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Buying a home is one of life’s biggest moments. For most people, it’s the biggest purchase they’ll ever make, and every penny is worth it when all goes well. But how can you increase your odds of landing the perfect, affordable home without too much stress along the way? Well, follow this guide and we’ll help you get there.
 

Determining what you can afford

Before you even start thinking about the home itself, it’s a good idea to figure out how much home you can afford in the first place. When lenders are considering what you can afford and what interest rate you’ll pay, most look at one of three factors:

 

• Maximum mortgage payment. Your monthly mortgage payment should not exceed 28% of your gross monthly income (your income before taxes).
• Total housing payment. Your mortgage, homeowner’s insurance, private mortgage insurance, association fees and property taxes should not total more than 32% of your gross monthly income.
• Total debt payments. Debt payments, including other loans and minimum credit card payments, shouldn’t be more than 40% of your gross monthly income.

Lenders will also consider your credit score when determining the interest rate on your mortgage, with scores of about 740 and higher qualifying for the lowest rates. If you’re applying as a couple, both of your scores will be evaluated. If one person’s score is low, that could be enough to disqualify both of you. That person will either need to improve their credit, or the person with good credit will need enough income that they can qualify for the loan themselves.

To get a rough idea of the mortgage amount you will be able to afford, try using our new house calculator. But while it’s a good estimate, you won’t have a better idea of what you actually qualify for until you speak with a mortgage specialist. They can help you determine which mortgages you qualify for and how much of a down payment you’ll need. You can start the process at Advancial by applying online.

Preparing for your home search

After meeting with a mortgage specialist, you’ll want to secure preapproval for a home loan. Preapproval lets sellers and your real estate agent know how much you’re qualified to borrow, the loan type you’ll have and the amount you plan to have as down payment. A preapproval letter in hand will also make you a more serious contender once you start placing offers for homes.

To help make the home search and purchase process go more smoothly, it’s wise to spend time looking for a quality real estate agent. You’ll want somebody with plenty of experience and who is familiar with the area. Read more about choosing a real estate agent.

Making an offer and down payment 101

After you’ve fallen in love with a home, it’s time to make an offer. Get help from your agent to determine what a competitive offer would be. You should include offer price, a deadline to respond and any contingencies (such as a passing home inspection and repairs if anything is found).

This is also the time when you’ll want to have your down payment readily available for your lender. Many people see the down payment as their biggest barrier to buying a home. But down payment requirements can vary widely depending on the loan type and price of the home — plus, some mortgages allow you to fund the down payment via a gift from a family member.

Traditionally, it was expected that 20% of the home’s cost be paid as a down payment. This was a way for the lender to offset their risk. Today, many mortgage types still require a 20% down payment, unless you pay for mortgage insurance. Mortgage insurance increases your monthly mortgage payment and helps protect the lender in the event that you can no longer afford your mortgage.

Choosing whether to make a 20% down payment or a smaller down payment with mortgage insurance can be a tricky decision. A bigger down payment could mean a smaller monthly payment, a lower interest rate and less money spent over the life of the loan. But a small down payment would leave you with more money at the onset of the mortgage. Fortunately, at Advancial, you don’t need to worry about down payments or mortgage insurance as a first-time homebuyer. Our 100% Financing Program lets you skip the down payment and keep monthly payments low.

Keep in mind that regardless of your down payment amount, you’ll still need funds for closing costs (usually about 3% of the purchase price) and earnest money, which is a type of security deposit (usually between 1% and 3%).

Get an inspection and seal the deal

Once the seller accepts your offer, you’ll need to do a few final things before the home is yours. One of the most important is getting an inspection done on the house by a certified professional. The inspector will check the home’s structure, roof, heating, plumbing and electrical systems for any potential issues. If anything serious is found, you could ask for the issue to be fixed based on your offer’s contingency.

After the inspection process is finished and you review any repairs made, you’ll be able to close the deal. You’ll sign a stack of paperwork alongside your real estate agent and lender. And with that, you’ll be handed the keys and be the proud new owner of a home. Congratulations!

There’s no place like (a new) home

Learn more about our First Time Home Buyers Program and fill out our quick online application to get started. An Advancial Mortgage loan officer will follow up to learn more about your financing needs and discuss your options.

 

 

Buying a car requires a lot of time and research. And that’s just deciding on the model and features! So of course the financial aspect can seem overwhelming to add on top of everything else. That’s why we’ve created this guide to help you navigate the process of financing your next set of wheels. 

What lenders consider

To secure a loan for your new or used car, you’ll need to meet certain qualifications set by the lender. The better you meet these qualifications, the more likely it is that you’ll be approved and offered a low rate.

