Is There Such a Thing as Good Debt?

3d man sitting sad with text 'debt'.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.

Check out our FREE student loan calculator here to help manage your student loan debt, which will show you how much you can save by consolidating multiple loans or how to pay off your high interest student loan debt as quickly as possible.

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.

Try First Financial’s First Score Credit Counseling program; a low cost, interactive session ($30) with a First Financial expert, which simulates your credit score with various “what if” scenarios. You can email us at firstscore@firstffcu.com or call 866.750.0100, Option 4 to get started.

  • 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, and 30 year mortgage features and see what a good fit for your home is!*

To receive updates on our low mortgage rates straight to your mobile phone, text FIRSTRATE to 69302 and each time our mortgage rates change, we’ll send you a text message with the new rates.**

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. Credit worthiness determines your APR.

 **Standard text messaging and data rates may apply.

 Article Courtesy of Daily Finance Online by Sophia Bera

How to Assess a Neighborhood When House Hunting

House-HuntingWhen 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:

  1. Aesthetics. An attractive neighborhood indicates the residents care about it.
  2. Affordability. Sure, you want an inexpensive house, but you also want to be able to afford the cost of living in the neighborhood.
  3. Safe environment. Nobody wants a criminal as a neighbor.
  4. 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?
  5. 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, 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 866.750.0100, Option 4 for the Lending Department.*

You can also sign up for our Mortgage Rate Text Messaging Service to receive updates on our low mortgage rates straight to your mobile phone. To be a part of the program, text FIRSTRATE to 69302 and each time our mortgage rates change, we’ll send you a text message with the new rates.** 

*A First Financial membership is required to obtain a mortgage and is open to anyone who lives, works, worships, volunteers, or attends school in Monmouth or Ocean Counties. Subject to credit approval. Credit worthiness determines your APR.

**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

selling-home-vegasA 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, 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 866.750.0100, Option 4 for the Lending Department.*

You can also sign up for our Mortgage Rate Text Messaging Service to receive updates on our low mortgage rates straight to your mobile phone. To be a part of the program, text FIRSTRATE to 69302 and each time our mortgage rates change, we’ll send you a text message with the new rates.** 

*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. Credit worthiness determines your APR.

**Standard text messaging and data rates may apply.

Article source by Zillow on Fox Business.

The Hidden Costs of Buying a Home

American home with three car garageYou’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.

Rates as low as 3.375% (3.651% APR) – 15 Years.* A 15 year mortgage of $100,000 at 3.651% APR would have a monthly payment** amount of $708.76.

Rates as low as 4.375% (4.541% APR) – 30 Years.* A 30 year mortgage of $100,000 at 4.541% APR would have a monthly payment** amount of $499.29.

We also have a 10 year mortgage as well – great for refinancing! Learn more here, and apply online today.

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. To be a part of the program, text FIRSTRATE to 69302 and each time our Mortgage Rates change, we’ll send you a text message with the new rates.***

*APR = Annual Percentage Rate. Subject to credit approval.  Credit worthiness determines your APR. Available on primary residence only. 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.  See Credit Union for details.

**Payment examples do not include taxes or insurance. Financing up to 80% of value of property.

***Standard text messaging and data rates may apply.

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

How to Cut Home Buying Costs

Pair of scissors cuts business expense word COSTS in half to savFor nearly all of us, buying a home represents one of the biggest financial transactions of our lifetime. There’s really nothing that compares to buying a home, since not only do we have to put up thousands of dollars of our own money but we also (usually) have to borrow much more than that.

There’s really no getting around the fact that buying a home is expensive. It takes a lot of financial discipline to save up a down payment and make the monthly payments. Along the way, there are bound to be problems that eat into your savings too. For example, everything from a new roof to a broken water heater is going to cost you. (Of course, renting can also have costly surprises such as escalating rent or being forced to move). While there’s not a whole lot you can do about some of the costs of buying a home, there are ways to reduce your out-of-pocket costs.

Shop Around for Your Mortgage

One of the easiest ways to cut costs when buying a home is by finding a low interest loan. Get quotes from banks and credit unions so that you can compare their fees and rates. Make sure that you compare the Good Faith Estimate given to you by each financial institution. One thing to note is that you are permitted to get as many quotes as you want within a three-week period. Normally, each quote would be a separate credit check, but when you’re shopping for a mortgage, multiple quotes are considered only one inquiry on your credit reports.

Check out First Financial Federal Credit Union’s mortgages, featuring great rates and low fees.

