The Hows, Whys, And Whens Of Rate Locks

Q: Everyone I talk with about my house search tells me I need to shop mortgages and lock in a rate. What do they mean?

A: If you're on the market for a house now, congratulations. This is an historically good time to buy. Interest rates are low and prices are rising in most markets. Even if it seems like a disorienting and confusing process, home buying is worthwhile in the long run.

A rate lock is an agreement by a lender to ensure a rate on a loan for a set period of time. Regardless of what the mortgage market does before the closing date, the "points," duration, and interest rate will remain the same. The lock agreement is valid until a few days after your expected closing date to account for any potential complications and can be rejected only if some serious error emerges during the qualification process.

When should I get a rate lock?

Rate lock agreements are usually offered for 30, 60 or 90 days. The longer term locks may seem like a good deal, but they usually come with higher origination fees. A 30-day rate lock might establish a 4.00% interest rate with a quarter point (or 0.25% of the value of the loan). A 60-day lock on that same loan might include a half point instead (0.50% of the loan).

It might be tempting to get your mortgage rate set in stone before you've started looking at homes so you have a good idea of your price range. As convenient as it sounds, doing so could cost you in the long run. Interest rates don't change that fast. Over the past year, interest rates have gone from a low of 3.55% to a high of 4.20%. The worst month ever for mortgage rates saw an increase of about half a percent. That raises your monthly payment $35 on a $250,000 loan. To save that $35 per month, your lender may charge you $6,250 (a quarter point) up front! You won't make up for that higher upfront cost for nearly 15 years. If, instead, you paid the higher interest rate and put that money in a savings account, you'd make about $2,000 over the life of your mortgage.

That said, ignoring your mortgage rate until the day before closing is also unwise. Your lender needs time to put together the paperwork for your loan. Ideally, you should get a rate lock sometime between a week and a month before you close. A pre-approval process should give you a good idea of your budget and can help your offer stand out in a sellers' market. An easy closing transaction, instead of trying to time the market, should be your priority here.

How do I lock my rate?

One of the wisest things you can do in the home-buying process is to talk with your credit union to let them know you are starting the process of buying a home. With many years of experience in home lending, they can help you identify some good strategies for determining the right home for you and streamline the process you'll be following. They will also help you get started on pre-approval if appropriate at that time. Then, once you've found the right house and you're ready to make it yours, let them know you are ready to lock your rate. After signing an agreement with your lender for the rate, points and duration, you're all set.

Why should I lock my interest rate?

Locking your interest rate has two big benefits. It helps you prepare your new monthly budget and it helps your credit union get all the necessary paperwork in order for closing. Don't think of your rate lock as a chance to score a deal. You won't save much money. In fact, you could stand to lose quite a bit by trying. Think of it as a T-crossing and I-dotting exercise. Having a rate lock on a mortgage means one less piece of paperwork that stands between you and your new home.

If you'd like more information about current mortgage rates, saving for a down payment, or anything else about the homebuying process, reach out to your neighbors at LA Financial Credit Union Our supportive staff is there to help you every step of the way, from setting a budget to protecting your biggest investment. Call, email, or click your way to LA Financial Credit Union today!

Check our mortgage rates here.

Apply for a mortgage loan by clicking here.

SOURCES:

http://www.bankrate.com/finance/mortgages/questions-rate-lock-answered.aspx
 

http://www.bankrate.com/finance/mortgages/how-to-lock-mortgage-rate.aspx
 

https://ycharts.com/indicators/30_year_mortgage_rate
  

5 Scams to Avoid!

Free Financial Fitness Boot Camp

Financial Fitness Boot Camp

Saturday, March 12, 2016

LA Financial Credit Union Headquarters - 1520 W. Colorado Blvd., Pasadena, CA 91105

1 0:00 - 10:45am 
Estate Planning: What families need to know
by Terzian Law Partners
Help ensure your family's future; how to legally keep your family's wealth in your pocket (and not the government's); protect your assets. Choosing the right guardian for your children; how to ensure your spouse will know what to do when you pass away.


11:00 - 11:45am 
Retirement Matters: An inside look at retirement living 
by LA Member Choice Wealth Management
Retirement living concerns, preparing for retirement, health care costs and spending patterns.


11:45 - 12:30pm
Lunch


12:30-1:15pm
Bridge the Gap - Questions aging parents & adult children must address 
by LA Member Choice Wealth Management
Are you prepared for the financial responsibility of caring for an aging parent? Do your children know your wishes as it pertains to your care giving needs?


1:30 - 2:15pm
Forecast 2016 - It's all about perspective
by LA Member Choice Wealth Management
Sharing thoughts on world economies and financial markets. Taking a look back at 2015, discuss where we are today, and look ahead at what may be coming in 2016. Discussing perspectives and how everyone sees the world through distinct filters.

