Is There Such a Thing as Good Debt?

Posted on August 26, 2014 by VP of Marketing and Business Development Jessica

Most of the time, the word “debt” has negative connotations. Debt costs you money and therefore takes money away from financial goals like saving and investing.
So could there ever be good debt? That’s no easy answer. How you use debt has a big impact on whether or not you can consider it “good.” If you have too much of a “good” thing — that’s when it can turn into bad debt. So let’s consider 3 types of debt: investing in a college education, buying a home, and starting a business.

1. Are Student Loans Always Good Debt?
Student loans aren’t always good debt, because most people don’t consider how long they’ll be paying back their student loans when they take them out. But that doesn’t make them bad. If you take them out to obtain a job that you could have only secured with a college education and earn enough to make your student loan repayments manageable, your student loan debt was a good debt.

Here are some tips for student loans:

Keep your total loans under your projected starting salary when you graduate. If you’re able to do that, you should be able to pay them off with the standard 10-year plan.
Cut down on the loan amount. Get college credits while you’re in high school, go to a community college for your first two years, stick to a state school, and apply for scholarships.
Get a job to pay for your living expenses while you’re in school so you don’t take out loans for living expenses.
Keep in mind that private student loans don’t offer the flexibility of federal loans, so try to apply for federal student loans first.

2. How Much Should I Borrow for a Mortgage?
Owning a home used to be considered the American dream, and for many people it still is. Most people need to take out a mortgage for their purchase. If you think you’ll be in the same area for several years and can put a 20% down payment on a home, a mortgage could be a good long-term investment. Interest rates on mortgages are historically low, and owning a home can also provide tax benefits. The nice thing about a home is that it’s an investment you can live in.

However, many people end up buying a home without thinking about how it will affect their lifestyle or how they’ll pay their mortgage if an emergency came up. To avoid this, here are a few rules of thumb:

Make a 20% down payment so you can avoid paying private mortgage insurance.
Don’t use your entire savings account for a down payment. Homes are a hotbed for dipping into your emergency savings, as there are far more unexpected expenses that come up than when you’re living in an apartment.
Boost your credit score before you buy. Make sure you have a score above 700 so you can qualify for the best mortgage rates available. This can save you thousands of dollars in interest over the life of the loan.
If you think you might move in the next five years, you might want to rent so you don’t have to move during a down market and possibly sell your home for a loss.
In figuring out your monthly housing costs, the principal and interest on the mortgage loom large. But don’t forget property taxes, insurance, utilities, repairs, landscaping, snow removal and other factors. Make sure that your monthly housing expenses leave room for other expenses too.

We offer a number of great mortgage options, including refinancing – click here to learn about our 10, 15, 20, and 30 year mortgage features and see what a good fit for your home is!*

First Financial also offers a Mortgage Rate Text Messaging Service so you can receive updates on our low Mortgage Rates straight to your mobile phone. You can subscribe to our Mortgage rate text message service by signing up for text alerts, and receive instant notification when our mortgage rates change.**

3. What About Using a Loan to Start a New Business?
Entrepreneurship seems to be the new job security for many people in this generation. Incurring debt to start a business can be good debt if the funds help you to build a sustainable livelihood that allows you to repay any money borrowed and improve your financial situation. Just be cautious of how much debt you’re taking on.

Follow these tips to be financially smart and successful in your business:

Self-fund your business venture with savings first.
The smaller the investment, the quicker you can make money.
Do your research and get experience in the field before your launch. Some business opportunities require much bigger up-front investments, which may lead to a small business loan.

Did you know First Financial offers Business accounts, loans, and services? We understand that not every business is the same and, therefore, not every loan need can be the same. This is exactly why we look at each individual business and create a customized lending solution to meet your specific needs. Please contact us at business@firstffcu.com and we’ll be happy to provide you with more information on business loans and services.

Debt Costs Money, So Use it Wisely
Debt can be good, but only if it helps you leverage your assets to build wealth. Every good debt has the potential to turn bad, so do your research first. The fewer monthly obligations you have, the more money you have to fund a lifestyle that you love.

