How Loan Approval Works

You decide you need a loan for a house, a car, a computer or anything in between. So, you fill out the application and then wait. But what exactly are you waiting for?

Loan officers at any financial institution have a process they go through to determine if you and other applicants are a good credit risk. They are looking at several specific factors so they can determine your ability to repay the money you borrow from them.

Disposable Income
At Neighborhood Credit Union, we are most interested in your disposable income. We look at how much money your bring home after taxes, and how much of that take-home pay is available to repay your loan. Disposable income is our primary factor for approving or not approving a member loan.

Credit Score
Many other lenders rely on a credit score to make their decisions. Neighborhood does pull your credit score, but only to determine your interest rate. A credit score is a number formulated by a credit bureau based on factors like how much debt you already have, your history of making other loan payments on time, how long you’ve had any credit at all and outstanding loan balances. There are three major credit bureaus in the U.S., and they each have their own formula for determining a credit score. The higher your credit score, the more likely you are to get approved.

Debt to Income Ratio
Many lenders also look at your debt to income ratio. This number looks at how much debt you’re repaying every month and compares it to your income. Financial advisors generally recommend that people keep their monthly debt to 30 percent of their monthly income. Financial institutions often look at mortgage debt separately and have two ratios – one for housing and one for all other debt. That means you can sometimes have up to 60 percent debt (30 percent for each ratio). For someone making $3,000 a month, that’s a $900 mortgage payment and $900 in other debt.

Additional Factors
If your credit score and debt ratio are a borderline yes or no, loan officers will often look at additional factors. If your payment history with them is exceptional, that could work in your favor. Another consideration is your potential debt. You may have five credit cards that you haven’t used in five years. Some financial institutions will look at the credit limit on those five cards to see how much debt you would take on if you suddenly maxed out all five cards. Potential debt doesn’t usually work in your favor. However, cancelling those cards could lower your credit score, because you’re erasing some of your credit history.

We always encourage you to come to your credit union first, where personal service flows into the loan approval process, as well.

Home Values in North Texas

The housing market in north Texas is one of the most stable markets in the country. That’s good news if you’re looking to buy a home. Homeowners looking to sell, however, may want to wait it out if possible.

Home values in North Texas actually decreased by about 4 percent in 2009. This is low compared to other parts of the country, but it’s still a decrease. Unfortunately for home owners, when property values decrease, the selling price usually goes down, too.

According to Trulia.com, one of the top three most visited real estate websites, the average listing price for homes in north Texas ranges from $199,000 to $277,000. However, the sale prices are much lower. The median sale price for houses in north Texas ranges from $65,000 to $151,000. And, within that range, most homes are selling between $81,000 and $119,000.

The current housing market is what we call a buyer’s market. Property values are down, which means people can’t sell their homes for as much as they’d like to. Mortgage rates are also low, which makes mortgage loans extremely affordable. Plus, the government is currently offering sizeable tax credits to new and existing home buyers.

Home Buyer Tax Credits
There are two tax credits available. First-time home buyers are eligible for an $8,000 credit. The IRS defines new home buyer as anyone who has not owned a home for three years prior to this purchase. Existing home owners qualify for a $6,500 credit. A binding sales contract must be signed by April 30, 2010, and the sale must be complete by June 30, 2010, to qualify for the tax credit. Home prices and income levels also apply, so visit the federal housing tax credit website for complete details.

Financial experts are expecting property values to go up again in 2010. If you’re thinking of buying a home at a great value, now is the time to do it. And, remember to consider a Neighborhood Credit Union mortgage loan.

   

Economical Spring Break Travel Options in Texas

Spring Break is just around the corner. It’s always nice to get away – even if it’s just for a day or two – while the kids are out of school. Of course, budgets can be tight, so we’ve put together some economical, family-friendly ideas within driving distance from the DFW area.

San Antonio
Spring break for most, if not all, Dallas-area school districts begins on St. Patrick’s Day weekend. That’s always a fun weekend to be in San Antonio, because city officials dye the water green along the Riverwalk and temporarily re-name it the River Shannon. This will happen on Saturday, March 13th with a river parade beginning at 3 p.m. It  is free to the public.