Seating is limited...  

for more information and to RSVP, please visit www.lafinancial-wealth.org/p/bootcamp

Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured LA Member Choice deposits and are not NCUA Insured. These products are not obligations of LA Member Choice and are not endorsed, recommended or guaranteed by LA Member Choice or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. LPL Branch Office: 716 West 1st Street Los Angeles, California 90012 

Avoid Getting Scammed on Craigslist

LA Financial Credit Union has been alerted to the fact that someone has counterfeited our cashier’s checks and is trying to purchase Craigslist merchandise with them.  The scammer claims to be out of state and sends a cashier’s check for the merchandise for more than the sales price.  The seller is asked to use the excess funds to pay for movers to ship the item. 

If you receive a cashier’s check, please call the financial institution to verify the check.   Any financial institution will be able to verify the validity of the cashier’s check.

Before buying or selling items on Craigslist, make sure to read the website’s tips to protect yourself.

Craigslist has become a scammer’s paradise, with 20 billion page views a month, and 50 million U.S. users. Scams range from employment and car buying to ticket sales.

To combat these scams, Craigslist provides the following tips:

• Deal locally with folks you can meet in person. Follow this one rule and avoid 99 percent of scam attempts on Craigslist.
• Never wire funds via Western Union, Moneygram or any other wire service. Anyone who asks you to do so is a scammer.
• Fake cashier checks and money orders are common, and banks will cash them and then hold you responsible when the fake is discovered weeks later.
• Craigslist is not involved in any transaction, and does not handle payments, guarantee transactions, provide escrow services, or offer “buyer protection” or “seller certification.”
• Never give out financial information (bank account number, social security number, eBay/PayPal info, etc.)
• Avoid deals involving shipping or escrow services and know that only a scammer will “guarantee” your transaction.
• Do not rent housing without seeing the interior, or purchase expensive items sight-unseen. In all likelihood, that housing unit is not actually for rent, and that cheap item does not exist.
• *Do not submit to credit checks or background checks for a job or for housing until you have met the interviewer or landlord/agent in person.

Here are some examples of scams:

1. Someone claims that craigslist will guarantee a transaction, certify a buyer/seller, OR claims that craigslist will handle or provide protection for a payment.

• These claims are fraudulent, as craigslist does not have any role in any transaction.
• Scammer will often send an official looking email that appears to come from craigslist, offering a guarantee, certifying a seller, providing payment services -- all such emails are fakes!

2. Distant person offers a genuine-looking (but fake) cashier's check.

• you receive an email (examples below) offering to buy your item, or rent your apartment, sight unseen
• cashier's check is offered for your sale item, as a deposit for an apartment, or for your services 
• value of cashier's check often far exceeds your item - scammer offers to "trust" you, and asks you to wire the balance via money transfer service 
• banks will often cash these fake checks AND THEN HOLD YOU RESPONSIBLE WHEN THE CHECK FAILS TO CLEAR, including criminal prosecution in some cases! 
• scam often involves a 3rd party (shipping agent, business associate owing buyer money, etc)

3. Someone requests wire service payment via Western Union or MoneyGram:

• Scam "bait" items include apartments, laptops, TVs, cell phones, tickets, and other high value items
• Often claim that an MTCN or confirmation code is needed before he can withdraw your money - this is FALSE, once you've wired money, it is GONE. 
• Common countries currently include: Nigeria, Romania, United Kingdom, Ukraine, Spain, Italy, Netherlands - but could be anywhere 
• Apartment listing may be local, but landlord/owner is "travelling" or "relocating" and needs you to wire money to them abroad 
• Deal often seems too good to be true, price is too low, rent is below market, etc

4. Distant person offers to send you a money order and then have you wire money:

• this is ALWAYS a scam, in our experience - the cashier's check is FAKE
• sometimes accompanies an offer of merchandise, sometimes not 
• scammer often asks for your name, address, etc for printing on the fake check 
• deal often seems too good to be true

5. distant seller suggests use of an online escrow service.

• most online escrow sites are FRAUDULENT, operated by scammers
• for more info, do a Google search on "fake escrow" or "escrow fraud"

6. distant seller asks for a partial payment upfront, after which he will ship goods

• he says he trusts you with the partial payment
• he may say he has already shipped the goods
• deal often sounds too good to be true

7. foreign company offers you a job receiving payments from customers, then wiring funds

• foreign company may claim it is unable to receive payments from its customers directly
• you are typically offered a percentage of payments received
• this kind of "position" may be posted as a job, or offered to you via email

If you have been defrauded by someone in person, contact your local police department.

If you suspect that a craigslist post may be a scam, contact craigslist. File a complaint with The Internet Crime Complaint Center. File a complaint with the Federal Trade Commission.   

