What does that mean for members?

Even if you currently have Courtesy Pay, you will need to contact GHCU and officially “opt in” in order to keep your Courtesy Pay privileges. The new regulations take effect on July 1, 2010, so if you have not expressed to GHCU a desire to retain Courtesy Pay before then, you will automatically be opted out.

These changes do not apply to ACH transactions (automatic payment by direct debit from your GHCU account, for example) or to checks—those will still be covered by other overdraft protection services you may already be using. These regulatory changes will only affect ATM transactions (withdrawing money at an ATM) or when you use your debit card to pay for everyday purchases such as groceries, gas or dinner at a restaurant. If you choose to not opt in to Courtesy Pay and you don’t have sufficient funds in your account, your debit card will be denied under these circumstances (including your ATM withdrawals).

How do I opt in?

Members will be given several opportunities to opt in. You may express an interest in opting in now by calling our Virtual Branch or by notifying a staff member at your GHCU branch—but please remember that you must be eligible for Courtesy Pay, and this new opt-in will not take effect until August 15, 2010. If you opt-in now, we will mail required disclosures to you in order to ensure you are making an informed decision. You may also wait until you receive further notification from us in your monthly statement or by mail.

Please be careful. Identity thieves are already taking advantage of the overdraft protection regulation changes and running scams to elicit personal information from the public. Do not supply your member number to anyone unless you’re absolutely certain they are an authorized GHCU employee.

You can read more about the federal government’s changes to overdraft protection programs at the website of the Federal Reserve.

Home equity loans or home equity lines of credit (HELOCs) are great, low-interest ways to have the cash you need, when you need it. GHCU’s home equity rates are generally far lower than credit card rates, and with no annual fees or upfront closing costs, the money you borrow goes even farther.* Additionally, home equity loans can have tax benefits, though you’ll need to consult with your tax advisor to determine if you qualify.

The difference between a home equity loan and a line of credit

A home equity loan usually has a fixed-rate, meaning your interest rate doesn’t change over the life of the loan. Additionally, you receive the amount of the loan all at once and repay it over time, plus interest. The advantage of this type of loan is that you have the money you need upfront—which can be very convenient if you know how much your project is likely to cost.

A home equity line of credit is revolving credit, so you only take out—and pay interest on—as much of the available line as you need at any one time. This is a useful feature when you have several smaller projects strung out over time and you don’t need a large sum of cash all at once.

GHCU has made accessing your home equity funds very simple. With a home equity loan, borrowers receive the money in a single lump sum. Borrowers with HELOCs can access their money either through online banking with an Online Access HELOC or by using a special Visa card with a Visa Access HELOC.

Whatever you need the money for, whether it’s a new roof, repairs to your water heater or simply bringing outstanding debt under one, low-interest umbrella, a home equity loan or line of credit can be a smart, cost-effective solution. Call GHCU or visit a branch for more information: 800-562-5515 or 206-298-9394.

*All GHCU loans are subject to credit approval. Upfront closing costs may apply to some property types.

Of course, in order to realize value from a home purchase, it’s important to buy the right home with the right mortgage. Here are some questions to consider, when you’re preparing to buy:

1. How much home can I afford?  Many lenders and advisors will tell you that your monthly costs should not exceed 28% of your income—and that should include not only your mortgage but also insurance, upkeep, homeowner’s dues if you purchase a condo, and utilities. Don’t forget to add closing and moving costs into your initial purchase estimate. GHCU has an online calculator that can help you establish your home-buying budget.

2. How long am I planning to stay in this house? The answer to this question may help you determine what kind of mortgage will work best for you. If you’re in it for the long haul, a 30-year fixed rate offers stability and predictability; if you plan to sell in a few years, an Adjustable Rate Mortgage (ARM) with a low initial rate may save you money.

3. Where should I get my mortgage? Before you sign, shop around. Compare rates, but also consider closing costs as well. The amount you pay at closing can vary considerably from lender to lender, so be sure you get your Good Faith Estimate (GFE) and add that in when making your budget and choosing your lender. Feeling comfortable with and confident about your lender is important too; don’t hesitate to drop by and chat. Your home is likely to be the biggest investment you’ll make, so only deal with a lender you trust.

4. Is now the right time? Interest rates are still hovering at historical lows, and a fixed-rate mortgage at a low rate can save a homebuyer thousands of dollars in interest. There’s still a glut of homes on the market, and construction companies with idle workers may be willing to cut a deal on building you your new home. If your credit score is in good shape, and you have enough saved to make a solid down payment, now might just be an excellent time to buy.

