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What's New At Mid American

Understanding mortgage closing costs

While interest rates are slowly going up after reaching record lows in 2010, they still remain low enough for people to consider refinancing their current mortgage or purchasing a new home.

Besides considering interest rates, current or prospective homeowners should also understand the variety of fees associated with securing a mortgage. Most closing fees are actually pass-through fees, meaning the money goes to third parties, such as government entities, other financial institutions or title companies. These fees are paid when closing, or finalizing, your mortgage.

 Here’s an explanation of some of those closing fees and what they cover:

  • Application fee. According to the Federal Reserve Board, institutions charge between $65 and $640. Some, like Mid American, charge lower fees. At Mid American, we charge a nominal fee of less than $20 for processing your credit report to start the application process.
  • Origination fees. These fees cover underwriting, document preparation and costs to deliver paperwork to other financial institutions.
  • Title fees. In order to process a mortgage, a property’s title must be free and clear of any liens or claims. A title company is hired to check this.
  • Registration and tax fees. The cost of these fees is related to the amount of the mortgage loan. These fees cover the processing of showing ownership and paying property taxes to the county.
  • Recording fees. All properties must be recorded with the register of deeds, a government entity.
  • Appraisal fees. The value of the property has to be determined, since it plays a part in your mortgage and equity, as well as how your property tax is assessed.
  • Points. One can purchase “points” to lower a mortgage interest rate. The industry standard is that the cost of each point is 1 percent of the loan amount. For example, on a $100,000 loan, one point would cost $1,000. Whether one should buy points depends on how long they intend to keep the loan.
Saving to buy a home

 

By Debbie Stang, Home Loan Officer

Buying a home is likely the single, largest purchase you will make in your lifetime. To make that step, be prepared to save money for a cash down payment and related home-buying expenses. Plus, make sure your credit is in good shape.

Most financial institutions require some sort of down payment, generally ranging from at least 3 percent to 20 percent of the purchase price of the home, to ensure you have an incentive and investment upfront in your home. (Only about a handful of mortgages, such as the VA and other government-related entities, will allow no down payment.) With a 20 percent down payment, you avoid having to purchase private mortgage insurance.

Saving for a down payment will mean being more focused on where your money goes. Start with a budget – if you don’t have one, develop one. Whether you use an online tool or old-fashioned pencil and paper, start tracking your income, your expenses and whatever else you spend your money on. In a short amount of time, you should be able to see where you might be able to scale back or make cuts. Put those dollars saved into a separate savings account to build up your down payment.

Be ruthless about cost-saving measures, like giving up a gym membership and using walking trails or parks instead, or brown-bagging lunches and giving up expensive coffees or smoothies to make your own. Do you have credit cards or auto loans? Check the rates and see if you can negotiate lower rates for savings. Take a second, temporary job to reach your goal faster. Another step is to check into homeownership assistance programs at the federal government’s HUD.

With a budget set, check on your credit score. The score is used by lenders to determine your ability to repay the loan and set your mortgage rate. Check your credit report – which can be done for free once annually from each credit reporting agency at annualcreditreport.com – to ensure it’s accurate. (Generally, you will need to pay a fee to receive your score.) Fixing errors can move up your score.

Our website offers several tips for first-time home buyers; check the section “Buying a Home.” You can calculate what you can afford and learn how to get preapproved, plus get information on our low mortgage rates for 15-, 20- and 30-year mortgages.

 

 

Ease the burden

By Jim Holt, President and CEO

We all understand the need for rules. Often, however, rules are made to solve a situation that has already occurred. Their sweep can be so broad that they penalize individuals and businesses that already had in place a set of policies designed to help and not take advantage of those they serve.

That is what has happened to credit unions, whose members – you and me – are paying out of our pockets for expensive regulatory oversights that were put in place because of banks.

The financial crisis of 2008 resulted from money center banks needing to be bailed out. Since that time, the federal government has added a huge number of regulations intended to rein in these banks. Unfortunately, these new regulations are hurting credit unions and their members even though we did not cause or contribute to the crisis in the first place. Regulations cost time and money – more complexity, more paperwork, more fees – that we would rather spend on providing services to benefit you.

Since 2010, regulatory costs for credit unions nationwide have increased by 39 percent, driving up overall costs to a staggering $7.2 billion annually. Credit unions have lost $1.1 billion nationally in revenue due to regulatory costs. In Kansas, the impact of these regulations has been more than $44 million – more than $39 million spent in compliance and $5 million in lost revenue.

Every penny we spend trying to fix a problem we don’t have is money we cannot return to you. Less money spent on excessive, expensive regulations would mean higher interest rates on deposits, more services and products and lower loan rates – all of which would more directly benefit you.

 We need your help to turn this situation around, and as a member-owner, you can make your concern heard. Mid American Credit Union is joining with our national organization, the Credit Union National Association (CUNA), to educate and help activate America’s 105 million credit union members about this situation.

