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First Time Home Buying

2/14/2018

There are a lot of new, fun and exciting rites of passage to becoming a full-fledged adult. One of the biggest decisions you have to make as an adult is not where you are taking your next vacation or what car to buy; it is what home you will buy.

Questions beyond just what home you will buy follow you through this process, how much of a down payment will you place on the home, how will you finance it, how long do you want to finance it. All of these questions can really stress an individual out and require hours and hours of research to solve.

Starting with the basics

What exactly is a mortgage? Well think of it as a huge loan that someone takes out to secure the purchase of a home or condominium. A first mortgage is a little different, as it is specifically the primary loan on a property. The other factor in a mortgage is your interest rate; this is the percentage you have to pay annually to have that money loaned to you.

How does it work?

When an individual, a couple or an organization want to purchase a property but do not have the capital on hand to pay for it, they take out a mortgage. Lending institutions, like Bellco Federal Credit Union, will provide the capital for the individual to purchase the property and then will be paid back over time.

The lender expects the home loan, or mortgage, to be repaid in monthly installments, which include a portion of the principal and interest payments. Interest is the amount of money that you have to pay to the institution to compensate them lending you the money where as the principal is the initial amount borrowed.

Mortgages sound complicated, but are they?

Mortgages, loans and home buying may seem intimidating, there are a lot of fancy words used, but it is actually quite a simple concept. A mortgage is a form of debt, so your initial thought may be to avoid this.

However, a mortgage is actually the most advised form of debt due to the security of the collateral. Additionally, mortgages usually come with some of the lowest interest rates compared to almost any other form of debt.

Want to know more?

If this brief introduction to the world of lending and mortgages piqued your interest and you want to know more, come to our free home buying and refinancing seminar. It will be held on February 28th at 6:00pm in Bellco’s Wyomissing branch. Sandwiches will be provided; you can listen to a fun and informative presentation from Bellco’s partnered insurance and real estate agents.

To RSVP for this seminar, email marketing@bellcocu.org!

 

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Kelsey Sheehy, NerdWallet

Mobile Apps Enable Banking on the Go

Smartphones keep getting smarter. Now you can use your phone to stream live television, track your physical activity and measure air temperature. Advances in mobile technology are also making it easier to manage your money.

Financial institutions like Bellco Federal Credit Union now offer mobile apps that let you do much of your banking on the go. And a new string of virtual wallets, including Apple Pay, Samsung Pay and Android Pay, make paying for purchases more convenient and secure.

Mobile banking

Banking apps are now standard at most credit unions. And customers can use them to do a lot more than just check their balance.

Some common features include tracking spending habits to see just how much money you're giving Starbucks or Amazon; transferring money between accounts, a helpful feature to avoid overdrawing your checking account if you're short a few dollars; and paying bills, sending money to friends or depositing money by simply snapping a photo of the front and back of a check.

Mobile payments

Virtual wallets aim to eliminate the panic and embarrassment of standing at the checkout with an armful of groceries, only to realize you left your wallet at home.

To use a virtual wallet like Apple Pay or Android Pay, you first need to upload your credit or debit card details to your mobile billfold. The apps make it easy: You can use the camera on your phone, or enter your account number and expiration date the old-fashioned way, via the keyboard.

As you add each card, the app confirms whether your credit union or card issuer supports mobile payments through that tool. Apple Pay was the first on the market and is available through most credit unions. Those that offer Apple Pay will likely add Samsung Pay and Android Pay in the future.

Paying with your virtual wallet is as simple as holding your phone close to the point-of-sale terminal -- the device you would otherwise swipe your card through -- and selecting which card you want to use. Your phone beams payment information to the terminal, and in most cases asks you to confirm the payment with a personal identification number or a fingerprint scan.

This all happens thanks to a technology called near field communication, or NFC. Not all retailers are set up for NFC transactions just yet, so look for the Apple Pay or Android Pay icon when you check out.

Payment security

Mobile payments might seem like easy pickings for hackers, but purchases made via virtual wallets are actually more secure than those made with the swipe of a credit card. That's because Apple Pay and other providers shield your account information using a process called tokenization.

Each card in your virtual wallet gets a token, which acts as a proxy for your account number. When you use your phone to pay at a retailer like Whole Foods or Target, your credit or debit card number is not transmitted. Instead, the token is used to process the payment.

The bottom line

Mobile apps can make banking faster and more convenient and, in the case of virtual wallets, make payments more secure. These apps aren't fail proof, though. A lost or stolen phone could put your accounts at risk, so treat it like a stolen wallet and notify your credit union and card issuer. The good news is you won't necessarily need to wait for new cards to be mailed.

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