With the low interest rates on home loans from credit unions and great deals to be had in the housing market, the mantra these days seems to be “now is the time to buy!” If you’re in the market for a home, now is the time to check out the many home mortgage options you have with Navigator Credit Union. You can view credit union loan rates online. And when you’re ready to move ahead, you can apply online for home loans.

Here are some general tips you need to know before becoming a homeowner:

1. Put more money down. While there are still many first-time homebuyer programs out there that require smaller down payments, making a larger down payment of 10% to 20% of the home’s purchase price can be a smart move. Having a larger down payment will show lenders that you are responsible, and may make getting a loan easier. Also, mortgage insurance premiums on low down payment government-backed Federal Housing Administration mortgages doubled from September 2010 to April 2011, and may continue to rise.*

2. Plan to stay longer. As anyone who purchased a home in 2006 planning to sell in three to five years can tell you, a home is not the short-term investment it once was. A sounder plan is to buy with the long term in mind. Don’t buy a home you think you’ll outgrow quickly, or one that requires renovations that may be outside your comfort zone. It’s hard to predict where the housing market will go, but buying a home instead of an investment is always a smart move.

3. Come see us. The changing landscape of the housing market is hard to keep track of, and if you’re thinking of making the leap to homeownership, you’ll want someone experienced on your side. The mortgage professionals at Navigator Credit Union keep abreast of all the latest rules and regulations and can walk through the process of prequalifying for a mortgage. Visit www.navigatorcu.org or call 228-475-7300 for more information.

*

Source: The New York Times, Feb. 24, 2011.

Debt is a four-letter word – and it’s often used like one. We avoid it. We spurn it. We don’t mention it in polite company. But debt isn’t all bad. In fact, debt can actually help you build wealth – if you learn to use it wisely. Navigator Credit Union can help you sort out the good from the bad.

Good vs. Bad

Generally, debt is considered good if you use the money to buy something with the potential to grow in value. A college education stands to boost your earning power throughout life, so a student loan may be a good debt. Owning a home gives you a place to live and affords you tax advantages, plus the home’s value may appreciate over time, so a mortgage is often a good debt. But even good debt has a few warnings: Be sure to borrow only what you can afford to pay back, and shop around for the best credit union loan rate.

Using credit to buy disposable goods (like a T-shirt or a pizza) or anything that falls in value would result in bad debt, which can quickly stanch your cash flow. For example, if you charge a $500 high-definition TV to a credit card with a 17% interest rate, you could end up forking over $622 in total if you took just three years to repay the debt and paid only the minimum. And the higher the purchase price, the more interest you’ll pay.

But the line between good debt and bad debt isn’t always so stark. For instance, you may find it necessary to buy a car in order to hold down a job, but lack the funds to purchase it outright. While a car doesn’t have much potential to grow in value, it doesn’t have to be a bad debt. The trick is to be conservative and buy only what you can afford.

Where Do You Stand?

Most money savings experts recommend spending no more than 36% of your monthly income to pay off debt. Most lenders will consider this figure – called a debt-to-income ratio – when determining whether they will lend you money, and at what rate.

Do you know your debt-to-income ratio? A BALANCE? Financial Fitness counselor can help you assess your financial picture and suggest ways to improve it, all at no charge to you. Just contact BALANCE at 888-456-2227 to get started. Establishing a savings deposit program with Navigator can also help you avoid or reduce future debt. Call 228-475-7300, visit www.navigatorcu.org or stop by a branch today to learn more.

Financial experts recommend having three to six months’ worth of living expenses in a regular savings account in case of emergency. If you’ve followed this advice and have reached your savings goal, don’t stop saving! Now’s a great time to consider other highest yield savings options that can help take your money to new heights.

The following savings vehicles from Navigator Credit Union can continue to help your money grow while still keeping it safe. Just like a regular savings account, they are NCUA insured.* Plus, you can keep tabs on these savings options just as easily as you can with your regular savings account. Here’s how they work.