Most lenders look at the following:

• Credit history and debt load. The lender will want to know if you’ve had a good record of repaying debts in full and on time. They will also check how much debt you have to determine if you can afford an auto loan in your budget. Your credit score and credit report will provide all of this information to lenders, so be sure to check yours before applying for a loan.

• Down payment amount. Dropping a large down payment on your car can help you qualify for a better loan. Financial experts recommend putting down at least 20% of the purchase price for a new car. Used car purchases should ideally have at least a 10% down payment.

• Loan term. Most auto loans range from three to six years in length. Opting for a longer loan term can cut down on your monthly payments, but raise your interest rate. If you can afford the higher payments, you can save more money in the long run with a shorter term loan.

• New versus used. Used cars have the benefit of usually costing less than new cars, which means a smaller loan to pay off. New cars, however, are more likely to qualify for better interest rates. At Advancial, you can rest assured that our auto loan rates are the same whether you choose used or new.

Dealership vs. credit union loans

Dealerships frequently advertise their financing specials, enticing people to come in. But the dealership isn’t necessarily your best choice for an auto loan, as they act as a middleman and frequently mark up their loan rates. Other times the loan offer might truly be great, but the conditions to qualify are so strict that it’s difficult to get approved.

Going directly to a credit union for a loan cuts out the middleman, making it easier to get a low rate. Plus, as a not-for-profit, a credit union like Advancial operates for the good of its members instead of profit. On top of all that, getting preapproved for a car loan at Advancial gives you an advantage at the dealership.

The power of preapproval

Getting preapproved for an auto loan doesn’t just help you set a budget. It’s a powerful bargaining chip as well. To the dealership, you’re the same as a cash buyer, meaning the dealer can’t negotiate based off of the monthly payment. Instead, they’re forced to negotiate the total price of the car, meaning you’re likely to pay less – and negotiate less – overall. You’ll also avoid unnecessary add-ons, because you’re preapproved for a set amount and can’t go over it.

Extra costs to consider

Before making your purchase, you should know that the price of car itself isn’t all you’ll need to pay. You can expect several other costs that may put you above your loan preapproval amount:

 • Sales tax. This can easily equal thousands of dollars. For instance, a $34,000 car taxed at 6.25% will be charged $2,125 in taxes.

• Title and registration. Title and registration fees vary widely by state, but expect to pay an average of about $100 for these fees.

• Dealership fees. Not every dealership has these fees and they are negotiable. According to Edmunds, the median price of dealership fees is $150 in Texas, $299 in Oklahoma, and $200 in Louisiana and Alaska.

Frequently Asked Questions on Auto Loans

Can I get an auto loan if I have bad credit?

Auto loans aren’t as difficult to qualify for as some other types of loans. However, not everyone will qualify for an auto loan. Work on improving your credit and/or apply with a co-applicant to increase your odds of being approved.

Are APR and interest rate the same thing?

The interest rate applies to the principal balance of a loan only. APR, or annual percentage rate, also factors in fees and costs of the loan.

What is GAP insurance and should I get it?

GAP insurance, or guaranteed asset protection insurance, is optional protection for car buyers. In the event of a total loss of your car, it can help cover the costs that auto insurance may not cover. This gap in coverage is due to a new car’s significant drop in value in the first few years of ownership. Standard auto insurance will cover the car’s market value and not necessarily what you owe on the loan. GAP insurance covers the difference.

What are Advancial’s current rates for auto loans?

You can find our most up-to-date loan rates online.

When is the best time of the year to buy a car?

The end of the year is one of the best times to buy a car. It’s in October, November, and December that most dealerships are working to meet yearly and quarterly sales goals. To incentivize a sale, dealers are more likely to offer a good deal during these months. If you can’t make the end of the year, the next best thing is the end of each financial quarter - specifically the last week or last day of the quarter if you can swing that.

Can anyone apply for an auto loan through Advancial?

We welcome anyone to complete a loan application with us. If you aren’t yet an Advancial member and you apply for an auto loan with us, we will contact you to discuss how you may be eligible for Advancial membership.

Ready to get the show on the road?

The team at Advancial can help you get preapproved for an auto loan. Visit us online or stop by one of our branches to start an application and learn more about our auto loans.

Three simple digits. That’s all it takes to capture the quality of your credit history. It seems simplistic, but credit scores are an important tool that lenders use for virtually all loan and credit applications. Those three digits help lenders determine if they can trust you to repay a loan fully and on-time.