If you’re considering buying a home, the more information you have, the better. You’re always welcome to stop by a GHCU branch to talk about your mortgage options.

According to the Financial Crimes Enforcement Network (a bureau of the US Department of Treasury), instances of mortgage modification and foreclosure rescue fraud have increased dramatically in the last year. The scams are usually perpetrated by scammers professing to be modification or foreclosure “specialists” and generally fall in one of two categories:

Quit-Claims

When a grantor signs a quit-claim deed, he or she renounces any interest in a piece of property. These deeds are perfectly legal, often used in cases of divorce, sale of property or the passing of property to the next generation. In instances of fraud, however, the owner of the home is persuaded to sign a quit-claim deed. Owners sign, believing this will release them from their mortgage repayment obligations, perhaps in exchange for the right to remain in their homes as renters. Sometime thereafter, the owners, who no longer have a legal right to remain in their own homes, are evicted. The scammers have sold the house, but the original mortgage is still unpaid and the responsibility of the evicted owners.

Foreclosure Rescue

In foreclosure rescue scams, the scammers claim to be loan-modification specialists, perhaps even  affiliated with the distressed homeowner’s lenders. They require a substantial upfront payment for loan modification assistance, then do nothing. Under the Obama Administration’s Making Home Affordable Program, loan modification counseling with a Housing and Urban Development (HUD)-approved housing counselor is free, so no homeowner should work with a counselor who demands pay for his or her services.

If you’re concerned about your ability to pay your mortgage, seek help from a reliable source that can offer genuine assistance. You can find a HUD-approved counselor on the Making Home Affordable website or by calling 888-995-4673. If your mortgage is with GHCU, call our Member Solutions Department at 800-562-5515 (206-298-9394 locally). You don’t have to struggle with possible foreclosure on your own. There’s help.

Overdraft protection—under GHCU’s “Courtesy Pay” program—is a discretionary service GHCU provides for eligible members. If, for example, a member makes a purchase for $100 but only has $50 in his or her checking account, GHCU may honor this purchase, allowing the checking account to go negative, to a maximum of $700. Overdraft fees may be levied for each occurrence. See our rates and fees schedule for more information on fees.

Currently, overdraft protection is automatic for eligible GHCU members who have not chosen to opt out of the program. Federal regulations take effect July 1, 2010, and prior to August 15, 2010, members who want and are eligible for overdraft protection will need to opt in to the program in order to be covered, even if they have been covered in the past.

GHCU has made no changes to its Courtesy Pay program at this point; however, to comply with the new regulation, we will soon be contacting eligible members who have a GHCU checking account with more information about this change and providing them with an opportunity to specify their overdraft protection preference. Those who opt in will continue to receive overdraft protection—at the discretion of the credit union—as long as they remain eligible. For eligibility requirements, please see our Membership & Account Agreement.

If a member elects not to opt-in for this overdraft protection, certain transactions may be denied: specifically, any time a member uses his or her debit card for day-to-day purchases (for example, buying groceries) and ATM transactions (for example, withdrawing cash) but does not have sufficient funds in his/her account. In this case, the request for funds may be denied. Checks and automatic bill payments are not covered by this regulatory change; however, such payments may still be covered through other overdraft protection services you have with us.

To ensure that your preference is recorded quickly and appropriately, if you have a GHCU checking account, please watch your GHCU account statements for your opportunity to opt in for overdraft protection. For more information on the new overdraft rules, you can visit the website of the Board of Governors of the Federal Reserve System.

With rates for mortgages still dipping into historically low territory, many homeowners are wondering if the time is right for a refinance. Refinancing to a lower rate could potentially save thousands of dollars in interest, shorten the time left on a loan or both. How do you know when a refinance is worth the work?