Don’t forget about our free, online debt management tool, Debt in Focus. In just minutes, you will receive a thorough analysis of your financial situation, including powerful tips by leading financial experts to help you control your debt, build a budget, and start living the life you want to live.

* A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Subject to credit approval. See Credit Union for details.

**You must check the Text Message Signup box when registering in order to receive rate change text messages.⁺ If you do not receive an automated confirmation message after enrolling, please text “Yes” to (201) 808-1038

⁺The Text Message Signup box must be checked in order to receive text messages. Standard text messaging and data rates may apply.

How to Assess a Neighborhood When House Hunting

Posted on August 19, 2014 by Marketing Intern Brianna

When you buy a house, you aren’t just buying a house. In a way, you’re buying a neighborhood. After all, you’ll likely choose a home partly because it’s close to work, the schools are great, or it’s walking distance to restaurants and stores.

In fact, you could argue that picking the right neighborhood is more important than picking the right house. The last thing you want is to buy property in a place where everyone is trying to leave. So if you’re looking for a home for your house, here are some things to consider.

1. What to look for. If you’ve been focused on your dream house and not your dream neighborhood, the most popular areas tend to be ones that offer an instant sense of community to those relocating there. If living in the right community is important to you, then it’s important to think about these five factors:

Aesthetics. An attractive neighborhood indicates the residents care about it.
Affordability. Sure, you want an inexpensive house, but you also want to be able to afford the cost of living in the neighborhood.
Safe environment. Nobody wants a criminal as a neighbor.
Easy access to goods and services. Can you make a quick run to the bank or grocery store, or will every day be a headache behind the wheel due to traffic congestion or construction?
Walking distance to goods and services. If exercise and a sense of community are important to you, find a house near the establishments you’ll be frequenting that is accessible by foot.

2. Online research. You probably use websites like Zillow.com, Realtor.com, Trulia.com, or Homes.com to search for a new house. But there are neighborhood-related websites and apps as well. Here’s a sampling of what’s available:

HomeFacts.com. This website contains mostly neighborhood statistics and information, but it also has data on more than 100 million U.S. homes (type in the street address of your prospective house to get the scoop on the whole area). Wondering how many foreclosures are in the area or if there are any environmental concerns? This is your site.
NeighborhoodScout.com. Read up on crime, school, and real estate reports for the neighborhood you’re considering.
Greatschools.org. Here, you can find reviews written by parents and students of schools in the neighborhood you’re considering. You can also find test scores and other data that may help you decide if this is a school you want your kids to attend.
CommuteInfo.org. This site offers a commuting calculator. Plug in information like miles driven and how many miles per gallon your car averages, and the calculator will give you an average cost of what your commute costs may look like in a month and in a year.

3. Red flags. As you’d expect, spotting a neighborhood on the decline isn’t rocket science. For example, pay attention to the property maintenance – overgrown lawns and shrubs, toys left outside, garbage bins not taken in – often reflect that the area is not well cared for and it can negatively affect the property value.

Though things are subject to change, selecting the right neighborhood is important. Your neighborhood’s character will likely shape your family’s character.

If you’re looking to purchase or refinance a home, First Financial has a variety of options available to you, including 10, 15, 20, and 30 year mortgages. We offer great low rates, no pre-payment penalties, easy application process, financing on your primary residence, vacation home or investment property, plus so much more! For rates and more information, call us at 732.312.1500, Option 4 for the Lending Department.*

⁺The Text Message Signup box must be checked in order to receive text messages. Standard text messaging and data rates may apply.

Article courtesy of US News Online by Geoff Williams.

The Best Times to Buy, Sell, or List a Home

Posted on May 23, 2014 by Marketing Coordinator Nicole

selling-home-vegas A common question from a buyer or seller is: what is the best time to buy or sell a home?

In the clothing world, it makes sense to get the best “deal” on winter clothes at the end of winter and that you likely will pay top dollar for a swimsuit when it’s warmer. Does the same trend hold true for real estate purchases and sales? Not really. But there are some considerations a buyer or seller should make as they enter the market that could have an impact on the transaction.

Spring and fall are better times for buyers.

