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.

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.

• Tax records: Keep for seven years, then shred.
• Pay stubs: Shred after you’ve done your taxes for that year.
• Credit Union/Bank statements: Shred after one year, unless they have information that could affect taxes.
• Medical records: Keep at least one year, possibly as long as five if there’s the possibility of a dispute over reimbursement.
• Phone/Utility bills: Shred once paid, unless you need them for tax purposes.
• Home improvement/sales/purchase: Keep for six years after you sell; some expenses may lower your capital gains tax after the sale of your home.

Other good ways to avoid identity fraud are to opt for eStatements instead of paper and pay bills online rather than through the mail.

If you sign up for eStatements at GHCU, your statements are available for up to a year online, or you can download them to your computer. Additionally, with the GHCU online bill payer, your bills are available for you to look at for at least one year, often longer. Call GHCU for help signing up for online banking and bill pay: 800-562-5515 (206-298-9394 locally).

• Tax benefits. Contributions to a traditional IRA now can reduce your taxable income for 2009. Qualified earnings from a Roth IRA are tax-free when you begin taking distributions.
• If you are under 50 in 2010, you can contribute up to $5000 or the amount of your taxable compensation for 2010, whichever is smaller.
• If you are 50 or older in 2010, you can contribute up to $6000 or the amount of your taxable compensation for 2010, whichever is smaller.
• The maximum amount you can contribute to a Roth IRA may be reduced, depending on your Modified Adjusted Gross Income (MAGI).
• How much of your traditional-IRA contribution is tax deductible depends on your MAGI and if you are covered by a retirement plan through your employer. Consult with your tax advisor.

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.

For entertainment value, most people rate doing taxes right up there with root canals and organizing the garage. Taxes can be confusing, time-consuming and frustrating. GHCU is happy to present an easier way to do taxes and a great tool for managing your money all year long: TurboTax Online.

TurboTax Online (TTO) is a faster, more accurate way to do taxes. Because TTO is integrated into GHCU’s online banking, tax and account data are securely, automatically imported into the TurboTax program. And you can choose to have your return directly deposited into your account, saving you time. Since your information will be safely stored with TurboTax, you’ll have records that carry over from year to year—saving you the time and annoyance of digging up old records to find information. This information is secure and can only be accessed by your unique password and user name.

There are several versions of TurboTax Online available to GHCU members, including a free Federal Edition. For those members who choose a paid product, a 15% discount will be applied to their chosen version. Members who are already using a desktop version of TurboTax can integrate it with GHCU’s TTO version and still receive the discounted price.

Do you want to use TurboTax Online but are not yet enrolled in online banking? You can quickly and easily register for GHCU’s free online banking by calling our Virtual Branch at 800-562-5515 or 206-298-9394. Once you’re signed on to online banking, you can enjoy its many additional benefits: see your accounts at any time, transfer funds, order checks and conduct many other financial transactions from the comfort of your home or office.

If you have online banking and would like to take advantage of this service, log in to your online banking account and check for the “My TurboTax” tab at the top of the page. It’s that simple to get started!

What resolutions will you make this January 1? Year after year, Americans vow to exercise more, eat better, quit smoking—clearly we’re a nation concerned with our physical health. But what about your fiscal health? Here are three things you can do to strengthen your family’s finances and get fiscally fit!

