a significant amount of money to their lender. An insurance company may determine that a vehicle is worth less than what is owed to a financial institution, making borrowers liable for the difference.
A vehicle’s value depreciates as soon as it’s driven off the dealership lot, and when drivers factor in the chances of a vehicle being stolen or totaled, it’s clear that Guaranteed Asset Protection (GAP) can be an incredibly valuable tool.
GAP will cover the difference between market value and actual value, allowing vehicle owners to get on with their lives and take care of any monetary discrepancies. It also can pay the insurance deductible and giving give the insured cash toward the purchase of their next car.

Insurance products are not deposits of Mountain America Credit Union and are not protected by the NCUA. They are not an obligation of or guaranteed by the credit union and may be subject to risk. Mountain America Insurance Services, LLC is a wholly owned subsidiary of Mountain America Financial Services, which is a wholly owned subsidiary of Mountain America Credit Union. Business conducted with Mountain America Insurance Services, LLC is separate and distinct from any business conducted with the credit union.

If you are trying to sell or purchase a home, you need to be aware of the home’s resale value. Many things affect a home’s value, but the number one factor is its closeness to employers, jobs and businesses. If your home isn’t near potential jobs, it will not be worth as much as other homes that are.

Other factors that positively affect your home’s value:

-          Shopping areas

-          School districts

-          Crime rates

-          Property taxes

-          Medical facilities

When considering your home’s resale potential, remember to think like a buyer. Don’t focus on your personal preferences. Instead, think about what the average person will want to buy in the future.

The purchase process itself is also very important. Remember to slow down and relax. Mortgage brokers and real estate agents love for you to think that if you don’t act immediately, you’re going to miss out. Occasionally, this can be true, but it is not worth skimming over the documents you’re actually signing. Read them carefully. Don’t hesitate to ask a mortgage broker to repeat and clarify what he or she has said.

To learn more about Brian Nelson Ford’s “8 Pillars to Financial Greatness” and how to participate in the program through Mountain America, click here.

Or, visit our website to schedule an appointment with a mortgage specialist from Mountain America Credit Union.

Maintenance, renovation and repair on a property can be an expensive prospect. For homeowners looking to find an affordable way to finance their home improvements, one option to explore is a home equity line of credit (HELOC). This is a specific type of credit line that uses your home as collateral. Once a maximum loan balance has been determined between a borrower and lender, the homeowner can draw on the HELOC whenever they need funds.

Advantages of a HELOC
There are many advantages to using a HELOC instead of a traditional loan or line of credit. Unlike other loans, which involve receiving large lump sum payments, a HELOC allows borrowers to access only as much money as they need at a time, similar to a credit card. Instead of paying interest on a large amount of money, you only need to worry about covering interest for whatever amount you take out at that time.

In addition, since a HELOC is guaranteed by your home, interest rates tend to be much lower than traditional loans. If mortgage rates are at a low level, utilizing a HELOC will allow you to take advantage of them. Also, a HELOC will give you the chance to take out much more money than a traditional credit card.

HELOCs also offer special tax benefits. Interest paid on a HELOC is generally deductible, since your primary residence is used as the collateral (for specifics and limitations on deductibility, contact your tax advisor). This feature makes a HELOC an attractive option, as it can potentially make your effective after-tax interest rate even lower than the note rate.

Things to Consider
While there are many positives to using a HELOC, there are some things to consider before getting one. Unlike loans with fixed interest rates, the interest on a HELOC is variable, meaning that it can fluctuate with the market. Also, the amount of money you can borrow is dependent on the amount of equity in your home. If you have not built up enough equity in the property, using a HELOC may not make financial sense.

Finally, it’s also important to remember that using a HELOC means you’re putting up your home as a guarantee that you will be able to repay your loan in full. Moreover, since your home is acting as collateral, if it’s value decreases, you could end up owing more money than what your property is worth. Keep this in mind before deciding on a home equity line of credit.

Differences from Other Financing Options
While a HELOC acts as an additional mortgage on your home, it features many differences from a traditional second mortgage. A HELOC is a revolving line of credit with payments dependent on how much you owe on the loan at any given point of time. Once you’ve paid off what you owe, you can borrow more without applying for a new loan. Meanwhile, a second mortgage is paid out in one lump sum with a set term and length. In order to take out a new loan, you would have to pay off your original loan and begin the application process again.

HELOCs are also often confused with home equity loans. While both are dependent on the amount of equity you have in your home, a home equity loan is similar to a traditional loan in that it involves a predetermined lump sum with fixed monthly payments. Regardless of whether you settle on a home equity loan or home equity line of credit, both options offer an alternative to conventional loans.

While most people are familiar with residential real estate and many of its trappings – mortgage rates, home equity loans, etc. – far fewer consumers understand the intricacies of commercial real estate.

What is commercial real estate?
Commercial real estate is generally any property that is used to make money. Whereas residential real estate concerns people’s domiciles, commercial real estate applies to businesses.

