Financial Education Blog - Idaho Central Credit Union

All You Need to Know About Mortgage Interest Rates

Aug 28

2020

One of the most important things to look at when buying a home is the mortgage interest rate. A mortgage interest rate determines the monthly payment, which helps determine if you can afford your dream home or not. It also may impact which type of mortgage loan you might qualify for and pursue. Because ofRead more

One of the most important things to look at when buying a home is the mortgage interest rate. A mortgage interest rate determines the monthly payment, which helps determine if you can afford your dream home or not. It also may impact which type of mortgage loan you might qualify for and pursue. Because of this, a mortgage interest rate can affect your long-term financial goals. Some mortgage interest rates are fixed, which means you will have a specific interest rate for the life of the loan, regardless of whether it is high or low. Due to this, it’s important to know if what you are being offered is a good rate, so that you can plan for the future. So what is a good mortgage interest rate? And what interest rate do you qualify for?

What’s the current rate?

In order to determine what a good mortgage interest rate is, we first have to see what the current average rate is. Mortgage interest rates can change daily. The U.S. Federal Reserve issues rate changes based on bond market, which is why the economy influences mortgage interest rates. For example, as COVID-19 was escalating, we saw all-time low mortgage interest rates, and many people took advantage of the low rates to buy or refinance their homes.

Most lenders include their starting interest rates on their website. It’s important for you to compare interest rates and services provided all together. At Idaho Central Credit Union, we often provide some of the greatest values to our members. Rates can also be lower with specific mortgage loans like the Adjustable Rate Mortgage (ARM) loans and Veteran Affairs (VA) loans. ARM loans tend to start with a lower interest rate, and will adjust within a certain period of years.

What’s the highest rate you can afford?

The other thing to consider is what the highest rate you can afford is. We can’t control the market and how the economy is doing, but we can calculate what we can afford. You can use our Home Loan Qualifier Calculator to help you determine what the highest interest rate you can afford is. In order to calculate the highest rate you can afford, you first need to know the highest monthly payment you can afford. Experts recommend no more than 30% of your income. Next, you can put in the purchase price of your dream home, and adjust the interest rate to see what it is when it reaches your maximum monthly payment budget.

What interest rate do I qualify for?

Now that you know the current rate and what you can afford, you can look into what interest rate you qualify for. There are many factors that go into your mortgage interest rate, including your credit score. If you have a high credit score, you might be able to get the lowest mortgage interest rate possible. The reason why is because lenders look for responsible borrowers, and a credit score indicates many levels of the borrower’s financial behaviors. This includes if you pay your bills on time, or if you have a lot of consumer debt beyond what you could afford. Other factors that may impact your interest rate include loan-to-value ratio, debt-to-income ratio, and more.

As an example, if the current rate starts at 3%, and the highest rate you can afford is 5%, you might have more flexibility when shopping for a mortgage loan. If you have a good understanding of your current qualifications, you should be able to shop with the ability to know when you are being offered a great mortgage loan and interest rate, or not. If you have a high credit score, you will most likely be able to qualify for a low rate that is close to what you see listed online. Having this information may give you a good general idea of what type of rate you may qualify for, but ultimately the best way to know what interest rate you qualify for is to start your application, or pre-qualification.

Now that you have a good knowledge of where you might be at, the best next step is to reach out to a Mortgage Loan Officer to start your application process. The sooner you start your process, the sooner you can take advantage of a great, low rate, and lock your rate before it goes up again. Contact one of our Mortgage Loan Officers today to get started on your application!

Financial Education

How Remote Deposit Capture Can Help Your Business

Aug 27

2020

Small business owner smiling in food truck

Remote deposit has become more and more popular, not only in the consumer banking world, but in business banking as well. If your business is looking for a simple way to save some time, using Remote Deposit Capture may be the solution you’ve been looking for! Remote Deposit Capture is a way to efficiently processRead more

Remote deposit has become more and more popular, not only in the consumer banking world, but in business banking as well. If your business is looking for a simple way to save some time, using Remote Deposit Capture may be the solution you’ve been looking for!

Remote Deposit Capture is a way to efficiently process your deposits from the comfort of your home or office. With a desktop application, you are able to scan checks, either single or multiple, through a desktop scanner, providing a quick and accurate deposit process. In addition, Remote Deposit Capture makes it even easier to keep track of all of your financial transactions with the reporting functions available within the system.