Closed for Presidents Day - February 15, 2016

LA Financial Credit Union and Havasu Community Credit Union will be closed on Monday, February 15, 2016 in observance of Presidentsl Day. Accounts can still be accessed via ATM, anytimeBanking and anytimeMobile.  

Capture My Heart...and earn a chance to win $100

Earn a chance to Win a Free $100 Gift Card.
1) Draw a picture of a heart on the front of a check that you intend to deposit with anytimeDeposit
2) Deposit your check via anytimeDeposit between February 7 - 14, 2016

The winner will be chosen from checks deposited via the Credit Union's mobile check deposit program (anytimeDeposit) that clearly includes a visible heart drawn on the front of the check. Mobile check deposits must be made between February 7 - 14. Winners will be announced by February 23, 2016. Heart design must be readable by the check capture system and should not conflict with the integrity of the information included on the front of the check itself.

Download the anytimeMobile App

iPhone - Download App or search for "LA Financial" in the iPhone App Store.

Android - Download App or search for "LA Financial" in the Android Market

If you have questions about using anytimeMobile, call us at (800) 894-1200 and we'll help you get started.

How You Can Recover From Your Holiday Spending Spree

Try as we might to control holiday spending, it often seems to get away from us. Come the new year, we open the bills and lament the new load of debt we’ve accumulated.

But instead of wallowing, doing nothing and letting the situation get worse — interest accrues, after all — now’s the time to take steps to fix it.

Take stock

Before you can pay down all your debt, you need to know just how much there is. Round up all the statements from your credit cards, charge cards and store cards. This might hurt, but from here forward, as you start making payments, it will get better.

As part of the recovery process, it will be useful to create a budget. The goal: change your spending habits to end up with more money to pay down your debt. And every little bit helps. Pack your lunch instead of buying it. Downgrade or outright cancel your cable TV. Drive less. Look at everything and see where you can save.

Make a plan

Daunting debt can be less scary with a plan for attacking it. One strategy is to take a mathematical approach and pay off debts with the highest interest rate first, and work your way down to the lowest. The primary target on your debt “hit list” is the credit card that carries the worst interest rate, even if that means making only minimum payments on the others.

It’s probably a good idea, too, to stay away from post-holiday sales, as tempting as they may seem. It may also be time to ask some hard questions. Was every purchase necessary? Are there any lessons to be learned for future holiday seasons?

Explore your options

If there’s little or no room to trim spending, another option is to increase income. Can you work overtime? Any part-time gigs you can pick up? Assets you can spare and sell off to help pay down debt?

If you have good credit, another option is to consolidate debt and transfer your various balances to a single account, either a credit card or a personal loan, at an institution such as LA Financial Credit Union. Here, instead of making several payments of varying amounts with different rates and due dates, you combine your debts into one account, often at a more favorable interest rate.

Online resources and tools, including payoff calculators, can help you manage your debt. In addition, the Federal Trade Commission offers ideas to help cope with debt, including information on how to select a credit counselor.

The point is, all is not lost. You can get through this. It starts with the desire, and then few small steps in the right direction.

Peter Lewis, NerdWallet

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

GreenPath will host two FREE webinars in October.

GreenPath will host two FREE webinars in October. These hour-long, online programs are taught by GreenPath education specialists. The webinars are always free and informative without a sales pitch. There’s also plenty of time for Q&A at the end of the program.

Teaching Kids Financial Responsibility | Wed Oct 7th - 9:00am PST
How to Deal with Your Debt | Wed Oct 21st - 9:00 am PST

http://www.greenpath.com/resources-tools/webinars

Take out our great auto loan or home loan during the remainder of 2015 and you could WIN 1 MONTH'S PAYMENT!

Take out our great auto loan during the remainder of 2015 and you could WIN 1 MONTH'S PAYMENT!^

• Rates as low as 1.99 APR* for 60-month terms
• No payment for 90 days**
• Up to 100% financing
• Terms up to 84 months
• Same low rates for new & used autos & light trucks

NEW...USED...and REFI's are eligible to WIN! Apply online or in branch. With rates & terms like ours, you can't lose.

Click Here to Apply 

Take out our great home loan during the remainder of 2015 and you could WIN 1 MONTH'S PAYMENT!^^

• All our first mortgages (PURCHASES & REFI's) are eligible to win*
• Great low rates with NO points
• Low down payment
• As high as 90% loan-to-value with no PMI**
• Fixed and adjustable-rate programs
• Conforming, super conforming & jumbo mortgages

Real estate prices are still at record lows. This is your chance to cash in on a double "bargain" - super low interest rates and a chance to win 1 month's payment. Or simply refinance your current home loan.