If you’re considering refinancing, ask yourself the following:

• Do you owe more than the house is worth? If what you owe on your home (including any home equity loans or lines of credit) is more than 105% of the home’s value, you may qualify for the federal Home Affordable Refinance Program (HARP) or the Home Affordable Modification Program (HAMP).  If you feel you may be eligible for HARP or HAMP, contact your mortgage servicer for assistance.
• Will you save at least one point on the Annual Percentage Rate (APR)? If your current mortgage rate is 6.25% APR, a rate of 5.25% APR or lower may well save you some money.
• What will your closing costs be? Shop around for a lender with low closing costs—you don’t want to have the savings from your reduced monthly payment eaten up by fees.
• Will you be extending the terms of your loan? If you’re 10 years from paying off your mortgage, then refinancing out another 30 years may not make sense for you. Of course, you can always make additional principle payments. Check that your lender has no prepayment penalty.
• Can you shorten the term of your loan? Perhaps, with a reduced interest rate, you can shift from a 30-year mortgage to a 15-year and save yourself some interest.
• Is your credit score ready? If you believe a refi is in your future, be sure you qualify for the best rate possible by checking and cleaning up your credit histories (you can get these free at annualcreditreport.com).

If you think this might be the right time to refinance, the Personal Finance Representatives at Group Health Credit Union have worksheets and calculators to help you know for sure. Visit one of our branches to get started. But don’t delay! Most financial experts predict a sharp rise in mortgage interest rates in time for the high demands of spring and summer.

There’s never a bad time to begin or boost your retirement savings, but tax season is a particularly good time to consider your IRA options.

What are the choices?

A traditional IRA allows you to make contributions for immediate tax savings. The earnings of the IRA grow tax-deferred until you begin making withdrawals in retirement. The amount of your contribution which you are able to deduct from taxable income may depend on participation in an employer 401(k) and income level.

A Roth IRA doesn’t give you the immediate tax savings,  but withdrawals are tax-free in retirement. There are income limitations that determine who can contribute and how much; consult with a tax advisor for information on eligibility.

Who is eligible to invest?

Anyone under age 70 ½ who is still earning an income can invest in a traditional IRA. For both types of IRA, if you’re under 50, you can invest up to $5,000 a year; those 50 and over can invest up to $6,000, depending on your Adjusted Gross Income (AGI).

Which IRA is better?

Which IRA you choose depends on your needs. Here are some questions that may help you determine which IRA will work better for you:

• Is your first priority to reduce your taxable income for 2009? A traditional IRA may reduce your taxable income when you make your contributions.
• Are you in a stronger position to take the tax hit now than you will be in retirement? The earnings of a Roth IRA are tax-free rather than tax-deferred like a traditional IRA; you pay the tax now rather than later.
• Does participation in your employer 401(k) plan plus your income make you ineligible for the tax benefit of a traditional IRA? You can still enjoy the tax-free, qualified withdrawals from a Roth IRA down the road.
• Are you concerned about the tax burden on your heirs? Roth IRAs don’t require minimum distributions after age 70 1/2, so your earnings continue to grow, and your heirs will be able to take out that money without paying income tax.

Some experts predict that Americans will need as much as 85% of our working income in retirement. That requires a great deal of careful thought and prudent investing. But it’s never too early or too late to begin, so consult with a financial expert to determine your goals and begin working toward a secure retirement. For more information on retirement plans and IRAs, you can visit the IRS.gov website.

If you thought you’d missed out on the tax credit for homebuyers, you’re in luck. On November 6, 2009, President Obama signed into law an extension and expansion of the Homeownership and Business Assistance Act of 2009. The extension of the credit, along with GHCU’s highly competitive rates, local servicing and low fees and the reduced prices of homes in our area make this a perfect time to buy.

This new legislation includes three major changes that may impact your decision to buy a new home:

1. Potential homeowners who buy or enter into a binding contract to buy a principal residence on or before April 30, 2010 may qualify for the tax credit. (The purchase must close on or before June 30, 2010.)
2. For the first time, some current homeowners may qualify for up to $6,500 in tax credit for purchasing a replacement principal residence.
3. The income limit for eligibility for a tax credit has been raised to $125,000 (from $75,000) for single taxpayers and $225,000 (from $150,000) for married couples filing joint returns.

If you’re considering purchasing a new home, it’s still a buyer’s market out there. According to HousingTracker.net, Seattle-area home prices are down 10% from last year, while the number of homes available for purchase is up more than 11%. However, many analysts believe the housing market is beginning to stabilize in many parts of the country, so reduced home prices could begin rising soon.

Some things to consider about the tax credit and whether or not to buy:

• Qualified purchasers who purchase a new residence in 2010 can choose whether to apply the tax credit to their 2009 or 2010 taxes.
• As long as the home remains your principal residence for at least 36 months beginning with your purchase date, and you purchased your home in 2009 or will complete your purchase before the 2010 deadline, there is no requirement to pay back the credit.
• Taxpayers who have not owned a principal residence in the three years prior to the purchase of a new home are considered “first-time homebuyers” and may qualify for the credit of up to $8,000. Also, homeowners who have lived in their current home for at least five years of the last eight, and who purchase a replacement home after November 6, 2009, may qualify for the lesser tax credit of up to $6,500.