Consider making a weekend of it, or even longer. We have partnered with Sea World to provide our members discounted tickets, which includes options for the water park. Spend a day with Shamu and another day at Sea World’s Lost Lagoon Water Park. If you’re still not ready to go home, San Antonio is home to Six Flags Fiesta Texas. Or, visit the San Antonio Children’s Museum, which has so many activities that families could easily spend the better part of a day doing.

Six Flags Tour
Six Flags in both Dallas and San Antonio is currently offering season passes for as low as $50 per person, and they’re good at any Six Flags theme park in the country. That’s the cost of a one-day ticket, and the season pass is good for a year. You could actually visit several Six Flags theme parks during Spring Break without the added expense of theme park admission.

Houston/Galveston
If you choose the right lodging in Houston, you can stay in the same hotel for several days and drive to some very family-friendly attractions in both Houston and Galveston. Spend a day at Moody Gardens or Schlitterbahn on Galveston Island. They are right next to each other.

Space Center Houston, the visitor center at Johnson Space Center, is another full day activity that kids love. And, they’re offering half price tickets until May 31^st if you print them online at home. Be sure to spend a lot of time in the Kids Space, where they can play, climb and feel what it’s like to be an astronaut.

Round out your stay with a day trip to the Kemah Boardwalk. An All Day Ride Pass is $16.99 for people under 48 inches and $19.99 for anyone 48 inches and above. There is also games and entertainment.

Lodging
There are several family-friendly hotel chains in Texas that are reasonably priced, offer roomy accommodations and offer a free hot breakfast buffet every day. Depending on the size of your family, that could save you a lot of money just in food. All of them have locations in Houston and San Antonio.

Residence Inn

Drury Inn (also offers free hors d'oeuvres every evening at 5:30 p.m.)

Holiday Inn Express

Have a fun and safe Spring Break!

Single Women CAN Buy Their Own Homes

When it comes to home ownership, buyers come in all shapes and sizes. While one size may not fit all, home ownership isn’t just reserved for the traditional couple with 2.5 kids and a dog named Rover. In fact, single people in general (with or without children) make up more than a third of the home buying population. In 2009, about 20 percent of all home buyers were single women. And, according to the State of the Nations Housing: 2009 report compiled by the Joint Center for Housing Studies of Harvard University, “social and economic trends have given women a more powerful presence in housing markets.”

This is good news for women, particularly single moms, who may have thought home ownership was out reach. But even with these favorable statistics, there are important factors to keep in mind.

Affordability
You still have to make enough money to afford the home you want to buy. You should expect most lenders to require some type of down payment, and, as an unwritten rule, your mortgage payments should not exceed a third to half of your monthly take-home income. Child support is often considered income. Find a house that fits your price range. Property taxes and home owners insurance will have to be figured into your monthly payments, as well.

Credit
Lenders use credit scores to determine your ability to pay back the money they lend you. A low credit score could delay home ownership or qualify you at a higher interest rate. If your credit could use help, take steps now to reduce debt and be sure to pay all of your bills on time.

Negotiate
Nothing is set in stone, especially the cost of housing during a recession. Do your homework. Look up the taxable value of the home on the website of the appraisal district where the house is located and see how it compares to the asking price. You might also get pre-approved for your mortgage before you shop. Sellers are more willing to negotiate when they see on paper that you only qualify for a certain amount of money.

Find a good realtor
A good real estate agent will have experience with customers of all incomes, budget and concerns. They can help you find the right house for your needs.

Be Aware of the Latest Consumer Scams

The widespread use of mobile technology and social networking have increased the risk of financial fraud and identity theft.  While scammers are seemingly everywhere, consumers can do a lot to protect themselves, and it starts with being aware of the scams that are out there.

Checking Scams: One of the most prevalent scams that can lead to financial fraud or identity theft is account check and phishing cons.  Be alert to account checking scams in which a phony representative of a financial institution or supplier contacts you by phone or e-mail to ask for account details to update their records. Remember, do not give any personal information or debit card information to these individuals.

Online shopping threats: To avoid being yet another victim, online shoppers should always shop on safe sites that have SSL (a protocol for secure communications) certification, indicated by a locked padlock at the top of the screen and an ‘s’ in the address line (https://webaddress). 