Click Here to Apply

^Complete sweepstakes rules are available online. NO PURCHASE/LOAN FUNDING NECESSARY TO ENTER OR WIN. A PURCHASE/LOAN FUNDING WILL NOT INCREASE YOUR CHANCES OF WINNING. *APR= Annual Percentage Rate. At 1.99% APR, your monthly payments are just $17.53 per $1,000 borrowed for 60 months. Discounted rate includes 0.25% reduction for automatic payment. 100% Loan-to-Valueon all cash-out refinances. Some restrictions may apply. Loan approval subject to credit and income evaluation. Consumer loan rates may vary depending on credit profile, term, mileage, and the amount financed. Rates and terms are subject to change without notice. **Qualifying member may select to defer first payment for up to 90 days from the loan funding date. Interest will accrue during deferral period. Minimum FICO score 650. Subject to credit approval. Cannot be combined with other offers. Auto loan must be funded July 1, 2015-December 31, 2015 to be eligible to win. Six (6) Auto winners: Each winner will win one monthly payment. Payment amount is dependent on the amount of loan that has been financed - not to exceed $1,000. Odds of winning depend on the total number of eligible entries received. All expenses relating to acceptance and use of any prize that are not explicitly listed herein as being awarded, including payment of taxes, are responsibility of the winner. Limit of one prize per person. No substitution, barter, transfer, or assignment of prize permitted. One winner will be selected on the last day of each month - July-December, 2015. Entries will remain eligible throughout the sweepstakes period, so the earlier you fund the better your chances to win. Existing LA Financial Federal Credit Union or Havasu Community Credit Union loans are not eligible for promotion.

^^Complete sweepstakes rules are available online. NO PURCHASE/LOAN FUNDING NECESSARY TO ENTER OR WIN. A PURCHASE/LOAN FUNDING WILL NOT INCREASE YOUR CHANCES OF WINNING. Promotion is not available to refinance an existing LA Financial Federal Credit Union or Havasu Community Credit Union real estate loan. Loans are subject to Credit Union loan policies. *Mortgage loan must be funded July 1, 2015-December 31, 2015 to be eligible to win. Two (2) Mortgage winners: Each winner will win one monthly mortgage payment. Payment amount is dependent on the amount of eligible mortgage loan that has been financed - not to exceed $2,500. Odds of winning depend on the total number of eligible entries received. All expenses relating to acceptance and use of any prize that are not explicitly listed herein as being awarded, including payment of taxes, are responsibility of the winner. Limit of one prize per person. No substitution, barter, transfer, or assignment of prize permitted. Mortgage winners will be selected on September 30, 2015 and December 31, 2015. Entries will remain eligible throughout the sweepstakes period, so the earlier you fund the better your chances to win. **For Adjustable Rate Mortgage (ARM); please call the Credit Union for details. 

Webinar Wednesdays in June

GreenPath will host two webinars in June. These hour-long, online programs are taught by GreenPath education specialists. The webinars are always free and informative without a sales pitch. There’s also plenty of time for Q&A at the end of the program. 

What’s On Your Credit Report? – Wednesday, June 3 at 9 AM PST. Reviewing your credit report is an essential step to financial success. We will discuss ways to track your credit report for free, understanding what is on your report, as well as handling inaccuracies and ways to prevent fraud.

Unlocking the Secret to Your Credit Score –Wednesday, June 17 at 9 AM PST. We have seen these numbers before: 720, 680, 550, but what does it all mean? This course is designed to help you gain a better understanding of what makes up your credit score and what you can do to improve it! To sign-up for any of these personal finance webinars, log on to FinancialEducation, then Webinars.

LA Financial cares about your financial health.  So we partnered withGreenPath to provide you with access to free, one-on-one financial counseling, debt management services and financial education tools.GreenPath has been helping people get out of debt and reach their financial goals since 1961.  We encourage you to look around our website to get a feel for all of the financial wellness resources available to you.We're glad you're here and we look forward to helping you!  We offer:Free Financial Counseling - We offer free financial counseling and debt counseling without a sales pitch.  Our caring, certified advisors will help you explore options for achieving your financial goals.  Everyone receives a customized action plan.Debt Management Plan - If you are struggling to eliminate credit card debt, GreenPath may work with your creditors to develop a mutually agreeable payment plan.  The plan could stop collection calls, lower interest rates and help you save lots of money.Housing Services - GreenPath’s housing advisors are experts at assisting people with their housing needs.  We offer foreclosure prevention services, home buyer preparation assistance, and reverse mortgage counseling.Student Loan Counseling - We’ll help you look into student loan repayment options that can postpone or lower your payments.  Learn the pros and cons of each student loan repayment strategy so you can make an informed decision.Credit Report Review - Learn how to better understand your credit report and how to manage your credit score.Financial Education - GreenPath University is your online source for free eCourses, videos, webinars, articles and other financial education resources.