More information on the tax credit can be found on the IRS.gov website.

Remember: GHCU offers highly competitive rates, low fees and local servicing, so if you’re ready to buy a new home, let us help you find room to move!

A high credit score is always a good goal, but in this difficult economy, credit is increasingly difficult—and expensive—to come by. However, those with the highest credit scores get the best rates on loans and credit cards. Here are some tips for improving any credit score:

• Get current on your bills and stay there. Late payments or debts assigned to collection agencies can have a substantial negative impact on your credit score. (Hint: online bill pay can reduce the risk of forgetting or losing a bill.)
• Keep your credit card debt under 1/3 of available credit. And don’t open new cards to increase your credit, as suddenly having lots of available credit can make you look like a risk.
• Don’t close out old cards. Length of credit history is a significant portion of your score, so if you have a good history with a card, keep it!
• If you need to build or rebuild your credit history, consider starting with a secured credit card. These cards are“secured” by a savings account that you establish, but unlike a debit card, the money isn’t taken from the account. You carry a balance and make payments, just like with a regular credit card. And because lenders for these cards report to credit agencies, secured cards are perfect for establishing or repairing credit history.
• Don’t assume that a low credit score is forever. For more help with credit scores or other money-management issues, contact BALANCE—a free, confidential counseling service open to all GHCU members. You can reach BALANCE through our homepage at ghcu.org.

At 26% of all cases, credit card fraud still accounts for the highest percentage of identity theft. So how can you protect yourself from illegal credit card purchases in your name?

• If your credit card offers some sort of additional protection for online purchases, take them up on it! (GHCU credit cards can be listed on “Verified by Visa,” an additional line of protection that ensures no one can use your credit card online but you.)
• Sign your credit card! Many people believe putting “Ask for ID” will eliminate any chance of someone using their card for in-person purchases, but what it actually does is negate your contract with your credit card issuers. Fail to sign the back of your card, and you have no protection if someone else makes fraudulent purchases in your name—that makes you liable for the entire amount. Go get your wallet and a pen and sign all your credit and debit cards right now. Really.
• Insist that cashiers and others who take your card for payment ask for ID. While that may not help you directly, the more we insist, the more this will become common practice. And please don’t object when a cashier asks you for your ID—this is to protect you and all of us who buy with plastic.
• Protect your wallet! Never leave cards unattended, even in a place you believe to be safe. The workplace is one of the main places where credit cards disappear. Your car is also a poor choice. Like a dog on a hot day, take your card with you or leave it at home.
• If your card disappears, report it immediately. Most fraud takes place within the first seven days after the card goes missing.
• Check your monthly statement. Arduous as this is, it’s a great way to catch fraudulent purchases early. Plus it helps you track your spending, which can be a useful wake-up call for many of us! I treat my credit card like a debit, listing all my purchases in my checkbook register. I use black ink for checks, debit purchases or cash and list all credit card purchases in red. This makes it easy to compare my record against my monthly statement.
• Never give your credit card number on an insecure website. Check for the “https” in the URL and the little lock at the bottom or top of your screen—these indicate a secure site. Also be sure the website has a privacy policy and won’t distribute any of your information without your knowledge and consent.
• Draw a line through blank lines on a receipt (like the “tip” line, if you choose to give a cash tip). Blank lines can be filled in by other folks, so don’t give them the opportunity.
• If you have lots of credit cards, only carry those you need.
• If bills go missing or your new credit card doesn’t arrive promptly, call the issuer. Someone may have redirected your mail to a different address.
• Have a secure mailbox for ingoing and outgoing mail. Better yet, choose online banking and bill pay. Remember that mailbox theft is one of the major targets for identity thieves! GHCU’s online banking and bill pay are secure and free for members.

If you have any concerns about your credit card or about identity theft in general, sound the alarm. Call your financial institution right away to minimize the time ID thieves have to wreak havoc on your identity and reputation. (GHCU contact information is here).

The US Department of Justice gives a very thorough to-do list if you believe you’ve been a victim.

Remember: prevention is better, easier and cheaper than cure! Take steps to protect yourself from identity theft.