To assist you, CUNA has helped establish a website, www.easetheburden.com, with more information and a way to act on this issue. Through the site, all it takes is one email – using a prewritten message or one with your own words – to contact all of your Congressional representatives to ask them to “Ease the Burden.” No personal information about you will be gathered or retained if you visit this site.

Please consider taking action today.

 

 

New, in-house call center to open

From Kim Wheelock, Vice President of Information and Remote Sevice

Remodeling is underway at Mid American’s west Wichita branch to create a new, in-house call center to help handle service calls from our members.

The Member Contact Center is expected to open in mid-summer, and will be staffed by a total of  eight employees who will be dedicated to handling member service calls during normal Mid American business hours. After-hours calls will continue to be handled by the Texas call center that for the past several years has been handling those calls, as well as daytime overflow calls.

"Opening an in-house call center is going to be a tremendous service for our members, many of whom have asked for this benefit to help them with their questions and financial needs," said Mid American President and CEO Jim Holt. "The Member Contact Center is a way for us to continue our intent to provide world class service and meet our vision of exceeding our members’ expectations every day."

We have a lot to offer

By Jim Holt, President and CEO

On April 2, Mid American’s merger with Wesley Medical Credit Union in Wichita is scheduled to be finalized. This will mark our third merger in little more than a year and bring our total number of branches to 11, with six of them being in Wichita.

I want to take this opportunity to welcome the newest members of our financial family and also to inform them and remind our current members about several benefits of Mid American membership.

• A life’s worth of products. From youth accounts that can be started at the birth of a child to health savings account to retirement accounts, Mid American can help you with financial products and services for various life events.

With our spectrum of savings accounts, you can save for a vacation, holidays, college and more. If you are an entrepreneur, take advantage of our business services accounts. If you need a home or mode of transportation, we can help finance those dreams. If you need credit, we offer great rates for home equity loans and credit cards. For teens who want to start on the road to financial independence and for seniors who want to start on the road to independence from a career, we can provide you with accounts and resources to plan for that.

• A national network of branches and ATMs. Mid American was one of the first Wichita credit unions of an early initiative to join credit unions across the U.S. in a shared branching network. Through our involvement with CO-OP, you can visit more than 5,000 Shared Branch facilities to make in-person transactions, just as if you are visiting one of our branches. You also can use any of the nearly 30,000 surcharge-free CO-OP ATMs in the U.S. Just look for the CO-OP signage.

• A sophisticated online presence. Many of our members prefer the 24/7 nature of online and mobile banking. That is why we invested in a state-of-the-art online banking system in 2014 and continue to add features to that and our mobile banking system.

• A little extra help. If you need to learn more about certain financial situations or how to budget, we are here to help. We offer occasional seminars at our branches, such as home-buying or retirement investing (see Page 2), and onsite seminars for employees of our preferred partners employer program. If you need help finding ways to save money or even balance a checkbook, our member services representatives are happy to assist you or help you secure the service of the free Kansas Consumer Credit Counseling Service.

Remember that credit unions are about people helping people. That is why our staff and volunteers are always ready to help you with your financial needs.

 

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Become an advocate

By Jim Holt, President and CEO

As a member/owner of a credit union, you make a difference. You are one of 103 million members who have made the decision to trust a not-for-profit cooperative to be your financial home.

We value that trust and work diligently to provide you with the services and products you need. However, every year, credit unions, their supporting organizations and members find themselves trying to ensure that we can continue to operate in your best interest.

At Mid American Credit Union, we regularly communicate with and educate legislators, policymakers and other leaders about the important role we play and how we differ from banks. (As you may recall, my last Member Insight column focused on the differences between banks and credit unions.) In the past, for example, we have educated legislators and policymakers on such topics as the fact that a federal income tax would just be another cost for our members to bear.

On our own, however, this advocacy often goes unheeded. We are going to need your help to make a difference.

Forty-two percent of voters are credit union members, according to Credit Union National Association. Legislators and policymakers need and want to hear from people such as our members who are impacted by policies that affect their financial well-being and the credit unions to which they belong. Many credit union members, both nationally and locally, comprise the middle class who are frequently referred to by political candidates during campaign speeches. It is important to become an informed voter and citizen.

In the upcoming months, you can expect to hear from us about different issues that could impact credit unions. We ask that you consider becoming informed and taking action, because, as a member-owner, you have a vested interest in these policies. And there is power in numbers...

Staying physically and financially healthy

From Emily Rienhardt, blogger for Mid American's Money Matters finance blog.

Gym and health club memberships tend to increase in January as well-intentioned individuals try to make good on resolutions to get in better shape, lose weight or become more physically active.

There are some people who firmly believe a gym membership is the only way they can be held accountable for their health or weight loss goals. For some, it can be a waste of money.