Seasonal spyware: The number of malicious e-cards circulating to personal and business computers is expected to rise. Do not open an e-mail or attachment from an unknown sender and do not download ‘exe’ files as these often contain adware, unwanted downloads and spyware.

Beware of ATM skimmers: If you think someone is too close behind you or looking over your shoulder, find a different ATM.  Some skimming scams have involved fitting the front of an ATM with a false panel containing a small webcam or digital camera that can capture your card details. If the ATM appears to be behaving oddly or does not work the first time, go to a different machine; don’t try it again!

Protect your new laptop: If you received a new PC or laptop running on MS Vista or Windows 7 as a gift, make sure you are using anti-malware software and have enabled the firewall before connecting to the Internet.  Whether you are connected to a wireless network or via a cable, on average, it can take just nine seconds for your new laptop to receive its first ‘ping’ attack and less than a minute to receive its first virus.

‘Free’ Wi-Fi and wireless network hacking: If you are using that new laptop on a wireless network at home or workplace, make sure that network is secure.  This is because the Wi-Fi network range will radiate beyond the confines of your building, leaving it vulnerable to “wardriving” (the act of searching for Wi-Fi wireless networks by a person in a moving vehicle, using a portable computer so they can use your unsecured network for free).

Why Should You Avoid a Check Cashing Service?

If you have a checking account with us or another financial institution, you may wonder why anyone would go to a special service just to cash a check. There are two primary reasons: 1) they don’t have a regular checking account, or 2) They need a cash advance or short-term loan. Why should you avoid these places? Because they do exactly what a regular financial institution does but charge a whole lot more money.

Check cashing services would have customers believe they are actually cheaper than a typical financial institution, but it’s simply not true. Typically, they charge anywhere from 3 percent to 5 percent of the check just to cash it. So, cashing a $1,000 pay check would cost $30 to $50. Multiply that by 26 pay checks a year, and you’re paying between $780 and $1,300 to access your own money. That could be an extra mortgage payment every year, or vacation money, or just money to save for emergencies so you don’t have to use a credit card. If you have a free checking account with direct deposit, it costs you nothing to access your money, and you don’t have to go anywhere to do it.

Short-term loans are where check cashing services really make their money, though. Also known as pay day loans, these places typically charge $20 for every $100 borrowed. In theory, that loan should be paid off with the next pay check, but it doesn’t always happen that way, and debt mounts quickly. If it took a year to pay off that loan, you could end up paying 400% APR interest or more. That’s 20 times more interest than a high-interest credit card. If you can’t pay off the card, how will you ever pay off a 400 percent loan?

Some Alternatives to Consider:
Use overdraft protection as a short-term loan. Rates on our line of credit loans are low and we can deduct payments automatically on pay day so you pay off the loan faster.

Neighborhood also offers other simple interest loans when you need money for emergencies.  Quick Cash is our payday loan alternative.

Spend less and save more. We know it’s easier said than done, but you can do it if you make a budget and stick to it. Think about it. If you took that check cashing fee and had it automatically deposited from your pay check to a prize savings account every pay day, you would save up to $1,300 in a year.

BALANCE
If you’re really struggling to makes ends meet or your debt is out of control, take advantage of our free BALANCE program. BALANCE provides free financial counseling and education to help you manage your money, debt and credit score.

Always come to your credit union first for financial help. It will save you a lot of money and headaches down the road.

How Can You Stretch Your Entertainment Dollars?

Every family deserves a night out once in a while – even those with the tightest of budgets. Here are some tips for stretching your entertainment dollars.

Kids Eat Free
Restaurants across the Dallas/Fort Worth Metroplex have set nights when kids eat free. In most cases, they comp one child for each paying adult, but conditions vary. Click here for a fairly comprehensive list of restaurants and their rules, but don’t stop there. If your favorite restaurant isn’t on the list, call them. If your restaurant is on the list, but your city isn’t listed, call your location to inquire.

2 for $20

Chili’s and Applebees restaurants both offer special menus that enable two adults to eat for $20. At Chili’s, you get one appetizer to share, two dinner entrees and one dessert to share. Applebees gives you one appetizer to share and two entrees. Drinks are not included in the $20 price.

