Starting on the Right Foot Financially for New Grads

For parents and students, May signals the end of the school year. For those who are celebrating finishing up their final year of high school or college, we want to congratulate them on their hard work and achievements. In addition, we want to highlight some of the next steps they can take to make sure they can get a great head start on their personal finances.

Student Banking & Educational Tools

If they aren’t yet a member of Bellco, there’s no better time than now to join. We offer a free Student Checking account to all members aged 13-24 that is the perfect introduction to day-to-day money management. They’ll get a free Visa® debit card, access to mobile banking, and no monthly maintenance fees or minimum balance requirements. They also can access the free budgeting tools, financial tips, and member resources we offer to all Bellco members. This includes MoneySmarts, a free program powered by Everfi, an online leader in financial education, that provides short online tutorials to learn the basics of personal finance for college and beyond.

Getting a Credit Card

Some students might have heard the nightmare stories about credit card debt and so they hesitate to apply for their first credit card. While ultimately, they as individuals are the judges of whether they can resist racking up tons of interest debt by spending more than they can afford, for those students who think they can be mature about their spending, there are some useful benefits of using a credit card:

• Using a credit card responsibly helps build your personal credit score
• You’ll have a “grace period” between when you make your purchase and when your bill is due. This allows you to bridge the gap of having funds currently available with no interest as long as you pay your bill in full by the due date
• You can take advantage of additional rewards such as cash back, travel rewards, and more depending on what your credit card offers
• Accessing unique perks such as discounts and special experiences that certain credit cards offer

Bellco offers different credit card options depending on your goals and your lifestyle. Apply for one today to start reaping credit card rewards.

Visa is a registered trademark of Visa International Service Association.

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Protect Yourself from Phishing Scams: How to Stay Alert

As the weather warms up, many of us will be going online to shop for products to help us enjoy the outdoors or booking our next vacation. As we put more of our personal information out there in order to make purchases digitally, it’s also important we stay aware of the phishing scams that pretend to be from trusted organizations but in actuality are fraudulent emails, texts, or phone calls to steal that sensitive information. Remember, Bellco will never call or text you unprompted and ask for your personal or account information.

Watch for Red Flags

While you’re going through your email and text messages or answering a phone call, here are some questionable actions that may give away that you may be getting scammed:

• They claim that there’s an urgent issue that you need to address immediately without giving you a chance to think it over
• They use pushy or threatening language when discussing your next steps
• They directly request you to click a link or open an attachment
• They ask you to provide passwords, one-time codes, card numbers, or PINs

Steps to Protect Yourself

If you’re suspicious of a communication, it’s better to trust your gut than fall victim to sharing your personal information with a malicious third-party. Here are a few steps you can take to ensure you stay safe:

• Do not click on any suspicious links or respond to unknown callers/senders
• Delete the message immediately, some phones, like iPhones, will even allow you to Report Spam
• Contact Bellco immediately using the phone number on your card or the official Bellco website if you’re unsure
• If you think you might have shared information, contact us right away

Remember, the best defense against phishing is using your common sense and staying alert. Scammers rely on you to not think through your actions and make hasty decisions in a panicked state. Staying calm and cautious is always the best way to keep your account and personal information safe.

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One Tool Home Buyers and Sellers Should Know: The Mortgage Recast

Article by Bellco Home Loans

Every market cycle creates its own set of winning strategies. Some are well known and others fly under the radar and those are usually the ones that separate informed buyers from everyone else. Right now, one of the most underutilized and misunderstood tools in residential lending is the mortgage recast.

The Problem Today’s Move-Up Buyers Are Facing

Imagine yourself in the shoes of someone finding their dream home but still in the process of figuring out how to sell their current one.

Many homeowners have built significant equity in their current home, but that equity is trapped until the home sells. At the same time, they’re trying to compete in a market where:

• Sellers don’t want contingent offers
• Speed and certainty win deals
• Negotiating power often goes to the cleanest offer not the highest

So, those buyers are stuck between two competing realities. They need their equity to comfortably afford the next home, but they can’t access it in time to win that next home.

Enter the Recast Strategy

A mortgage recast allows a buyer to purchase their next home now without waiting on their current home to sell. This assumes they can qualify for both payments (i.e., existing mortgage and new mortgage) and then apply the proceeds from the sale of their existing home later to reduce their loan balance and payment.

Once that lump sum is applied, the lender re-amortizes the loan, lowering the monthly payment while keeping the original interest rate intact.

Why This Matters More Today Than in Previous Cycles

In previous cycles, homes typically sold faster and with more predictability. Plus, bridge loan solutions were easier and cheaper and rate volatility wasn’t as much of a concern.

Today is different.  Rates have moved enough that refinancing later is not a guarantee, and sellers demand non-contingent offers in most cases.  Finally, buyers want long-term payment control, not short-term wins.

The recast bridges that gap more efficiently than almost anything else we’ve seen.

What This Looks Like in the Real World

Instead of making a contingent offer, which could put them at a competitive disadvantage, they can qualify carrying both home payments temporarily. Then they can put the minimum required down payment to stay competitive, preserve liquidity, and close quickly just like a non-contingent buyer.  Once their current home sells, they can take that equity (often a significant amount) and apply it directly to the new loan.

The lender recasts the mortgage, and now:

• The loan balance drops
• The monthly payment drops
• The client ends up where they wanted to be all along

Want to know more about the recast process or other winning strategies for the current real estate market? Contact your Bellco Home Loans Team to learn more valuable insights.

Bellco Home Loans is a joint venture between Bellco Credit Union and Guild Mortgage Company, LLC, an independent mortgage lender that has helped families attain home ownership since 1960. Bellco Home Loans, LLC, NMLS #2085298, is an affiliate of Guild Mortgage Company LLC, NMLS #3274; Equal Housing Opportunity Lender. All loans subject to approval.

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Why to Avoid Joint Tenancy for Your Kids’ Inheritance

Are you considering titling your property with your children (also known as Joint Tenancy)? People often think of this technique as an easy way to pass their inheritance along to their children upon their death. However, for the large majority of situations, this is an incorrect way of passing assets along to our loved ones. There are three reasons you do not want to do joint tenancy with right of survivorship with your family and loved ones.

Joint Owner Complications

First is that once you have joint owners on your property, they have the same rights and obligations as you have to the property.  To sell your property, all individuals would have to agree to sell and sign the deed.

Exposure to Additional Risks

Second is that once they have an ownership interest, the property and equity in the property have now been exposed to their own private issues. Sometimes even the most financially stable individuals can face unexpected turmoil, including your children. If they end up going through a divorce, your property will be included in the financial settlement of their affairs. If they file bankruptcy, your property will be included in the financial trauma with the event. If they were to be sued, your property would be included in their litigation.

Tax Considerations

Your family members will lose their step-up in basis for tax purposes. This is due to the IRS deeming this as a gift and not an inheritance.

Alternative Inheritance Options

There are excellent alternatives to consider, like a Beneficiary Deed, Life Estate Deed, or simple trust planning.

If you’re interested in discussing your situation further with an expert, consider taking advantage of your complimentary consultation with The Hughes Law Firm, P.C., who offer Bellco members a 25% discount. Hughes Law will explore planning options with you that are a perfect fit for your circumstances. As a trusted partner with Bellco for more than 25 years, Hughes Law has seven convenient offices from Ft. Collins to Colorado Springs.

For more information, you can contact The Hughes Law Firm at 303-423-8423.