Mortgage Rates

Mortgage Rates Remain Near 7-Month Lows

Mortgage rates touched seven-month lows early this month, and stayed there last week.
According to Bankrate.com’s weekly national survey, the benchmark 30-year fixed mortgage rate inched lower last week, moving from 4.04 percent down to 4.02 percent.

The larger jumbo 30-year fixed nosed up to 4.00 percent, and the average 15-year fixed mortgage rate settled at 3.25 percent. Adjustable mortgage rates were mixed, with the 3-year ARM slipping to 3.48 percent while the 7-year ARM climbed to 3.60 percent.

Bankrate points out that, despite another interest rate hike by the Federal Reserve, mortgage rates are hovering at the lowest point since mid-November and are little changed from where they were 18 months ago when the Fed started boosting interest rates.

The common theme then, as now, has been a slow growth economy with low inflation. This week brought additional evidence of low inflation and the recent softening has garnered the attention of the Fed, who noted in their statement that they are “monitoring inflation developments closely.”

Mortgage rates are closely related to yields on long-term government bonds, which appeal to investors any time uncertainty, or low inflation, is in the air.

Car Prices

Car Prices: Something Funny Is Going On

People are paying way too much for new vehicles these days, with average transaction way out of whack with average household incomes.

According to Kelley Blue Book, the estimated average transaction price (ATP) for light vehicles in the United States was $33,261 in May 2017. According to the government, the median household income in the U.S. was $56,000 in 2015.

This is just too much, once we apply the time-tested “20/4/10” rule.

Use This Rule to Determine How Much Car You Can Afford:

This rule stipulates that a car is affordable when a buyer can make a down payment of at least 20%, use financing lasting no longer than four years — with principal, interest and insurance not exceeding 10% of a household’s gross income.

If a median-income household cannot buy a median-priced new vehicle using the “20/4/10” rule, then we have a problem with affordability.

So, why are new vehicle sales so strong? The answer to this is simple: people aren’t following the “20/4/10” rule, and automakers keep coming up with ingenious new financing strategies that ensure they won’t.

Think about the number of “0 Down” financing schemes on offer; think of all of the factory leasing deals.

Leasing used to represent a tiny portion of new vehicle transactions. Today, more than 50% of all new vehicles are leased in certain vehicle categories.

In short, car companies are making it easier than ever to help Americans drive away in vehicles that they cannot really afford (according to the “20/4/10” rule).

Don’t Buy the Payment

Car salesmen are trained to “sell the payment” to buyers. If the monthly payment is do-able, a sale can be made. The trouble is, getting that monthly payment down to an “affordable” level often means stretching payment out to 60 months, 72 months or even more. It also means factory lease deals that may seem cheap, until you factor in that they leave you with nothing at trade-in time.

Before You Shop for a Vehicle, Go See ProMedica FCU

The simple truth is that following the “20/4/10” rule is still an excellent way to buy a new vehicle without threatening your long-term financial health.

If you’re considering a new vehicle purchase, do yourself a favor and go see ProMedica FCU before you drive to a dealer lot.

ProMedica FCU will help you to see how different car buying scenarios fit in with your other financial goals – such as saving for emergencies and retirement. It’s the best way to ensure that you don’t buy yourself a shiny new mistake.

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Identity Theft

Consumers, be wary: Identity theft is on the rise

If you’ve been a victim of identity theft, you’re not alone. Thirty-three percent of Ohioans reported that they’d been victimized by fraud and/or identity theft in a year-end 2016 survey conducted by the Ohio Credit Union League. More could have suffered at the hands of fraudsters without knowing it yet.

In 2015, Ohio had the twelfth greatest number of identity theft-related complaints filed with the Federal Trade Commission. Dayton ranked 34th and Cleveland/Elyria ranked 38th among the 50 largest U.S. metropolitan areas with the most identity theft-related consumer complaints.

According to a study by Barclays, most identity theft that occurs happens in the United States (about 47 percent); 55 percent of these identity thefts are caused by a malicious outsider, followed by an accidental loss of the card (25 percent). EMV chips (which stands for “Europay, MasterCard, and Visa” and is a global standard to authenticate and secure global card transactions) have caused a decline in the use of counterfeit cards.

These days, 45 percent of identity theft is committed online. Online fraud gives hackers and predators a multitude of ways to get your information. From creating fake forms to posing as legitimate companies, the internet has spawned a wide array of tactics to get your personal and financial information, which means consumers need to remain vigilant.

Some of the most common forms of identity theft are:

• Child ID theft: Children’s IDs are vulnerable because the theft may go undetected for many years. By the time they are adults, the damage has already been done to their identities.

• Tax ID theft: A thief uses your Social Security number to falsely file tax returns with the Internal Revenue Service or state government.

• Medical ID theft: This form of ID theft happens when someone steals your personal information, such as your Medicare ID or health insurance member number, to get medical services or to issue fraudulent billing to your health insurance provider.

• Senior ID theft: These ID theft schemes target seniors. Seniors are vulnerable to ID theft because they are in more frequent contact with medical professionals who gather their medical insurance information, or caregivers and staff at long-term care facilities who have access to personal information or financial documents.

• Social ID theft: This type of thief uses your name, photos, and other personal information to create a phony account on a social media platform.

Despite the prevalence of identity theft, only half of the League’s survey respondents closely monitor their accounts to check for fraudulent transactions. On the other hand, 10 percent figure that someone will let them know if any of their accounts have been compromised and just leave protecting their identity and accounts to their financial institutions.

Here are some steps savvy consumers can take to protect themselves from identity theft:

• Guard your (and your children’s) personal information: Don’t carry your Social Security card in your wallet or write your number on your checks. Only give out your Social Security number when absolutely necessary. Ask if there is an alternative way for you to verify your identity. Don’t respond to unsolicited requests for personal information and store personal information in a safe place.

• Keep an eye on your accounts: Pay attention to billing cycles. If bills or statements are late, contact the sender. Collect mail promptly and put your mail on hold when you’re away for several days, so thieves don’t have a chance to get to account information on mail left in your box. Review your receipts and compare them to your account statements. Watch for unauthorized transactions. Shred receipts and credit card offers and other paperwork you don’t need, but that could contain personal information.

• Be vigilant online: Install firewalls and virus detection software on your home computer and create complex passwords that fraudsters can’t easily guess. Change passwords often, especially if a company or organization has your information and has suffered a database breach.

• Order your credit report once a year: Review it to make sure it doesn’t include accounts you have not authorized. Check it more frequently if you suspect someone has gained access to your account information. You can pull this information for free at sites like www.CreditKarma.com and www.annualcreditreport.com. If you are having trouble reading your credit report, please contact ProMedica FCU for assistance.

ProMedica FCU’s Pinnacle Checking Account includes identity theft protection for up to 3 generations of family.

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