Commercial real estate is basically classified in two categories: Owner Occupied and Investment Real Estate.  Owner occupied is just as it states, the building is owned by the business or business owner operating out of it.  Investment real estate is simply someone or some entity that owns a building and leases it to a business.   Many people make their living investing in these properties and leasing them to tenants.  These types of property typically consist of:  Office, Retail, Industrial, Multi-family, Land and Specialty Properties.

While office buildings are easily identified, retail properties are building where the public goes to receive goods or services.  Stores and restaurants are examples of retail properties.  Industrial real estate properties are used for manufacturing and production.  Multi-family properties, such as apartment buildings and rental homes, are technically residential real estate; however, they act as commercial real estate to the person who owns them because they are used to generate income. Specialty properties include car washes, storage units, schools, hospitals and other single-use properties.

Put simply, any property that is generating funds for its owner can be classified as commercial real estate.

Lending for commercial real estate
Potential investors should keep in mind that borrowing for commercial real estate can be much different than borrowing for residential real estate. One of the main differences concerns down payments. While it is possible for residential homebuyers to obtain financing for a property with minimal down payments, generally lenders will require a larger down payment for commercial property.

Also, while focusing on the borrower’s financial history and assets is important, lenders will be more interested in how the commercial property will generate income. Lenders want to ensure that they will be repaid, so borrowers should be able to illustrate how a commercial property will generate income.

Commercial real estate is also valued differently than residential real estate. The size of a commercial property is much more important to its value. Additionally, while residential real estate is often valued based on how much similar properties in the area have sold for, commercial real estate values are generally determined by three factors: cost to build, market value and income approach.   Of course, factors such as location and condition are still important to a property’s value.

Borrowers should also understand that loan terms are typically much shorter for commercial property. Whereas a residential home loan can have a 30-year term, commercial loan terms generally last for 10 years or less, but may have a longer amortization.

Investing in commercial real estate can be very lucrative if one knows what they are doing.  The price of the property, amount of the loan, the quality of the property and  the tenant are all factors that can make all a difference.  Once it was thought that you could never lose on commercial real estate, but the recent recession has dispelled that myth.  As with everything, if one is going to invest in commercial real estate, they should make sure they have done their homework.

Taking out a loan can be a major financial investment, and regardless of a borrower’s best intentions, there may come a time when it becomes a struggle to keep up with the payments. It’s in situations like these that workout loans become a valuable tool for borrowers to avoid defaulting on a loan. And if they contact the lender early enough, it could help them preserve their credit rating.

What’s a Workout Loan?

Workout loans, or workout agreements, are mutual agreements between lenders and borrowers intended to renegotiate the terms and conditions of a loan to meet the borrower’s current financial condition. They are meant to be a temporary solution to a temporary problem, such as unemployment, decrease of income of 25% or greater, major medical expenses, divorce situations and natural disaster. So instead of a borrower falling behind on their payments, the lender will work with them to offer some form of financial relief that can help them keep current.

While the prospect of defaulting on a loan may seem scary to borrowers, it’s far from ideal for lenders as well. The financial losses and expenses of payment recovery involved in a default do nothing to help a lender’s bottom line, meaning many lenders will do what they can to help a borrower get back on track.

Types of Workout Loans

The type of workout agreement a lender and borrower can come to varies, but the following are some common examples.

• Term extension—Term extension will increase the lifespan of a loan, reducing monthly payments.
• Payment deferment—Payment deferment allows borrowers to play catch up on missed payments by extending their loan.
• Repayment plan—Repayment plans are special programs lenders may use to help borrowers begin to pay down their debt.
• Loan modification—Loan modification changes the terms of a loan, often featuring more cost-effective concessions that can help borrowers stay up to date on their payments. This is usually a temporary change to help the borrower through their hardship.
• Payment forgiveness—Payment forgiveness involves a lender agreeing to waive payment obligation for a missed payment. It’s important to note that this option is not always available.

First Steps

The most important thing a borrower facing financial difficulties should do is contact the lender. The sooner they know about the situation, the sooner the two parties can start working toward a solution. Additionally, waiting to request assistance will put the borrower ever further behind on payments.

For borrowers with loans from Mountain America, this means contacting the nearest branch or Service Center, 1-800-748-4302, as soon as possible. We have workout loan options for both consumer and home loans to help struggling members get back on track financially.

Going green has been all the rage for some time now, but having just celebrated Earth Day, it’s a good time to consider ways to be more environmentally friendly. In addition to helping the planet we call home stay healthy, going green can also help individuals save green when it comes to their wallets. While residential properties can leave a large carbon footprint on the earth, there are many cost-efficient ways to both help the environment and save you money. After all, being eco-friendly shouldn’t require getting a personal loan.