Rates as low as 3.375% (3.651% APR) – 15 Years.* A 15 year mortgage of $100,000 at 3.651% APR would have a monthly payment** amount of $708.76.

Rates as low as 4.375% (4.541% APR) – 30 Years.* A 30 year mortgage of $100,000 at 4.541% APR would have a monthly payment** amount of $499.29.

We also have a 10 year mortgage as well – great for refinancing! Learn more here, and apply online today.

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. To be a part of the program, text FIRSTRATE to 69302 and each time our Mortgage Rates change, we’ll send you a text message with the new rates.***

Negotiate With the Seller

If you’re looking to get a portion or even all of your closing costs covered, then negotiating with the seller is your best bet. Depending on the state of the real estate market in your area, you could ask for more or less. If the real estate market is struggling or the property in question has been on the market for an extended period of time you may be able to get the seller to cover your closing costs.

Article Source: http://www.foxbusiness.com/personal-finance/2013/12/16/how-to-cut-home-buying-costs/

*APR = Annual Percentage Rate. Subject to credit approval.  Credit worthiness determines your APR. Available on primary residence only. 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.  See Credit Union for details.

**Payment examples do not include taxes or insurance. Financing up to 80% of value of property.

***Standard text messaging and data rates may apply.

DIY Home Upgrades That Will Entice Buyers

homeimprovementLooking to improve your home with an eye on future resale value? Start with a few affordable DIY-friendly home improvement projects that will pay off and make buyers take notice:

Replace flooring. Flooring is often a cosmetic feature that can make or break a sale. Flooring, like worn-out carpet or stained tiles, can be a turn-off to buyers that see the update as a major project and barrier to a “move-in-ready” home. The promise of a future project is enough to chase away many of today’s “move-in ready” buyers. But what’s underfoot is also relatively easy to remedy. Hardwood flooring is a safe, classic and durable choice. For DIYers looking to save on costs, try easy-to-install engineered wood flooring.

Improve landscaping. When it comes to curb appeal, your landscaping can pack a powerful punch, for better or worse. While many people focus their improvement dollars indoors, don’t overlook that first impression that strikes a buyer before they even get out of the car. And you don’t need a green thumb to reap rewards. Simply maintaining a crisply mowed lawn, removing dead plants and branches and adding colorful annual flowers or shrubbery can add 7 to 15 percent to your home’s value, according to the National Association of Realtors

Upgrade lighting. You may have tolerated your dated dining room chandelier, but buyers won’t be so forgiving. Switching out light fixtures for more updated styles is a low-cost, low-commitment home upgrade. Under-cabinet lighting is another quick-fix and many home improvement stores now offer easy to install plug-in lights that deliver the look of a high-end custom kitchen, and don’t require electrical work. If you do update lighting that requires wiring, make sure you work with a licensed professional to ensure they’re safely installed.

Give your kitchen cabinetry a facelift. Buyers will always pay special attention to the kitchen (i.e. the heart of the home, and tend to be critical of outdated cabinetry). While installing new cabinets can cost tens of thousands of dollars, it’s easy to rehab existing cabinets that are in otherwise good condition. Refinish the doors, drawers and cabinet fronts with a fresh coat of paint, stain or a veneer, and install new pulls that match the finish of other kitchen fixtures. To create the feel of a modern, functional kitchen, consider retrofitting your current cabinets with pull-out drawers, organizers, and retractable trash cans.

We want to hear from you! What other DIY home improvement upgrades have you seen add to your home’s resale value? Feel free to post a comment below.

For more information and how Liberty Mutual Insurance may be able to help you save on your auto and home insurance, feel free to contact our Liberty Mutual representative, Dan Ressegiue or visit our webpage:

AgentDanielRessegiue

Daniel Ressegiue

303 West Main Street | Suite 100
Freehold, NJ 07728
732-308-3868 Ext. 50950
Daniel.Ressegiue@LibertyMutual.com
www.LibertyMutual.com/DanRessegiue

Daniel graduated from The Pennsylvania State University majoring in Psychology and business and is currently finishing an MBA at Monmouth University. During his tenure at Liberty Mutual, he has been awarded many awards including National Rookie of the year special recognition, 5 Time “Pacesetter,” Pursuit of Excellence and is a Liberty Lamplighters Club inductee. During his spare time, he enjoys staying active playing soccer, racquetball and partaking in long distance running competitions.  He is also a member of Jersey Shore Runners Club, Penn State Alumni Association, as well as SCORE, a nonprofit entity dedicated to the mentoring of small business owners. First Financial Federal Credit Union Client #38361

*Click here to view the article source provided by Liberty Mutual Insurance.