How credit scores are calculated

First, a clarification: You actually have many different credit scores generated by various credit bureaus and data analytics companies. However, the most common are FICO^® score and VantageScore 3.0. Both of these scoring types use a range of 300 to 850, with 300 being considered “very poor” and 850 being “excellent.” A good credit score, 700 and up, puts you in a better position to get loans and credit cards with lower rates.

Here’s how different aspects of your credit history are considered when calculating your FICO score and VantageScore:

Payment history – 35%

Payments made on time raise your credit score, and late payments bring it down. Advancial can help you pay bills on time with our electronic Bill Payer service.

Credit utilization – 30%

Credit utilization measures the debt you owe compared to the total credit you have available. Reducing your debt can help keep your credit utilization low.

Length of credit history – 15%

Old accounts you consistently use can help improve your score. If most of your accounts skew toward being newer or you have accounts that you no longer use, your score may be docked.

New credit – 10%

When you apply for a new credit card or loan, a hard inquiry into your credit history can ding your credit score. Opening several accounts within a short period can also have a negative effect.

Types of credit – 10%

Managing multiple forms of credit (e.g., auto loans, student loans, credit cards) responsibly can boost your score. Lenders like to see a track record of repaying both revolving credit and installment accounts.

How credit scores are used

Your credit score might be pulled in a variety of circumstances:

• Loans and credit. When you apply to borrow money such as for an auto loan or a new credit card, the lender will look at your credit score to determine your eligibility and interest rate.

• Insurance. Insurers can pull a version of your credit score, known as an insurance score, to determine your auto insurance rate. Note that this practice is banned in some states.

• Renting. When you apply to rent an apartment or duplex, the landlord will check your credit score. This can influence whether you may need a co-signer or a larger security deposit.

Despite popular belief, employers and utility companies don’t access your credit score. However, they may be able to request a copy of your credit report.

Benefits of a good credit score

As we’ve touched on, having a good credit score can be extremely beneficial for reaching your financial goals. A high credit score can help you:

• Qualify for loans
• Get lower interest rates
• Need smaller down payments
• Score a lower insurance rate
• Be approved for higher credit limits

Strategies to improve your credit score

Improve your credit score and reap the benefits with these tips:

• Keep your credit utilization ratio below 30%. Accomplish this by fully paying off your credit card statements and charging less to credit.

• Avoid closing old accounts. Unless you’re accruing fees, it’s generally better to leave old accounts open as they improve your credit utilization ratio and your average account age.

• Don't open unnecessary new accounts. If you know you’ll need a high credit score to open a future account – like a mortgage – it’s wise to not open accounts that you don’t need.

• Settle all fines and tickets. An outstanding parking ticket or even library fines can reduce your score if a collection agency gets involved. Concentrate on saving money to pay off these debts and any additional fees.

• Correct any errors on your credit reports. Your credit score is based on the information included in your credit report, so it pays to review it for inaccuracies. Federal law entitles you to a free copy of your report once every 12 months from each of the three major credit bureaus (Equifax, Experian, and TransUnion). Simply go to annualcreditreport.com or call 877.322.8228.

• Make payments on a secured loan or secured credit card. These lending options are specifically designed to help people improve their credit. You borrow against your funds and slowly repay over time.

Learn more ways you can build credit.

If you’re in the market for a rewards credit card, you may be wondering which is the best for you. Before you apply, be sure to consider:

1. Rewards you’ll actually use. For example, one card may provide generous airline miles – great, unless you prefer road trips or staying close to home. Even if you enjoy travel, airline-branded credit cards generally provide points that are good only for purchasing tickets on that particular airline. If you want to go someplace they don’t fly, you’re out of luck. If you’re an avid shopper, you might prefer a card that lets you redeem points for merchandise. Or, maybe you’d just like to get cash back on your purchases and stash that money in a savings account.
2. The annual percentage rate (APR). Many cards come with interest rates of 25% or higher. If you tend to carry a balance, these cards likely will cost you more in interest than you would earn in rewards. Tip: Work on improving your credit score to qualify for the best rate.
3. The annual fee. Some cards charge an annual fee ranging from $25 to hundreds of dollars. Consider a card with a $69 annual fee that offers 1.5% cash back on all purchases. If you spent $5,000 during the year, you could expect $75 in rewards – but after your annual fee, you’d net only $6.
4. The balance transfer fee. According to Bankrate.com, a typical balance transfer fee is 3%.* That means if you transfer a $5,000 balance to a new card, it will cost you $150. Look for a card with a no transfer fee if you intend to transfer a balance.
5. Whether you can earn bonus points. Certain cards provide additional points or discounts if you shop at specific service providers or merchants.
6. Whether you can pool points. Some issuers provide rewards points on debit cards as well as credit cards and let you pool the points to get to a desired reward level faster.