1. Look over your insurance policies; tell provider(s) about changes. 
   Saving money is great, but not if you have to skimp on coverage. If you’ve had changes in your life over the past year, now’s a good time to reevaluate your insurance needs. If a child passes a certain age limit (usually between 20-24), he or she may have to be removed from your health insurance policy, which could lower your rate. Did you sell or buy a car? One car more or less can impact your auto insurance costs. Did you quit smoking? That may also bring your health insurance rates down. Have you added a new member to your family? If you haven’t had a dependent before, now may be the time to look into life insurance. Talk to your insurance company about changes that may have an effect on your rates and also about packaging several policies (auto, life, home, renter’s) for better rates on all. If your employer offers it, a flexible spending account (FSA) or health savings account (HSA) can also save you money. With these accounts, you determine an amount from each paycheck to be set aside to cover health costs such as co pays, prescriptions, even over-the-counter medications. The deductions come from your paycheck on a pre-tax basis, saving you from paying taxes on that money. HSAs even accumulate tax-free interest! The only drawback: with an FSA, you have to spend the total amount before the end of your company’s benefit year, or the money is gone forever.
2. Make sure your savings are earning.
   Money sitting in a savings account is a little like a teenager on the couch—lots of potential, but not much happening at present! If you have savings, now may be a good time to consider if your money is doing all it can for you. Money market accounts, certificates, IRAs: all of these products make your money work harder by earning more interest.If you need to stay flexible and liquid, short-term certificates are a great way to earn without tying up your money for long periods. Money market accounts allow you even greater access to your money while still earning interest higher than a traditional savings. If liquidity isn’t your primary concern, longer-term certificates get higher rates of return. Consider also that GHCU’s 12- and 24-month certificates come with a free one-time bump. If GHCU’s rates go up during the term of your certificate, you can bump up the rate of your existing certificate (for the remainder of the term) to match.If you’re looking ahead to retirement, a Roth IRA can help you build equity and avoid tax when you start withdrawing your money. On the other hand, investing in a traditional IRA now can help you reduce your tax burden for 2009.
3. Do or redo the family budget.
   Planning out your budget is a bit like going to the gym—not much fun while you’re doing it, but you’ll feel great when it’s over. And like going to the gym, it’s not something you can do just once if you want the full benefit. Changes in your life should drive changes in your budget. A new baby (or even a new puppy), a divorce or a marriage, a change in your job situation: all of these can impact your finances, and planning now can save pain later.If you’re spending too much, can you reduce some of your discretionary expenses? If you’ve kept good records, you’ll know if you stayed on track or allowed a few more splurges than you’d budgeted for. Can you limit the lattes, dump the gym membership and buy a cheap bike, have game night at home with the kids instead of going out to a restaurant or movie? Perhaps, instead of having your own magazine subscriptions, you can get to know the periodicals area of your local library. Can’t cut back in one area? Make concessions in another. Maybe your employer subsidizes a bus pass so you can save on gas, for example.Tracking your spending enables you to see where you can make several smaller adjustments instead of large, painful spending cuts. And when your budget works without making you feel overly deprived, you’re far more likely to stay with it. Kiplinger offers an excellent, free budget worksheet to help you get started.

A lot of people are happy to tell you what to do with your money: save it, spend it, invest it, splurge! But one thing many consultants appear to agree on is the need for an emergency fund. An emergency fund is a supply of cash, immediately available, to handle expenses should something bad happen. An accident, an illness, a job loss or divorce—no one likes talking about these things, but they do happen, they can really impact your finances, and being prepared for them can make a bad situation better.

Here are some questions to consider while setting up your emergency fund:

What’s an “emergency”? Everyone involved must agree that an emergency fund is for just that: emergencies. A one-time deal on a new car does NOT constitute an emergency. So how do you define an emergency? Clarifying that now can avoid conflict later.

How much do you need? There is a disparity of opinion on how much is “enough.” Is $1000 enough? How about the amount required to keep your home running for three months? Some say enough to live on for a year is best. The “right” amount is whatever works best for you. And as your life circumstances change, you’ll likely want to revisit your emergency fund to determine if you have the right amount in it.

 Where will you put it? If you’re the type who finds available money too much of a temptation, then it might be best to put the money where it can be out of sight and out of mind. A savings account or money market account keeps the money available and liquid but also earning interest. Just don’t accept a debit card, if it’s offered, or hide it away.

Do I pay off high-interest debt or start an emergency fund? This is entirely up to you, of course, but consider this: if you have an emergency, how will you pay for the medical bills? How will you keep the home running if an income is lost? If your answer is “credit cards,” you might decide that paying into an emergency fund could ultimately save you money.