Let’s be clear. You can’t ever time a home purchase. Buying a home isn’t like buying a car or an iPad. The home buying process is a journey, one that happens on your own time and only after you’ve done enough research, seen enough homes, and have your financial house in order.

At any one time there is a brand-new buyer entering the market and then another who has done enough research and becomes a very serious buyer. Nobody can control the evolution, but something for a buyer to consider is that real estate inventory tends to fluctuate by season. Each spring and fall we tend to see an increase in home inventory, and more inventory means more options for buyers.

Holidays and winter are the best times for sellers.

It’s not conventional for a seller to list their home before the holidays or in the dead of winter for obvious reasons, but serious buyers don’t care about the season or timing. At any one point of the year, there will be a very motivated, experienced buyer ready to make an offer, no matter the season. There have been contracts written on Thanksgiving, escrows closed on New Year’s Eve and there are even serious buyers who have made offers using DocuSign from a beach in Hawaii.

Sellers believe that it’s more conventional to list for the spring “selling” season and then again after the summer. If you go the conventional route, you will see more competition. If you can sell “off season,” you might fare better because there are still serious buyers, but less homes for sale.

Best time to list a home.

The Sunday open house, particularly the first Sunday of the month, is the holy grail of real estate.

For decades, agents and sellers worked hard on a listing with a deadline being the first open house. The “for sale” sign, which made the listing official a generation ago, would go in front of the house days leading up the first open house. In the digital age, the listing goes “live” online.

Sellers and agents work hard to clean, paint, or prep the home in time for the photo shoot. Agents and sellers tend to rush to the finish and you will see many listings hit the market late Thursday afternoon or Friday morning, with Sunday being the first showing. Instead, try listing on Monday or Tuesday and don’t do any showings until the open house on Sunday. You can build momentum and have a very strong first open house.

As much as buyers and sellers try to strategize the timing of a real estate purchase or sale, it’s never that easy. Unlike Macy’s or Target, who control inventory and monitor competitive activity, there isn’t one seller in real estate. Sellers are unrelated and disconnected and the types of homes are different making it nearly impossible to “time” a purchase or sale.

If you’re looking to purchase or refinance a home, First Financial has a variety of options available to you, including 10, 15, 20, and 30 year mortgages. We offer great low rates, no pre-payment penalties, easy application process, financing on your primary residence, vacation home or investment property, plus so much more! For rates and more information, call us at 732.312.1500, Option 4 for the Lending Department.*

*APR = Annual Percentage Rate. Subject to credit approval. Credit worthiness determines your APR. Rates quoted assume excellent borrower credit history and are for qualified borrowers. Your actual APR may vary based on your state of residence, approved loan amount, applicable discounts and your credit history. Higher rates may apply depending on terms of loan and credit worthiness. Minimum mortgage loan amount is $100,000. Available on primary residence only. The Interest Rates, Annual Percentage Rate (APR), and fees are based on current market rates, are for informational purposes only. Rates and APRs listed are based on a mortgage loan amount of $250,000. Mortgage insurance may be required depending on loan guidelines. This is not a credit decision or a commitment to lend. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. See Credit Union for details. A First Financial membership is required to obtain a Mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties.

⁺The Text Message Signup box must be checked in order to receive text messages. Standard text messaging and data rates may apply.

The Hidden Costs of Buying a Home

Posted on May 16, 2014 by VP of Marketing and Business Development Jessica

You’re looking for a house and see the perfect listing. And it has a big number on it, say $300,000. If you’re like most prospective homeowners, you imagine you will soon be talking to a lender and getting a loan for this amount.

But as veteran homebuyers may already know, you are going to pay much more than $300,000.

Yes, almost everything we buy has a hidden cost. You buy a toothbrush for a few dollars, and since you’ll have to purchase toothpaste, the ownership cost of a toothbrush is more than $2 – especially if you throw in a toothbrush holder. Obviously, the hidden costs of buying a house are far more complex. And if you aren’t prepared for them, you may come away from the experience feeling as if you’ve had the wind knocked out of you.