Leverage your card for faster rewards

Once you choose the right card, these strategies can help you pile up points even faster:

1. Use your credit card for everyday spending. Consider charging that daily latte, dinner out or other purchases to your credit card. Just be careful to keep track of spending so you stay within your budget.
2. Use automatic billing. You generally can have monthly bills, such as cellphone and utilities, automatically charged to your credit card. Again, be sure you budget for these expenses.
3. Strive to pay off your outstanding balance each month. If you avoid paying interest charges, those points you earn are really money in your pocket!

Compare the benefits of Visa^® Rewards Plus

Once you research other cards, you’ll find that Advancial offers a wide range of perks. With Advancial’s Visa Rewards Plus credit card, you’ll:

• Earn 1 point (1%) for each dollar spent
• Earn 1.5% rewards if you spend $2,500 or make 25+ purchases during a billing cycle
• Enjoy 0% APR for the first 12 months after opening the card (plus, there’s no balance transfer fee)
• After that you’ll benefit from a low rate of 8.90% to 14.90% based on creditworthiness (that’s right, Advancial’s highest interest rate is lower than most institutions’ lowest rate)
• Earn bonus points when you use your Advancial debit or Visa Rewards Plus card for in-store or online purchases at popular local and national merchants through Ampre and Ampre Online
• Automatically combine debit and credit card points for more rewards and easy redemption

Perhaps best of all, you can redeem your points for cash back, merchandise, travel, gift cards, green products and charitable donations – the choice is yours!

Visit Advancial to learn more about our credit cards, including Visa Rewards Plus, Secured Savings Visa^® or Dinero Visa for teens and young adults, or to apply online.


* Source: Bankrate.com.
 
 

A checking account that makes you pay to access your own money is no friend to your finances. Truth is, plenty of banks charge fees that can chip away at your account balance. Not so at Advancial. Our checking accounts are designed to benefit your bottom line, not a bank’s shareholders.

Check out the Advancial difference

According to Bankrate.com, the average monthly service fee for non-interest-bearing checking is $5.57 – you’d need an average daily balance of more than $600 to avoid the fee. Interest-bearing accounts charge a whopping $14.35 a month on average (and you’d need to maintain an average daily balance of more than $6,000 to avoid the fee – yikes!). Overdraft fees average $33.23, and the average surcharge to use an out-of-network ATM is $3.02.*

A bank customer with an interest-bearing account who is unable to maintain the average daily balance could end up spending more than $172 a year in service fees. And that’s before adding in overdraft and foreign ATM fees.

In contrast, Advancial’s Ultimate Checking account offers:

• No monthly service fee
• No minimum balance**
• No overdraft transfer fee
• No foreign transaction fee
• $0 fee on non-Advancial ATM transactions***
• Free online and mobile banking
• Free checks

And that’s not all …

Our Ultimate Checking account also provides benefits you won’t see in most other checking accounts, including:

• Dividends. Earn dividends on your Ultimate Checking balance.**
• Debit card rewards. Earn 1 point for each $5 spent on your card. Redeem for travel, cash back or choose from a long list of gift cards and merchandise.
• Save Up^SM program. When you enroll in this program, Advancial rounds up all debit card transactions to the nearest dollar and transfers that amount to your savings account. It’s an easy, automatic way to build your savings or emergency fund. That change adds up!
• CO-OP Shared Branch Access. Enjoy access to 30,000 surcharge-free ATMs and more than 5,000 locations nationwide through the CO-OP Shared Branching Network.

Teens? Expats? We’re here for you, too

We want our younger members as well as new arrivals to the U.S. to benefit from Advancial’s checking programs:

Dinero Checking is designed for teens age 13 to 18. It offers many of the same features as Ultimate Checking – no minimum balance, free ATMs, no monthly fee, debit card rewards and the Save Up program. Dinero Checking helps teens learn about managing money, while allowing their parents to keep track of their spending (an adult is required to be co-owner of the account).

Inbound USA Checking is designed for recent expats. When you move to the U.S. for work or studies, it may be difficult to open a bank account. Inbound USA Checking makes it simple, with free checking and ATM access as well as no foreign transaction fees. Major banks in the U.S. may also offer expat banking accounts, but monthly fees usually start at $10 a month.

Start making the most of your money today with your Advancial membership. All it takes is a $5 deposit in an Advancial savings account and you’ll be on your way to taking advantage of everything we have to offer. To learn more about eligibility or to apply for membership, visit any Advancial location or go online.

* Source: Bankrate’s 2018 checking account and ATM fee study, bankrate.com.