Certificates of Deposit. One of the basic ingredients to a well-rounded savings plan is a certificate of deposit (or CD) that gives you a guaranteed rate of return – and that means peace of mind. CDs are high-yield deposit investments, with terms ranging from six months to five years. The interest rate for CDs tends to be higher than regular savings, which helps your money grow faster. If you are a new investor, take advantage of Navigator’s 1st Nvestor CD. For as little as $10/week, this CD gives you the opportunity to jump-start a savings plan at higher deposit rates without the requirement of a large opening balance.

Money Market Accounts. Add some muscle to your savings with a Money Market Account. This hard-working vehicle offers a higher rate than a Regular Savings Account and can be opened with an initial deposit of $2,500. Then, as your balance grows, your rate increases, too! It’s a smart way to save for a down payment on a home or to build an emergency fund as a financial cushion.

Individual Retirement Accounts (IRAs). Navigator offers traditional and Roth IRAs, two helpful ways to boost savings for your golden years. In addition to helping your funds grow safely, IRAs offer tax benefits.**

Find Your Highest Yield Savings Options

Opening other savings accounts with us combines safety with convenience. You can easily check your balance with online banking and make transfers between accounts. To learn more about our savings options and view our best savings account rates, visit www.navigatorcu.org, give us a call or stop by – we’ll be happy to talk with you.

*

NCUA insurance covers $250,000 per depositor, per legal account category.

**

This financial institution does not give tax advice. Consult your tax advisor for information specific to your situation.

Accidents happen. But what happens if your car is totaled, but its value is less than the amount you still owe on your auto loan? It’s called a coverage gap, and you may have to pay the difference out of pocket.

That’s where Guaranteed Asset Protection (GAP) can be a lifesaver. A GAP policy covers the difference between your loan balance and the amount your insurance policy would pay out if your vehicle were damaged beyond repair (totaled) or stolen and never recovered. It pays the “gap” so you aren’t burdened by the remaining balance of the loan.

GAP coverage is particularly important if you haven’t made a large down payment on a vehicle. The value of the car may drop as soon as you drive it home – so it’s common to owe more than the car is worth if you finance the purchase price. It also may be required if you lease rather than purchase a vehicle.

Coverage You Can Count On

GAP coverage is inexpensive and can be financed into the cost of your auto loan with Navigator. Contact us at 228-475-7300 or www.navigatorcu.org to get a quote for an auto loan or refinance, and don’t forget to ask about our GAP policy!

Being tight with one’s money used to carry negative connotations. Cheap Charlie. Frugal Fanny. Stingy Stu.

Now it’s much more mainstream to meet economic challenges head-on. Cost-conscious Cathy. Economical Ellie. Thrifty Ted.

Practical Living on Less

Taking control of your finances to improve your life is different than concentrating on lifestyle enhancements. It may even make your family happier in the long run. Research shows that spending time on experiences with loved ones rather than focusing on possessions often boosts positive feelings.

Here are some ideas for your family.

• Start with time, not things. Spending time together doesn’t need to cost anything. Plan game or movie nights at home, organize family sporting activities in your yard or local park, attend your children’s school events. Children will remember the things you did together rather than the things you bought them.
• Downsize your home. Can your family live without some rooms? Moving to a smaller home or renting an apartment can save significant dollars up front, plus lower monthly expenses on an ongoing basis. You may even make some money selling excess furniture and belongings you don’t need.
• Change your spending priorities. Budget for the things your family needs first and consider shopping at consignment shops rather than buying new. Staying away from shopping malls will help avoid expensive spending patterns.
• Focus on saving. Setting aside money for future needs, such as college tuition for your children and your own retirement, should remain a priority.

Let Us Help

At Navigator, we want to help you get the most value for your hard-earned money. We offer surcharge-free ATMs, low-interest credit cards and online banking to help you manage your money. We also offer a variety of savings products for your family’s future. Visit www.navigatorcu.org or call 228-475-7300 for more information.