Energy
According to the U.S. Energy Information Administration, as of 2011, the average annual electricity consumption for a U.S. home was 11,280 kWh, marking an average of 940 kilowatt hours per month. This energy consumption not only takes a toll on the environment, but on homeowners’ bank accounts as well. One simple way to cut back on energy expenditures is to replace incandescent light bulbs with compact fluorescent light bulbs (CFLs). Not only is this procedure quick and easy, but CFL light bulbs last longer and use less energy, resulting in considerable savings over the lifespan of the bulb.

Another option is investing in an automated thermostat that will automatically set heating and cooling temperatures within a home. Individuals often forget to turn a thermostat up or down throughout the day, wasting energy when they are not at home. Additionally, keeping a thermostat a few degrees lower in the winter and a few degrees higher in the summer can significantly cut down on heating and cooling bills.

Additionally, unplugging unused appliances is an easy way to cut down on energy usage. Even if an appliance is not in use, having it plugged in will result in energy usage.

Water
According to the U.S. Geological Survey, the average person uses approximately 80 to 100 gallons of water each day. As water is vital to our health and survival, individuals should consider conserving water when possible.

Easy strategies to conserve water include taking shorter showers and repairing leaky toilets and faucets. It might also be wise to invest in fixtures and tools that can cut down on high water usage. For instance, low-flow shower heads and faucet aerators can save water as well as money on water bills.

Additionally, since a lot of water consumption is the result of lawn care, homeowners can take steps to make their yards more water-friendly. This includes planting flowers, shrubs and trees that require less watering, as well as bunching these plants together to make them easier to water. Investing in tubs to collect rainwater is also a smart way to reduce water usage.

Gas
In addition to homes, vehicles are responsible for a large amount of pollution. It’s with this in mind that individuals should do what they can to reduce gas expenditure. One way is to walk, bike and use public transportation more. Not only does this help the environment and result in monetary savings, but walking and biking can also offer great health benefits.

Also, making sure that a vehicle is in good condition can go a long way toward making it more eco-friendly. Properly inflated tires will result in better gas mileage, and a clean engine will produce less pollution. Drivers should also keep in mind that driving at a steady and reasonable speed will burn less gas than driving excessively fast. Not only is this safer, but it will further reduce gas costs.

These days, more and more people are switching over to online banking. It’s a fast, easy way to manage your money, and you no longer have to keep track of paper banking statements.

Are you deciding whether or not to bank online? Check out these reasons why you should make the switch:

Put Your Finances on Autopilot

One major benefit of online banking is that it puts your economic plan on autopilot. When certain finances are automated, such as deposits into your savings account, you no longer have to remind or even force yourself to get it done. Instead, your account transfers the funds automatically.

Get Organized            

In addition to saving you time and money, online banking help keep you organized. With online banking, you’ll be able to track spending, manage bills, and stick to your budget all from your cell phone or personal computer. Online banking also eliminates those messy stacks of paper statements.

Go Green

Another perk of online banking is that using paperless statements is a good way to reduce your carbon footprint. According to the Environmental Protection Agency, the entire paper billing process uses more than 674 million gallons of fuel each year. This results in 3.6 million additional yearly tons of greenhouse gas.

Increase Your Financial Security

Despite the convenience of online banking, many people hesitate to switch over because they think banking in person is more secure. However, customers who bank online are actually better protected than those who don’t.

Financial institutions already store your information electronically, and accessing it yourself does not expose that information to anyone but you. However, every time you write a personal check, you give potential thieves your name, address, account number, routing number, and the institution you bank with.

Online banking offers the maximum in security because all the payments are guaranteed by the bank, preauthorized by you, and made electronically over a secure connection.

Start Online Banking Today

Online banking is the fastest, safest, and most convenient way to manage your money. Contact your Mountain America representative or visit www.macu.com to get started.

 www.8pillarsU.com

It’s Financial Literacy Month, but that doesn’t mean that you shouldn’t exercise financially responsible behavior every month of the year. For the sake of your credit score and financial health, you should definitely employ a few tips to improve your financial literacy.

Brush up on your terminology
There is such an extensive array of financial terms that the everyday person can’t be expected to know all of them by heart. But if you’re working toward a specific financial goal—for example, retirement savings—you might want to brush up on terminology related to that topic. In the case of retirement planning, that may mean reading up on individual retirement accounts (IRAs). While not the most complicated accounts, there are a number of different IRAs, with different names…and advantages. Knowing the difference between Roth, Traditional, SIMPLE and SEP can help you choose the right IRA for your personal circumstance and make it easier for you to hit your retirement savings goal.

Seek advice from the professionals
Not knowing the definition of every financial term, however, shouldn’t stop you from talking to a financial professional. Financial advisers, counselors and other industry experts exist to lend a helping hand to those in need and will provide educated, unbiased advice for all your financial needs. If you have questions, don’t be afraid to reach out to a financial representative like those here at Mountain America.

Where to turn for additional help
The world of personal finance and the terms that come with it are vast, which is why it’s important for consumers to use every tool in their proverbial tool belt to educate themselves on the matter. In addition to this blog post, check out www.macu.com for more helpful financial information.