Here are some things to consider, along with tips for cheaper alternatives for staying physically fit.

Make sure you’re fully committed. A gym membership requires more than a mental and physical commitment, it requires a financial commitment. Will you be able to make it worthwhile or will your membership become a monthly “donation” to the gym or health club? Not to be discouraging, but check out the cancellation policy, as well, before making that financial commitment.

Gyms pull crowds. Peak times tend to be in the morning and in the evening, before and after a typical workday. Nothing is more frustrating than being ready to work out and not having the piece of equipment you prefer to exercise on or not being able to get in a full workout because you spent a lot of time waiting for equipment to free up. If you’re thinking about joining a gym in your area, check in on it at those peak times.

There are several free options to achieving fitness goals that have side benefits. For example, take a nice long hike through your neighborhood with friends or family. You'll be spending quality time with people you care about and getting in exercise. Drive to different neighborhoods or parks and explore your community. Walking the dog is also a great way to exercise both your pet and yourself. Find free YouTube exercises online.

If you're committed to making time for workouts, you can consider investing in at-home equipment, a variety of workout DVDs, stability training tools, or even a great pair of walking or running shoes. Or take up bike riding if there are bike-friendly routes and trails in your area. Maybe you can even use your bike to commute to work.

It’s important to weigh your options first and be honest about how you plan to achieve your fitness and well-being goals. If you decide you need a gym membership, squeeze it into your budget where you can.

If you find less-expensive ways to meet your fitness goals, think about investing the money you would have spent on a gym or health club membership in a Mid American savings or vacation account. That way you can achieve some financial well-being along with physical well-being. And if you've saved for a vacation, maybe you'll have some time to recharge your mental well-being, as well.

 

 For more articles on personal finance visit, Money Matters

 

 

Mid American's plans for EMV cards

What are EMV cards?

EMV stands for Europay, VISA and MasterCard.  Currently, traditional card transactions are processed through the information contained on the magnetic stripe of the card.  With EMV cards, a small computer chip is included in the card.  The technology associated with the chip adds a layer of verification when the card is used at an EMV enabled terminal to help ensure that the card has not been duplicated.  You may hear EMV cards referred to as:

  • Smart card
  • Chip card
  • Smart-chip card
  • Chip-enabled smart card
  • Chip-and-choice card (PIN or signature)
  • EMV smart card
  • EMV card

When will I receive an EMV card from Mid American Credit Union?

At this point in time, Mid American Credit Union has not issued EMV cards.  We will continue to monitor terminal deployments, merchant readiness and other card processing factors to help us determine the best time to issue EMV-enabled cards.

Are merchants and financial institutions required to update to EMV?

No, there is no legal or regulatory requirement for either the merchant or the card issuer to update to EMV.  In fact, estimates are that only about 50% of terminals, 29% of credit cards and 17% of debit cards will be EMV-enabled by the end of 2015 with widespread rollout not anticipated for several years.

Will my Mid American card work in an EMV-enabled terminal?

EMV-enabled terminals also support current card-swipe technology, so you can use your existing Mid American card at any EMV-enabled merchant or ATM location.

Am I exposed to potential liability without an EMV card?

Your liability for fraudulent card transactions will not change.  You should continue to follow fraud prevention steps such as not disclosing account, personal or card information, monitoring account transactions and immediately reporting any unusual activity.

What is the significance of the October 1st date?

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In order to encourage EMV, merchants will now bear liability for fraudulent transactions if they continue to use non-EMV terminals. Consumer liability for transactions has not changed.

Will EMV cards eliminate card fraud?

No, EMV will not eliminate card fraud.  For example, since the physical card is not utilized for internet based-transactions, EMV will not protect against fraud in those situations. 

What is the value of EMV?

If fraudsters produce a copy of a traditional magnetic stripe card, they can use the card repeatedly because the data on the magnetic strip doesn’t change with each transaction.  With an EMV card, the computer chip creates a unique transaction code that changes with each use.  If chip information is breached, the typical card duplication would not work because the information would not be usable for other transactions.  EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from the data they’ve obtained.

Why the delay in full market acceptance?

With an $11 billion estimated price tag for full deployment, some merchants have delayed installation of EMV terminals.  Furthermore, EMV does not address fraud related to "card-not-present" transactions, such as internet-based transactions.

What are the cost considerations?

EMV cards are about two to three times more expensive to issue. This is a significant consideration for card issuers, such as Mid American, that proactively reissue all cards that may be affected by a merchant data breach.

In summary, we believe it will take some time to fully realize the potential security benefits of EMV cards. We will continue to monitor the progress in order to provide our members with the best security options available.

Mid American Credit Union8404 West Kellogg DriveWichita, KS 67209316.722.3921Fax 316.722.0920Privacy Policy