So if you’re thinking of buying your first house, be alert and prepared for these hidden costs that you need to keep in mind:

Home inspection costs. Before you close on a house, your mortgage insurer may require a home inspection, which can run several hundred dollars. But even if an inspection is not required, it’s worth paying a professional to evaluate the house so you can avoid spending hundreds of thousands on a train wreck disguised as a house.

Survey costs. Your lender may want you to have a professional survey of the property, so everyone knows exactly where your land’s boundaries are. That’s another several hundred dollars.

Taxes. You probably know you’re going to be paying taxes, but it can be easy to forget that you’ll likely need to pre-pay those taxes at closing. At the beginning of your mortgage, it can be a shock when you’re saddled with paying a couple months’ worth of property taxes, maybe a year’s worth of homeowner’s insurance, and possibly homeowner’s association dues as well.

Fees. Maclyn Clouse, a finance professor at the Reiman School of Finance at the University of Denver, rattles off a list of fees you may also pay at closing:

Government recording charges: The cost for state and local governments to record your deed, mortgage, and loan documents.
Appraisal fee: The cost for an appraiser to decide how much your house is worth.
Credit report fee: Your lender had to pay to get your credit report, so oftentimes you will cover that cost.
Title services and lender’s title insurance: Fees related to your home’s title.
Flood life of the loan fee: The government tracks changes in your property’s flood zone status, you’ll pay a small fee.
Tax service fee: Another pretty minor fee – this service ensures the taxes previously paid on the house are up to date (if your home was previously owned).
Lender’s origination fee: The charge for processing your loan application.

Moving costs. Will you be gathering friends and family to help you move your furniture and possessions into your home, or do you need a moving truck? Don’t forget about the cost of movers, if you are hiring them.

Total cost of ownership. Someone will have to mow the lawn with the mower you’re fated to buy, or you’ll hire a service. You’ll also probably need furniture and maybe a major appliance, like a washing machine. Even paint and paint supplies costs money and adds up quicker than you think.

Be ready for anything. Some houses (previously owned) come with propane or oil tanks, and at closing buyers have been asked to reimburse the sellers for the fuel remaining in the tank – in certain cases.

Looking for a mortgage? Check out First Financial’s mortgages, featuring great rates and low fees. We also have a 10 year mortgage as well – great for refinancing!*

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Article Source – Geoff Williams of Money.USNews.com: http://money.usnews.com/money/personal-finance/articles/2014/03/12/the-hidden-costs-of-buying-a-home

5 Costly Home Buying Myths

Posted on January 17, 2014 by VP of Marketing and Business Development Jessica

If you’re considering buying or selling a home, you may have asked co-workers, friends and family for advice. But you might want to check with the professionals, because the rules of the real estate game are different today than they were 20 or even 10 years ago. Due to this monumental shift, there are lots of misconceptions about buying a home that could cost you big when it comes time to go house hunting. Here are five of the most common real estate myths.

1. You Have to Use a Real Estate Agent. If you’re thinking about buying or selling a house without a real estate agent to save on commission, it’s important to understand the full impact of that decision. Buying and selling is a lot of work and there’s a reason real estate agents still exist and are involved in almost all transactions. For most of us, the sale of a house represents one of the biggest financial transactions we’ll ever make.

It’s nice to have someone there guiding you along the way. But while having an agent can be a good thing, doing it on your own is not as unimaginable as it once was. Sites like Redfin and Zillow have virtually eliminated the need for the multiple listing service and many homebuyers are finding properties for themselves before contacting a real estate agent. If you’re the do-it-yourself type, you might just be able to buy or sell a home on your own in today’s market.

2. Buying Always Beats Renting. One reason people give for not wanting to rent is: “I don’t want to pay someone else’s mortgage.” However, there are hidden costs that go into owning a home. The nice thing about renting is that you can always leave for a nicer place for a year or two. Or maybe you lose your job and need to downgrade for a few months before you get on your feet again. Once you buy a house, there’s a lot less flexibility. Just the fees involved in buying and selling a house will make a major dent into your savings if you sell too soon after buying.

3. This House Is Special. Once you’ve finally found that perfect house, the inclination is to think you won’t find another that you like nearly as much. There will always be another property. If something doesn’t feel right or the price is too high, don’t be afraid to wait for the next one. As long as you have realistic goals, no house will ever be truly one of a kind.

