Happy Thanksgiving

The staff of LifeWay Credit Union wishes you and your family a very Happy Thanksgiving!

Buying a Car?

One of the best things you can do before buying or selling a car is to do your research, right? But what if the information you’re using isn’t the most accurate or up-to-date? LifeWay Credit Union has the solution for you.

We’ve contracted with Credit Union Services, LLC to provide our members with the best, most accurate data available. You can get both new car, truck, motorcycle and watercraft pricing from Black Book; used car pricing from Black Book; customer and dealer rebate information; recall information; along with other valuable tools to help you make your purchase.

To access this site, go to lifewaycu.org and click on the box that says “Buying A Vehicle?”. You’ll have instant access to everything you need to do your car shopping. Questions? Call us at 615-251-2089.

New Homebuyer Tax Credit Boon for Boomers

The new and improved Extended Home Buyer Tax Credit--signed into law Nov. 6--is welcome relief to more than just first-time home buyers. It may be a windfall for boomers or retirees thinking of downsizing (Forbes.com Nov. 6).

The previous $8,000 tax credit was available only to first-time home buyers and to anyone who hadn't been a homeowner during the three years before closing on a new house. Now, longtime homeowners can get a tax credit of up to $6,500, opening the door for anyone thinking of trading down--or up--or moving to a different locale for their retirement years.

Whether you're buying your first house or downsizing, understand the rules:

• Deadlines. To claim either the $8,000 or $6,500 version of the tax credit, you're required to close on the new house--or be locked into a contract to close--before May 1, 2010. Closing must occur before July 1, 2010 (Bankrate.com Nov. 9).
• Maximum allowable credit. For first-time home buyers, it's $8,000. For current homeowners, it's $6,500. The allowable tax credit amounts to 10% of the sale price, so if the purchase price is just $75,000, the tax credit would be $7,500.
• Threshold. If your house sells for more than $800,000, you won't qualify for the tax credit.
• Purchase dates. You must purchase the house between Nov. 7 and April 30, 2010.
• Income limits. Single individuals with modified adjusted gross income (MAGI) of up to $125,000 can qualify for the full credit, up from $75,000 under the old law. For couples filing jointly, the full credit is available for MAGI of up to $225,000--previously $150,000. Above those amounts, there's a phase-out over the next $20,000.
• Eligible properties. The Extended Home Buyer Tax Credit can be applied to primary residences, including single-family houses, condominiums, townhomes, and co-ops.
• Size and price requirements. There are none. Your new house doesn't have to be bigger or more expensive than the old one. And, you don't have to sell your old house to claim a buyer's credit.
• Paperwork. You're required to attach a copy of the new house's settlement statement to the federal tax return for the year of purchase. This proof of purchase is intended to cut down on fraud and questionable tax accounting associated with the previous tax credit legislation.
• Flippers. If you move within 36 months after the new purchase, you may have to pay back the credit.

Military personnel who serve outside the U.S. for at least 90 days in 2009 or 2010 get an extra year to claim the credit. Any servicemember who's forced to sell a house because of a military service assignment won't be required to pay back the credit.

Finally, be on the lookout for tax fraud. If anyone in the transaction advises you to conceal information from your lender, walk away and cease all communication with that individual.

A Free Credit Report Can Cost You $14.95 a Month

Although consumers can request free credit reports online at annualcreditreport.com, many are being lured to other sites, such as freecreditreport.com (an Experian company) and ultimately are paying for unnecessary monthly credit-monitoring fees (The New York Times Nov. 3).

Multiple sites advertise "free" credit reports, but you're actually enrolling in a service that will monitor any changes in your credit reports. The only way to get the report at no cost from these sites is to cancel the service during the trial period. And it appears that not many are cancelling. Some nine million consumers are spending nearly $700 million annually on these services, according to Carter Malloy, a Stephens Inc. analyst.

So what does $14.95 a month in credit monitoring get you? Most offers bundle a copy of your credit report with a credit score (a three-digit number, based on the history in your credit report) with e-mail alerts of changes to your credit report through at least one credit bureau.

Yes, credit monitoring will tell you what's being reported to your credit history. No, it won't prevent credit card fraud or identity theft. If someone else is using your credit card, you'll see the charges on your statement, not in a credit report. Credit report monitoring could, however, spot an unauthorized loan or credit card opened in your name. Bottom line: Unless you've been a victim of identity theft, daily credit report monitoring is probably unnecessary.

"I knew they had roped me into this thing after I started getting these e-mails," says Philip Neustrom in an interview with The New York Times. After six months, Neustrom cancelled the Experian service—never once having used the monitoring. "There are only so many things you can do in a day," he added.

The Fair and Accurate Credit Transactions Act (FACT Act) of 2003 requires each of the three major credit bureaus to provide one free annual credit report to consumers requesting a copy. The government-authorized site, annualcreditreport.com, is a portal that sends consumers to one of three bureaus for a free report. Still, be on your guard. Once at an individual credit bureau's site, you'll most likely be offered additional services for a charge. You can, however, take a pass, getting just your free credit report.

