Merry Christmas!

Is Now a Good Time for a HELOC?

Even though home values have dropped across the country, unemployment is extraordinarily high, and consumers in general are heavily in debt, many people have a need for more credit.

If you're in a position to borrow, consider a loan based on your home equity--the difference between what your house is worth and what you still owe on your mortgage. You could take on a conventional second mortgage or you could enter into a revolving credit agreement with no set term, known as a home equity line of credit (HELOC).

A HELOC works almost like a credit card to enable you to convert some of the value of your homeownership into cash. Interest rates for HELOCs usually are much lower than regular credit card rates, especially if you have more than a 20% ownership stake in your house. At this time, HELOC rates are favorable, down to the 5% range in some parts of the country (bankrate.com Dec. 15). Credit unions offering this kind of loan usually have better rates than other lenders.

As an added bonus, the interest expense for some uses of HELOC funds is tax deductible. But be careful. Just as with your first mortgage, you'll have to pledge your house as collateral on a HELOC. You don't want to increase your risk of losing your home unless the added debt is worth it and you have stable employment. Here's some advice from the Credit Union National Association (CUNA) Center for Personal Finance about using a HELOC wisely:

• Put additional debt to good use. Using a HELOC for prudent home improvements such as a new roof, or for education, or to consolidate more expensive loans can significantly improve your net worth. In contrast, borrowing for vacation or daily expenses or to build a home theater can jeopardize your long-term financial health.
• Avoid going all in on a HELOC. Lenders aren't likely to advance a line of credit equal to 100% of your home's equity, but beware of the temptation to indulge too deeply. Remember that home equity can represent a great deal of your future retirement nest egg's value.
• Manage your HELOC use. Make all payments for loans and other obligations such as utility bills on time to maintain a clean credit report and solid credit score. Keep your total monthly debt payments, excluding a first mortgage and credit card balances, paid off monthly, to no more than a 20% of your take-home pay. Watch the economy--as it gets stronger, interest rates in general will rise, pulling your HELOC's variable rate up as well.

Had Enough Surprises From Your Credit Card Company?

Enough already with short payment deadlines, huge interest rates, and gotcha late fees.

If you're ready to pop for the card with a low rate, predictable fees, and no surprises, call us about a credit union credit card.

We have the jump on other cards.

Car Shopping?

LifeWay Credit Union has contracted with Credit Union Services, LLC to provide our members with the best, most accurate automobile shopping data available. You can get car, truck, motorcycle and watercraft pricing from Black Book; used car pricing from Black Book; customer and dealer rebate information; recall information; and 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.

Make the Switch to LifeWay Credit Union

Consumers with credit cards might want to think about doing a balance transfer to a credit union, personal finance expert Suze Orman said on MSNBC's "Morning Joe" program last Friday.

"Credit unions are being more responsible to their [members] than banks," Orman said.

During the show, Orman discussed the limited availability of credit plaguing consumers and said many large banks are raising their interest rates on customers who have consistently have paid their bills.

Check out our credit cards. You may be very surprised at what we have to offer!

Recession Uprooting More Young Adults

In the past year, 13% of parents with adult children reported that one of their daughters or sons moved back home, according to a Pew Research Center survey conducted in late October. With the recession leaving a rising number of young adults unemployed or on reduced salaries, many are facing major changes--moving home, finding a roommate, putting life on hold, or returning to school.

While everyone has been touched by the recession, it has been especially rough on young adults. The Bureau of Labor Statistics reports that only 46% of 16- to 24-year-olds are currently employed. This is the lowest percentage since the government began collecting this data in 1948.

Record unemployment has sent many young adults back to their parents' homes. The survey cites that one of 10 adults ages 18 to 34 moved back home due to the poor economy. Of those living with parents, about half are employed at least part-time. Moving back home can be stressful for both parent and adult child. Setting ground rules--such as rent payment, chores and responsibilities, and privacy expectations--can ease the transition.

As an alternative to moving home, others have found a roommate. About one fourth of those ages 18 to 24 reported moving in with a roommate due to the recession. Those ages 25 to 34 were less likely to share a room, but more likely to postpone a major change.

"I don't." More than a fifth of those ages 25 to 34 postponed getting married as a result of the recession. Likewise 15% in this age group delayed starting a family. With January fast approaching, now is a good time to re-evaluate current debt spending with an eye on forecasting a budget for 2010. Home & Family Finance Resource Center's "Getting Married" Turning Point offers suggestions for merging financial lives and keeping down wedding costs.

Often college enrollment increases during a recession. Hence, it comes as no surprise that the share of 18- to 24-year-olds attending college (either four-year or two-year) hit an all-time high in October 2008 (the most recent date for which data were available). Fueled by high unemployment and increasing high-school graduation rates, 2009 enrollments may reach a new peak. Those attaining additional skills or certifications may find themselves better qualified applicants as they search for employment in 2010 and later.

Secondary Savings Accounts

Switching from Aetna to Blue Cross in 2010? Set up a secondary savings account with us to set aside money for your deductibles. Stop by the office today and we'll take care of it for you.

Investment Scams Exploit Green Theme

"Going green" generally has a positive association, but that wasn't the case for some unsuspecting seniors looking for eco-friendly investments.

The Securities and Exchange Commission recently charged four people and two companies with running a $30 million Ponzi scheme targeting elderly investors and people close to retirement who thought they'd found a green opportunity (USA Today Nov. 16).

Victims were encouraged through seminars, the Internet, and phone calls to liquidate their retirement plans and home equity, and buy securities promising returns from 17% to more than 100% a year.

Rising health-care costs, low investment returns, and increased life expectancy make seniors prime targets of investment fraud, but consumers of any age can fall victim to these tactics.

The National Consumers League, Washington D.C., advises:

• Don't succumb to high-pressure sales--A good investment opportunity today likely will be here tomorrow. Pressure to act on impulse often is a danger sign of fraud.
• Beware promises of quick, large profits--No one can accurately predict how an investment will perform. Investments that promise the highest payoff often are the most risky.
• Realize there is always risk--All investments carry risk. Know your risk tolerance before investing.
• Get details in writing--Representatives from a legitimate company will be happy to provide all the information you need.
• Be wary of testimonials from strangers--Someone you don't know offering investment advice could be a crook trying to lure you into a scam.
• Investigate investment offers--Get help from your state securities regulator, the federal Securities and Exchange Commission (sec.gov), and the North American Securities Administrators Association (nasaa.org).
• Use caution when receiving investment opportunity e-mails--Many unsolicited e-mails are fraudulent.