4. Your Credit Must Be Perfect. With the recent housing bubble, came a wave of lending restrictions and loan tightening. Most people assume that they have to have stellar credit to get a loan these days, but that’s not always the case. Lenders are often willing to work with buyers who have less-than-perfect credit. If you’re concerned about your credit, you may want to work on your credit score before you buy; people with higher credit scores are offered the lowest interest rates on mortgages.

5. A 20% Down Payment is a Must. Twenty percent used to be the magic number when it came to down payments, but it’s certainly not the only option. It’s possible to get a mortgage now with little or no money down. If you have a stable income but are unwilling or unable to fund a large down payment, you may still be able to buy a home.

Apply for a 10, 15, 20, or 30 year First Financial Mortgage today!* You can also subscribe to our Mortgage rate text message service by signing up for text alerts, and receive instant notification when our mortgage rates change.***

Note: You must check the Text Message Signup box when registering in order to receive rate change text messages.⁺ If you do not receive an automated confirmation message after enrolling, please text “Yes” to (201) 808-1038

⁺The Text Message Signup box must be checked in order to receive text messages. Standard text messaging and data rates may apply.

Article Source: http://www.foxbusiness.com/personal-finance/2013/12/19/5-costly-homebuying-myths/

What Kind of Home Buyer Are You?

Posted on May 3, 2013 by VP of Marketing and Business Development Jessica

You picked your neighborhood, know your price range and are ready to start shopping for a new home. But before you start your hunt, it’s important to identify what kind of buyer you are to avoid wasting time.

For many home buyers, school district, neighborhood and affordability dominate the decision-making process, but knowing your “buyer personality” will help define and focus your search.

For instance, if you want a move-in-ready home but never convey that to your realtor, you can waste time looking at fixer uppers. Or if you care about the environment, you may want to see only green homes, which could require a more specialized agent.

Personality #1: The Move-in-Ready Buyer

These are the home buyers who want to purchase a house that only requires them to move in their furniture and start decorating.

These buyers are not afraid to look at many properties to find the perfect home that won’t force them to roll up their sleeves for improvements or repairs.

Personality #2: The Minimalist Buyer

Minimalist buyers aren’t afraid to make changes to a home as long as they are minor. This type of buyer is drawn to homes that are structurally sound, but may need some new paint, updated curb appeal or other minor cosmetic changes.

Personality #3: The Fixer Upper Buyer

This group of buyers can see the potential of almost any home and aren’t afraid to buy a home needing renovations.

Sometimes these buyers are first-time buyers looking for a home to put their stamp on something and other times it’s a savvy buyer looking to make money off a property with a repairs and renovations. Either way, a fixer-upper buyer won’t think twice about remodeling the basement, bathroom or even the entire house.

Personality #4: The Life Timer Buyer

The recession has changed the way people view the home buying process, and many first-time home buyers aren’t looking for the starter home – they are seeking out a home they can stay in for 10, 20 or even 30 years.

These buyers tend to have young children, planning a family or have multiple generations living under one roof. They plan to buy a home and stay in it for the long haul.

Life-time buyers may not be at a certain life cycle when they purchase the home but have the ability to plan for the future and purchase accordingly.

Personality #5: The Eco-Warrior Buyer

For this type of buyer, going green isn’t a fad–it’s a lifestyle. The eco-warrior buyer is always looking for ways to conserve natural resources and wants to buy a home that is energy efficient and uses minimal water and electricity.

An eco-warrior also wants a home that is close to work, entertainment and groceries to reduce his/her carbon footprint. Since eco-warriors have very specific requirements whether its geo thermal heating or solar panels, they should go with a real estate agent that specializes in that area.

Figured out what type of buyer you are and ready to take the next step? Apply for a First Financial Mortgage today!*

You can also subscribe to our Mortgage rate text message service by texting “firstrate” to 866-956-9302, and receive instant notification when our mortgage rates change.**

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, or attends school in Monmouth or Ocean Counties. Subject to credit approval. See Credit Union for details.

**Standard text messaging and data rates may apply.

Article Source: http://www.foxbusiness.com