Check Scanners

Many people are already familiar with Mobile Deposit. They receive a check, take out their phone, snap a picture, and it’s deposited! Though similar in concept, Remote Deposit Capture is done through a check scanner device that is designed for this specific purpose. Business owners can purchase a check scanner, connect it to their computer, and process deposits through a desktop application. From there, you can scan all your checks from the comfort of your own home and office.

There are a variety of scanner options, from single item scanners to multiple item scanners that can scan a large volume of checks, up to 50-75 checks per minute. For most small to medium sized businesses, you can scan all the checks for the day within minutes. Once all of your checks are scanned and deposited, you prominently mark the item as “Electronically Presented” or “VOID” and save in your records for 60 days. After the 60 days is up, properly dispose of the item to ensure that it is not represented.

Business Remote Deposit Capture at ICCU

Our Remote Deposit Capture service allows business members to scan checks to be deposited directly to their ICCU account(s). Deposits can even be submitted 24 hours a day, 7 days a week. Business members can also receive same-day credit if checks are deposited before 5:30pm MST on normal business days. Businesses can also view deposit reports and check copies from their computer, which makes bookkeeping easy. The Business Remote Deposit Capture service is particularly useful for businesses that have a large volume of checks, but many businesses find the convenience of the service the real selling point, regardless of the amount checks! Imagine being able to scan all your checks within minutes, and have them deposited through the online system, from the convenience of your home or office. Businesses are able to save both time and money due to the convenience of Remote Deposit Capture!

Idaho Central’s Remote Deposit Capture service has a flat-rate monthly fee, with no additional fees per item. That being said, you are not being charged more because you have more checks. This allows businesses to know exactly what they are charged, and ease their worries on unnecessary charges. Idaho Central can also assist with purchasing your check scanner, or you can purchase independently. However, you will want to contact our Business Relationship team to assure compatibility with the system.

Remote Deposit Capture is a great option to save your business time, resources, and worry. When your deposits can be made from the comfort of your own home or office, you are prepared for any emergency situation, like a pandemic, and won’t miss a beat in continuing your regular business processes.

At Idaho Central, we strive to serve our business members with convenience and save you time with great business services, so you can focus on your business while we take care of your financial needs. Contact a Business Relationship Specialist today to set up your Remote Deposit Capture service.

Financial Education

Spotting a Phishing Attempt

Aug 19

2020

Idaho Central protects you against phishing.

When it comes to cyber security, we all want to believe that we are safe, and able to spot a scam from a mile away. We avoid those emails from the Nigerian prince, we know no random stranger is trying to give us a million dollars, and if it’s in our junk mail then weRead more

When it comes to cyber security, we all want to believe that we are safe, and able to spot a scam from a mile away. We avoid those emails from the Nigerian prince, we know no random stranger is trying to give us a million dollars, and if it’s in our junk mail then we leave it there. The reality is, however, that anyone can fall prey to a phishing attempt. Unfortunately, phishing attempts often look like they’re from a company you know and trust. In fact, the FBI’s Internet Crime Complaint Center reported that people lost $57 million to phishing schemes in 2019. So how do you spot a phishing email and keep yourself safe?

Does it ask you to follow a link, open a file, or provide personal information?

Phishing emails often tell a story to trick you into clicking a link or opening an attachment. This may look like a service you use emailing you to tell you that your payment information is outdated with a link to update it. It may even look like an email from your bank letting you know that your online account is locked with a link to provide your login credentials, security questions, or other personal information.

Does it feel urgent?

Many scams capitalize on simply creating a sense of urgency. Slow down and really evaluate what is being presented to you. The urgency of the email may seem alarming, and your instinct may be to take whatever action it is prompting you to. When you slow down and take a step back, however, you are able to think clearly about the situation. Is your payment information really outdated? Can you go directly to their website or contact them to check on this, rather than clicking on the link in the email? Take your time to verify anything that may seem off, trust your instincts, and don’t commit to or take action on something that makes you feel uncomfortable.

Is it poorly written?

When reading through any email, take note of the grammar and wording used in the body of the message. If you notice spelling and grammatical mistakes, or even strange phrases, this should be a red flag that something isn’t right with the email. Emails from legitimate sources are very carefully crafted to assure that emails are professional and well-written. On another note, most email spam filters will look for key phrases or words to filter out phishing attempts, and spelling or grammatical mistakes can help scam emails bypass those filters and find their way directly in your inbox, instead of your junk folder. Since these emails look like they are coming from legitimate sources, take extra time to read them carefully and assure that they are authentic.

What do the links look like?