Movies

If you love the big screen but hate the big price, see the matinee. Both AMC and Cinemark offer $5 tickets across the board for any movie that starts before noon, any day of the week. If you sign up for their movie cards, a coupon for free or discounted refreshments is usually attached to the ticket. In the summer, both of these movie chains also offer free and $1 movies on set mornings. Schedules and details will be on their websites in the spring. Of course, you can always do a search for dollar movie theaters on Google.

Rent Movies

Family Video’s new releases are $3 or less for five nights. Family Video also has an entire kid section at every location with hundreds of FREE rentals  – no purchase necessary. Membership is free, and all rentals are half price the first month. After that, renew your half price option for $9.95 a month. Your local movie rental store may offer similar deals.

Movie Trading Company buys, rents and sells videos. Consider buying an older $5 DVD at Wal-Mart or Big Lots and trade it to Movie Trading Company when you’re done with it. Watch the one you got on trade, then trade that in, and keep the cycle going.

Netflix is the largest online movie rental service. Rent as many movies as you can watch starting at 8.99 a month. Blockbuster online offers a similar service for movie downloads. Blockbuster also offers unlimited video gaming starting at $15 a month.

Bowling

Register your kids at kidsbowlfree.com and get two free games per child all summer long at participating bowling alleys.

Coupons and Special Deals

Entertainment Pass Books are filled with hundreds of discounts on food, attractions, groceries and even travel. Plus, there are more deals online at entertainment.com. The 2010 books are now just $22.75 with free shipping.

Online merchants like adpages.com and restaurant.com offer steep discounts on restaurant gift certificates. Get $25 certificates for as low as $2 and feed your own family.

And, never overlook websites for your favorite restaurants and attractions. You can often get serious discounts by signing up for e-mail newsletters offers.

Cheap Places to Take Kids on a Three-Day Weekend

Everyone needs a vacation, but how do you do it when money is tight? Sometimes, you stay close to home. Sometimes you stay at home and take local day trips. Here are some ideas to help you get away without busting the budget.

State Parks
With over 90 state parks to choose from in Texas, there’s no end to the hiking, biking, swimming, fishing, nature trails and camping for the whole family to enjoy. Just $60 a year for a Texas State Parks Pass gets your vehicle, with as many people as it can hold, into any Texas state park for 365 days, plus discounts and coupons on camping facilities. Each park also has daily pricing.

For the state’s Parks Getaway online publication, click here.
For a map of the state parks closest to Dallas, click here.

Glen Rose, TX
If your kids love Dinosaurs and animals, this is the place to be. Glen Rose is a small city west of Fort Worth. It is home to Dinosaur Valley State Park, Dinosaur World and Fossil Rim Wildlife Center, to name a few. Explore dinosaur tracks, dig for fossils and more. Then, take a ride through a 9.5 mile safari park. Glen Rose is also home to accommodations that range from hotels and motels, cottages, rustic cabin and bed and breakfasts.

Grapevine, TX
>> Head to DFW International Airport or a nearby park to watch airplanes take off and land.

>> Spend a half day at the Bass Pro Shop. Watch their staff feed alligators and fish, and take part in their many free workshops and activities.

>> There’s a lot to do at Grapevine Mills Mall that doesn’t involve shopping. Catch a $5 matinee at the AMC Theater.  Head to the indoor skate park or the indoor ice skating rink. Visit the arcade. There are also specialty toy stores where kids can play for free.

>> Board the Grapevine Vintage Railroad and take a day trip to the Fort Worth Stock Yards.

>> Stay at home or find affordable accommodations here.

Fair Park
Home to the state fairgrounds, Fair Park has seven different museums and attractions, and most are kid friendly. Get a Fair Park passport and visit all seven museums for only $13.99 per child and $23.99 per adult. Plus, ride the swan boats, see native plants and flowers and so much more. Coming this summer is Summer Place Park - a state fair style midway open all summer long. Museums at Fair Park include:

• African-American Museum
• Museum of the American Railroad
• Museum of Nature & Science/TI Founders IMAX® Theater
• The Women’s Museum
• The Dallas Aquarium at Fair Park
• The Hall of State
• Texas Discovery Gardens
• South Dallas Cultural Center

Pick a City
Just about every city has something special to experience. Pick one you’ve never been to and Google it’s Convention and Visitor’s Bureau to find affordable deals. Another idea to hop aboard the DART rail, pick a stop and explore what’s there. You can do a lot on a small budget when you use a little creativity.

