BECU Financial Advisor

 


Avoiding Fees

Late fees, banking fees, credit-card fees -- the amounts might seem insignificant when taken individually. But if you're regularly paying penalties and fees, these charges can quickly eat a hole in your budget.

Avoid being nickeled and dimed! Read the fine print so you understand fee rules, and stay organized so you avoid breaching those rules.

Don't be afraid to shop around for a better deal.
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HomePath

Are you currently considering buying your first home or perhaps your first, second or third investment property?

If so then you will definitely at least want to consider Fannie Mae’s HomePath program.

Fannie Mae is a government-sponsored enterprise chartered by Congress to keep money flowing to mortgage lenders.  They do not make loans directly rather buy the loans from lenders.

Unfortunately, due to the housing crisis, they now own homes that they must sell.

Fannie Mae HomePath properties offer great benefits such as low down payments, no mortgage insurance, expanded seller contributions and more.

To learn more visit homepath.com.
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Borrowing from a 401K

Taking out a loan against your 401K is usually a less expensive option than a straight withdrawal where you may have to pay income taxes and a 10% penalty, however there pitfalls that you must take into account.  

Most plans will give you only five years to repay the loan.  If you borrow a large amount the payment could be substantial.

If you fail to make the payments or leave your company you may be required to pay back the outstanding balance within 60 days or be forced to take it as a hardship withdrawal that will incur taxes and penalties.

Make sure you understand all of the consequences of borrowing against your 401K.
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Avoid problems when purchasing a home

When purchasing a home or refinancing your existing home the last thing that you want to happen is to find out that upon closing you are no longer qualified.

How can that happen?

When you make your mortgage application the lender is looking at a number of factors including your income, credit score, job history, debt levels and money for a down payment and reserves.

When you get to closing your lender is going to check to make sure that the assumptions on which the loan was originally approved are still valid.

If you do make changes just make sure that they will be favorable in the eyes of your lender.
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Notify Your Financial Institution about Trips

If you will be traveling you probably do not want to be stuck without having a way to pay for your purchases.

Making purchases outside of your normal pattern can trigger suspicious activity on your account often resulting in your account being frozen until they can reach you or in a worst case, if your card is compromised leave you without the use of your card.

To minimize any disruption it is always a good idea to notify your financial institution of your travel plans before you leave.

It’s always a good idea to have a couple of different payment options just in case.   
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3 Ways to Improve Your Credit Score

If your credit score is not as high as you would like it to be here are a few ideas to improve it.  
   
The first step is to visit “ANNUALCREDITREPORT.COM” for a free report from all three bureaus.

If you see errors in the report, getting them corrected.  You can find instructions on the website of each bureau.  

Timely payments and utilization or what refers to your reported balance in relation to your credit limit are the two most important factors and account for 65% of your credit score.

If possible keep your outstanding balances to no more than 25% of your available credit for revolving loans.

Find more information visit mycifo.com.
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The 8th Wonder of the World

According to Albert Einstein, “Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”

Here is an example:

Assume at age 31 you start saving $2,000 a month for your retirement and you do so until you are age 65.  Earning 9% interest you will have accrued over $470,000.  

However, if you had started saving the same $2,000 when you are 22 and did so only until you were 31 you will have over $579,000 and will have only invested for 9 years.

If you are behind on your retirement savings it’s not too late to get started.
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Credit Score Myth

Paying off or making the minimum payment on your credit card each month is only the start of establishing good credit.

Another facter that accounts for 30% of your credit score is “utilization” or the balance on your statement in relation to your credit limit.

If at all possible you want to keep this below 25%.  For example, if you have a $1,000 credit
limit you want to make sure that the balance on your monthly statement does not exceed
$250.00.

Pay attention to your balance in relation to your credit limit and if it exceeds 25% consider making additional payments prior to your lenders billing cycle.   
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Paying off your mortgage

Before you decide to apply extra income to your mortgage or refinance to a shorter term, here are a few things to think about:
Are you taking full advantage of your employers company match on your workplace retirement plan?

Do you have other debt?

How about your emergency fund?  Would you have the saving to get you through an un-expected expense or loss of income?

With the tax advantaged treatment of mortgage interest that you may decide that the effective interest rate is low enough that you can obtain a higher return somewhere else. 

Weigh all of your options. 
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Picking a Financial Planner

At some point you may turn to a financial advisor for help with your retirement plan. How can you ensure that you find a planner that will have your best interest in mind?

Start by identifying a couple reputable companies and meet with an advisor from each to describe your situation.  Find out what their qualifications are and if they have the experience and skills to help you. You want someone that is a good fit for your particular situation. You can do a background check at FINRA.org.
Last but not least, the advisor should be able to tell you how he or she will be compensated.  Is the advisor paid on commission based upon the types of investments you have or are they a salaried employee?  Either way this is a long term relationship so take your time.  
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