Since the email may look like it’s coming from a company you know and trust, it can be hard to tell whether it is real or not. Scammers may use the company’s logo, header, and the link may even look like it’s taking you to their website. Just because a link says it’s going to send you to one place, doesn’t mean it actually will. One simple thing you can do to double-check any links before you click on them is to hover your mouse over any links, and take note of whether the link in the text matches the URL displayed as the cursor hovers over the link. If these don’t match, this means the link is not taking you where it looks like it will at first sight.

Does the email look like it’s from Idaho Central?

As always, please remember that Idaho Central would never send you an email with a link asking you to provide login credentials, security questions, or any other personal information. Always go directly to www.iccu.com or use our app to log in and access your online banking. If you have received what appears to be a phishing email pretending to be from Idaho Central Credit Union, do not respond to the request. Instead, forward the email to abuse@iccu.com. Don’t hesitate to contact us if you ever have questions or concerns; Idaho Central can help you identify scams or fraud, and help you with the next steps needed to protect yourself. Learn more about how to protect yourself at our security center.

Financial Education

Meeting a Savings Goal

Aug 07

2020

Laptop on desk with notebook, calculator, change glasses, piggy bank, and bag

Everyone wants to save money, but it often gets put on the back burner. When it comes to saving money, it may seem easier said than done, but it doesn’t have to be that way. Taking a close look at what you want to save for and creating a plan for how to get thereRead more

Everyone wants to save money, but it often gets put on the back burner. When it comes to saving money, it may seem easier said than done, but it doesn’t have to be that way. Taking a close look at what you want to save for and creating a plan for how to get there can help set you up to have financial success for years to come.

Set your goal

The first step to saving money is to set a goal. When starting out, it may be hard to save money habitually, and having a goal in mind can help you take actionable steps to reach it. Sit down and decide what exactly you are saving for, and the amount needed. Your goal may be short term (a weekend away), long term (retirement), or somewhere in the middle (a down payment for your dream home). This may even be as simple as starting an emergency fund. In a recent study done by the Federal Reserve, it was found that nearly 47% of adults could not cover an emergency expense of $400 with cash. If you are just getting started on your savings journey, setting a smaller goal can help you realize that saving isn’t as hard as you thought it to be, and can motivate you to continue saving. Setting a realistic and attainable goal to start off on, even if it is just a few hundred dollars for an emergency, will help you make changes in your life to begin saving, and ultimately help you years down the line.

Make a plan

Once your goal is set, sit down and decide what it will take for you to get there. With this step, it is important to be realistic about what you can afford. Pull up your budget, and take a deep look at your current spending habits. It may be tempting to decide to cut out something entirely in order to reach your goal as fast as possible. Instead, try to see where you can cut your spending and increase your savings. Then, you can determine what realistic time frame you will reach your goal by.

Setting some check points along your way will help keep you on track to reach your goal on time. With eBranch, you can “hide” your savings account from showing each time you log in, which can alleviate the temptation to spend it. However, it’s important to not forget about it completely. Make a schedule determining when you will check to see how you are doing, setting smaller goals to mark your progress along the way. You may have to adjust your plan or expectations at times, but remember, slow and steady wins the race!

Habit Stack

One of the easiest ways to build new habits is to implement it with a current, existing habit that you already have. You may have sat down and realized that you have an extra $15 a week to save if you just gave up your morning coffee every day, and felt excited about that possibility. However, when you cut out a habit completely and replace it with a new habit, you are much more likely to revert back to the habit you were trying to cut out. Changing your spending habits entirely is not an easy feat, and you may need to start a little smaller in order to avoid discouragement. Even though you may not reach your goal as quick as you’d hope, but setting aside a just a few dollars a week will add up over time. So, instead of cutting out your morning coffee entirely, consider making it a habit to transfer a little bit into savings every time you get your coffee! This takes your current habit, and adds on a new action. While you are waiting on your order, you can log into eBranch and transfer into your savings account.

Make it Automatic

Making your savings automatic takes all of the thought and effort off of your shoulders. Many people like to set up their accounts so that each time they get paid, a set amount of money automatically goes into their savings account without them ever having to lift a finger. While this is a great option, it may not always suit every person’s circumstances. Instead of deciding to throw out this suggestion, taking a different approach to it can help you still save automatically without having a set amount go into savings each week.