Help Pay for College Without Risking Student's Aid

With the gap between the average annual cost of attending a four-year public university ($14,333) and the average annual amount of financial aid ($8,896) topping $5,400 a year, help from family members is becoming increasingly important. In fact, 65% of grandparents told the College Savings Foundation that they intend to chip in for their grandchildren's higher education (CNNMoney.com Nov. 2).

But as welcome as free money from a relative may be, unless you make the gift properly, it actually can reduce a student's financial aid.

A student must report assets to the government through the Free Application for Federal Student Aid (FAFSA). If money a student receives is considered income, it has the unfortunate effect of reducing the aid award by up to 50 cents on the dollar.

Here are three alternatives from the Credit Union National Association for improving the amount of financial assistance you can deliver without negating the amount of financial aid:

• Good: Give money to the parent. This increases parental assets but, because of the way the aid calculation works, such a gift has a much smaller negative effect on the student's financial aid--less than 6%. Of course, be sure not to exceed the annual gift-tax exclusion, which is $13,000 for 2009.
• Better: Participate in a 529 plan. Depending on the rules in your state, these International Revenue Service-authorized plans allow you to contribute up to $13,000 a year or a lump sum of $65,000. As long as the plan is in your name, its balance doesn't become an asset to the student until distributions start flowing. The 529 plans come in two flavors--a savings plan that operates like an individual retirement account (IRA) or 401(k) investment account or a prepaid tuition fund. Unfortunately, recent stock market declines have squeezed prepaid funds, forcing some states to reject new enrollees and others to raise fees. In either case, it's smart to consult with your financial adviser about 529 plan setup details.
• Best: Help the new graduate pay off student loans to the tune of the annual gift-tax exclusion. This won't help the student avoid debt, but neither will it harm aid eligibility. And as an added bonus, it's a welcome reward for successfully earning a college degree.

Mortgage Market has Opportunities for Consumers

Nearly 6.5 million home owners are deciding whether to stay with their adjustable-rate mortgages or lock in fixed rates (Money November).

In fact, September's 9.4% sales increase was the largest monthly hike in 26 years as buyers moved to qualify for the first-time buyers incentives expiring this month. Nationwide, sales are up nearly 24% since January (MSNBC Oct. 23).

Foreclosures and short sales--where the mortgage exceeds the sales price--have forced prices downward 9% from a year earlier. The median price in September was $174,900, down from $191,200 in September 2008. And prices could fall further if unemployment, expected to rise to 10.5% next year, leads to more foreclosures. Inventories of unsold homes, which fell about 7% in September, are at their lowest level since March of 2007 but could well rise with higher unemployment.

In fact, what is happening in the mortgage market is regional. During the past three years, home prices in metro areas of 23 states recorded gains. The South, the Plains, and most of the non-coastal West showed some ability to weather the stormy mortgage market, according to Fiserv (CNN/Money Oct. 21). Meanwhile, 16 states--those in the Northeast plus California, Florida, Nevada, and Arizona--have posted declines.

For many consumers, the issue is whether to lock in a fixed rate. Roughly 6.5 million homeowners have adjustable-rate mortgages (ARMs) and many of those notes are coming up for adjustment.

For the short term, consumers with ARMs should be fine. But once the economy stabilizes and the government starts to remove policies that are keeping mortgage rates low, rates are likely to rise.

Here are some thoughts about whether to stand pat with your ARM or move to a fixed rate:

• If you plan to move within the next three years, if you have less than 20% equity in your home and home prices have taken a beating in your community, or if you have a jumbo mortgage, you may be better off with your existing ARM.
• If you plan to move in the next three to five years or you have a jumbo mortgage, look at a 5/1 ARM. (A 5/1 ARM locks your interest rate for the first five years and then can adjust annually for the life of the loan.)
• If you plan to stay in your home for more than five years, or you plan to use the equity in your home for college expenses or some other need, you may want to look at a fixed-rate mortgage now; they are not likely to go lower after the next year or so.
• If you have doubts about your future plans, it is usually safer to lock in a low rate while you can.

Volunteer - Feel Better by Doing Good

Did you know that people who volunteer not only help their communities, but reap mental and physical health benefits as well? A 2007 study by the Corporation for National and Community Service (www.nationalservice.gov/) reports that those who volunteer have lower mortality rates, greater functional ability, and lower rates of depression later in life than those who don't volunteer.

Volunteers often experience the upbeat feeling referred to as "helper's high," along with increased trust in others and increased social and political participation. Older adults tend to receive greater benefits from volunteering than other age groups do.

So, as you plan your retirement life, consider making volunteerism a key component. Here are a few tips for getting started:

* As a midlife worker, get out there now and see what volunteer opportunities are available, so you know what you enjoy and you aren't at a loss when you retire.

* Do the same type of self-inventory as when you're seeking a job.

* Figure out what your passion is, what issues you care about, and seek organizations devoted to that mission.

* Determine the right balance between leisure and structured activities, and make sure you give yourself some space to enjoy the freedom of retirement.

* Realize that any help you give is beneficial, and short-term assistance can be very helpful to nonprofits.

* Look around your own community and check out different organizations like you would if you were joining a gym, or making choices in another area of your life. Figure out which organizations are logistically reasonable for you.

* You also can check organizations that match volunteers with activities, like VolunteerMatch (volunteermatch.org).