 

PSA Winner Donates Winning Money to Haiti Relief

Neighborhood Credit Union's Prize Savings Account continues to make a difference in member’s lives. Now, it’s making a difference in Haiti, as well. Jim, one of our monthly prize winners, has requested that we donate his $1,000 prize to the American Red Cross to support Haiti relief and development.

“I was surfing the web and noticing the scams out there for the Haiti relief efforts. That's why I contacted MYNCU for advice,” said Jim, who does not want his last name published.

Jim said he was mildly surprised to learn he had won the money. A few of his co-workers heard that he had won something, but he didn’t know what the prize was until he was contacted by the credit union. Neighborhood Credit Union awards several monthly cash prizes to members with a Prize account, but only one member wins the big $1,000 prize.

The timing of this month’s prize just happened to be right. Jim believes Haiti needed the money more than he does.  However, if there wasn’t a crisis in Haiti, he still would have given the money away.

“I would have divided it up between my family members,” he said.

Jim has been a loyal member of Neighborhood Credit Union member since 1973.  He says the credit union has been loyal to him as well.

“The credit union has always served my needs and been there for me,” he said.

Our Prize Savings Account is a one-of-a kind bargain you won’t find at any other financial institution in the area. Simply save money, and you’ll be entered in a drawing to win cash or prizes.

How the Prize Savings Account works: Neighborhood Credit Union members receive one drawing entry for every $25 monthly average balance in their Prize Savings Account. The greater the savings, the greater chance a member has of winning. Each month, drawings are held for prizes including $1,000 cash rewards. Each quarter, the credit union also awards a plasma TV and $1,000 in cash. At the end of each year, a $25,000 grand prize winner is drawn based on the amount in savings at the close of business December 31.

Click here to learn more about the Prize Savings Account.

Where Does My Money Go?

How to Control Discretionary Spending

It happens to many of us. Pay day comes, we pay our bills and with any luck, there’s money left over to spend how we see fit. That’s discretionary income, and for many of us, it seems to vanish into thin air. Where does all our money go? Eating out, spontaneous stops at the grocery store and even small purchases like soft drinks and coffee add up fast.

The best way to control spending is to budget for regular expenses/bills and track every discretionary penny you spend. There are several ways to do this.

Keep Your Receipts
Keep all of your receipts for one month. Get yourself a shoe box, envelope or sealable bag, and every time you purchase something, put the receipt in there. If the receipt is not itemized, write down what you bought on the back. At the end of 30 days, add all the receipts to see how much you spent and on what. It may surprise you to see how many stops you make at the local coffee shop or at the grocery store for one or two items.

Spending Journal
Keep a journal of every penny you spend for a month or one pay period. Every time you purchase something, write it in the journal. You don’t have to write down your electric bill or mortgage, as long as you keep a budget for those items. Similar to the receipt method, a spending journal shows you exactly how you are spending your money and lets you know where you need to make adjustments.

Discretionary Account
Use a separate checking account/debit card earmarked for discretionary spending. Each pay period, transfer a set amount of money into that account. When it’s gone, you’re done spending until the next pay period. Be sure to opt out of overdraft protection or courtesy pay just on this account to keep yourself from over spending.

Cash Only
Withdraw your discretionary money from your account and use only cash for those purchases. When the cash is gone, you’re done spending until the next pay period.

Envelope System
Decide how much money you’ll spend each month or each pay period in major categories like Eating Out, Groceries, Gas, etc. Write one category on each envelope along with the amount of money you’re allowing yourself for the month or pay period. Put that amount of cash in each envelope. You can transfer cash from envelope to envelope as needed, but when the cash is gone, you’re done spending until the next budget timeframe begins.

The key to all of these methods is keeping yourself honest and making adjustments to keep the money from vanishing. Find the categories on which you spend the most money and set firm limits for yourself to keep spending under control. Next time you need money, you may just have some.