16
August

Financing Your Wedding: Options and Approaches

After the initial excitement of an engagement settles, daydreams begin about the ideal venue, food options and of course, what the dress will look like. Before getting too far down the planning path, the inevitable question arises: How will we pay for this? Weddings can be expensive. In 2021, couples spent on average $28,000 on their special day. This is a significant increase from the average cost of $19,000 in 2020 — attributed to the pandemic’s lessened restrictions and availability of vaccines and couples hosting smaller events for safety reasons.

Casey Smith Read more
1
August

No co-signer? No credit card? No problem.

Michigan credit union gives young adults a credit boost with auto loan program

Media Contact: Barbara Fornasiero; EAFocus Communications; barbara@eafocus.com; 248.260.8466

Wyandotte, Mich. — July 27, 2022 —While the availability and affordability of cars is in flux, and higher gas prices are jolting budgets, Michigan Legacy Credit Union (MLCU) is making one thing easier: helping young adults hit the road this summer with their own set of wheels.  Following its initial limited-time offering in 2019, MLCU is again presenting members aged 25 and younger the opportunity to get a car loan without a co-signer and to obtain a VISA credit card at the same time.

“In our experience, car buyers do not want the hassle of a co-signer for their auto loan. With this Gen-Z focused program, we are empowering our younger members with financial responsibility and freedom while helping them develop financial literacy,” Carma Peters, MLCU President and CEO, said. “Qualifying for auto loans without a co-signer is really their first step to financial independence and wealth building; plus, it helps them understand how loan obligations work in building a good credit foundation.”

The auto loan is combined with an optional credit card offer because it can be difficult to have an expensive asset like a car without a credit card to support accompanying expenses. The promotion is subject to credit approval and standard terms and conditions apply. Qualified applicants must be a member of the credit union, but it’s simple to join. A one-time, $5 deposit to open an account is all it takes, and it can be done at one of MLCU’s five area branches or online with MLCU’s video teller.

Peters says the auto loan program also builds member loyalty.

“The first member to participate in this auto loan program in 2019 just purchased a home with a mortgage through Michigan Legacy. And unlike traditional banks, the credit union does not charge any fees to obtain the loan, so that’s a significant savings when calculating the interest.  It’s a win-win for the young adult member and the credit union,” Peters said.

Peters adds that the creative combination of a car loan and credit card is an example of how credit unions can uniquely help young adults with financial assistance and guidance.

“Credit unions are a great place for the Gen Z population because they have local decision-making authority and can offer personalized services and rates that take into account an individual’s unique situation. I think of it as working outside the automated process box,” Peters said.

About Michigan Legacy Credit Union

Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.

Casey Smith Read more
15
July

Despite increasing interest rates, mortgages still open doors; plus, reconsidering refinance “rule of thumb” and using home equity loans wisely

Media Contact: Barbara Fornasiero; EAFocus Communications; barbara@eafocus.com; 248.260.8466

Wyandotte, Mich. — July 7, 2022 — The housing market has experienced record-breaking inventory shortages, rising interest rates – and an abundance of cash offers. But mortgages are still the ticket to homeownership for most people, according to Michigan Legacy Credit Union (MLCU) President and CEO Carma Peters.

“Cash offers have been wildly popular in the recent housing market frenzy, but it’s not unusual for cash offers to turn into a mortgage after the house has been sold. Sometimes the cash is a temporary gift of sorts from a parent or relative, with the understanding that the homeowner will ultimately take out a mortgage and repay the cash in full or in part,” Peters said.

And while mortgage rates continue to increase and have doubled from a year ago, there is still the opportunity to refinance.

“It’s amazing how many people we encounter who never refinanced their high interest rate mortgages of (7.00% – 8.125%), even with the record low rates we’ve seen in the past couple years,” Peters said. “While rates are higher now, they are still significantly lower than what some individuals are paying on their current mortgage. For those people, refinancing should be a priority.”

Peters notes that a general rule of thumb for refinancing is: if you can lower your rate by 1% and will be in your home for seven years, it’s worth pursuing. But re-fi considerations shouldn’t end there, she said.

“In some circumstances, lowering a mortgage rate by even half of a percent is advisable if the overall savings outweighs the closing costs in a period of seven years or less,” Peters said. “If you’re unsure if a refinance is right for your current mortgage, it never hurts to inquire to understand if you’re at a good refinancing point, or what the target rate is for you to refinance.”

Mortgages, which account for approximately 25% of MLCU’s business, not only allow for the purchase of a home, they can be helpful down the road for tapping into home equity. As both inflation and gas prices reach record highs, the equity in one’s home can also be used to pay off higher interest rate debts, such as credit cards or student loans, or otherwise gain access to affordable cash during a tenuous economy.

“With a home equity loan, people can borrow money based on how much equity they have in their home,” Peters explained. “So, if you’ve paid off $75,000 of your mortgage, you may be able to leverage that equity to get a loan for $25,000 or more, for example. It’s important, however, that the home equity loan be used to either make improvements that will add value to the home or to pay down debts that will put the borrower in a more favorable financial position. Never borrow money to pay off debt it there is not a net positive in doing so.”

Peters adds that the unpredictability of the past few years serves as a good reminder to individuals on the importance of making smart financial decisions, as they can have long-term impact on one’s ability to accomplish personal finance goals, such as investing in a home purchase. Despite current challenges, those who have saved the down payment for such a major life purchase can still lay claim to a home sweet home.

“Motivated home buyers may have to adjust their expectations when house shopping, but that doesn’t mean a home purchase is out of reach,” Peters said. “A smaller home may be the answer – or a home in a more affordable location. The frenzy of home buying from earlier this year is easing, which means more opportunities in a less crowded market. Be patient and be smart – don’t overpay for a house and don’t waive inspections. Make your home purchase a wise investment and you can reap the financial rewards in the years to come.”

About Michigan Legacy Credit Union

Michigan Legacy Credit Union (MLCU) is a member-owned, not-for-profit financial cooperative serving members who live, work, worship, attend school, or own a business in the state of Michigan. Michigan Legacy Credit Union is committed to providing quality financial services at a competitive price, delivered professionally and efficiently while keeping member/owners and their needs first. For additional information on MLCU, visit: www.michiganlegacycu.org.

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Tony Muka Read more