Let us do it for you

At Idaho Central, our solution is our Central Cents savings account. This account is the perfect balance between habit stacking and automatic savings. Each time you run your debit card, this account automatically rounds up your purchase to the next dollar and automatically deposits the extra into your savings account. For example, if you spent $2.10 on your morning coffee, this account rounds that amount up to $3, and deposits the extra $0.90 into savings for you. If this is a regular purchase, it adds up quickly! If you ran this transaction 5 days a week, you would have $18 by the end of the month, and $126 by the end of the year! Include all of your other daily purchases, and you’ll be well on your way to reaching your savings goal. Not only can you maintain your current spending habits, but you’ll increase your savings each time you spend. The impact is minimal in the moment, but adds up quickly with each purchase you make. You can have your coffee, and save automatically too!

Starting on your path to financial success by making and keeping savings goals is an exciting process! Luckily, it has never been easier to open a Central Cents account with our new online application. If you have any questions or would like to explore our savings account options, please reach out to us and we will be happy to help!

Financial Education

Credit Score Basics

Jul 14

2020

woman pays by credit card for online purchase on a tablet computer.

Credit sounds like a mysterious, looming entity that can affect our lives in big ways. We rely on credit to buy a house, handle emergencies, and for long-term financial security. It can be a great financial tool, but unfortunately, there is a lot of misinformation out there about your credit score and what you can do to improve it. Check out our tips on maintaining and improving your credit score!

Credit sounds like a mysterious, looming entity that can affect our lives in big ways. We rely on credit to buy a house, handle emergencies, and for long-term financial security. It can be a great financial tool! Unfortunately, there is a lot of misinformation out there about your credit score and what you can do to improve it. The biggest thing you need to know is that the subject of credit is not black and white. A certain credit score will not automatically qualify you for whatever kind of loan you need, and it takes careful thought and maintenance to stay in a situation where you have positive credit. You never really stop working on your credit, which can be great because you are never too young or too old to build your credit!

Payment History (35%)

The biggest factor in your credit score is payment history. This weighs in at a hefty thirty-five percent of your total score. To keep this positive, it is extremely important to make payments on time; any payments that are past due more than thirty days will report on your credit. Your payment history, the number of accounts that are paid as agreed, as well as the number of past due items and the length of time they have been past due will all appear on your credit report. The best way to increase your score in this area is simply to pay on time! More weight is placed on recent payment activity so even if your payment history hasn’t been great in the past, you can make a significant impression by setting a new precedent going forward.

Amounts Owed (30%)

The total amount owed makes up a large part of your credit score as well. This includes not only the number of accounts that hold balances, but the proportion of credit lines used, as well as the balance of any installment loans. To increase your score, work on paying down revolving balances and avoid opening new accounts until you have paid down a significant portion. For credit cards, a balance of fifty percent or less of the credit limit is ideal. Open new accounts or lines of credit as needed rather than taking advantage of specialty offers when they arise.

Length of Credit History (15%)

The length of credit history accounts for a smaller portion of your credit score, but is still significant. This is simply the amount of time since accounts have been opened and the time since there has been any account activity. You may have heard the advice to close old credit cards and lines of credit that you don’t use anymore, but if there’s no annual fee, it’s better to leave it open! Having nothing owed but all that credit available to you is good for your credit score. Closing it could immediately dock your credit by several points. If you don’t want the temptation, you can simply cut up or shred the cards for these accounts so you aren’t tempted to use them!

Types of Credit Used (10%)

Though not common knowledge, types and diversity of credit used also factor into your credit score. For instance if your credit report is made up of a variety of credit cards, you should think about adding an installment loan to vary credit type a little. This tells a lender that you are reliable in paying back an assortment of different kinds of debt. Likewise, if you have only had installment loans in the past, getting a credit card can increase your score over time as your demonstrate your ability to be responsible with a revolving line of credit.

New Credit (10%)

If you have a number of recently opened accounts, or are shopping around for the best rate and having your credit pulled again and again, it can negatively affect your credit. Inquiring about your credit too often can also affect your score as well, and you generally want to avoid pulling credit more often than every six months to one year.

It’s great to know that credit isn’t a mysterious, immovable number, but rather like a living organism that responds to care and attention. The first step to improving your credit score is to know your credit score. Lucky, Idaho Central has you covered with our free My Credit feature! You can check your credit score each time you log into eBranch without impacting your score! You can also view your full credit report, monitor for unusual activity, get alerts for changes to your credit, and more.

As always, our loan officers at Idaho Central are happy to help you create a plan to build your credit and answer any questions you have. We are proud to say that with credit builder products, competitive rates, and a rewards program, we have something suitable to fit every need.