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Spring 2003 Newsletter

The Pros and Cons of
Home Equity Debt Consolidation

For many years, the idea of tapping the equity in your home was financially smart when looking to make home improvements or fund a college education. Consumers now rely on Home Equity loans to make large purchases (to buy new vehicles, for instance) and consolidate higher interest debt such as unsecured loans and credit cards.





Cons

Although, initially this is a sound way of managing debt, some sources claim that the equity in your home should be left as your nest egg. According to Dorothy Rosen in a recent bankrate.com article, using a Home Equity loan to consolidate debt could have a negative impact on your finances.

• When people use debt to payoff debt, they often do not change their spending habits resulting in further debt.

• When the terms of a Home Equity loan are stretched over a long period of time, the consumer could actually end up paying more.

• When a Home Equity loan is used to finance debt, you can risk foreclosure on your home in the event of financial difficulties.

Pros

As long as you realize that your debt is simply transferred and not actually paid off, a Home Equity loan can be a financial benefit.

• Interest paid on a Home Equity loan is generally tax deductible (consult a tax advisor for determination).

• Interest rates on Home Equity loans are much lower than rates on most credit cards, making it possible to shorten the term of payback.

• In some cases, where multiple debts are combined, your new payment may actually be less than the combined total of each payment.

When you get set to refinance, you’ll want to find the right type of Home Equity loan and set a goal for when you want your debt paid off. Use your new-found credit card freedom wisely by not spending more than you make and putting a little aside each pay period in a “rainy day” savings account.

Need help deciding what’s best for your finances? Contact the Credit Union for more information about Home Equity loans and the benefits of consolidating debt.



Low Dealer Rate May Not Be The Best Deal

You’ve seen the ads. 0% financing! The dealers’ rates seem great. What could be wrong with this low rate? Plenty, if you take a closer look.

1. These low rates are often only available to those with the best credit records. One small credit blemish, and the rate goes up.

2. Many of the companies are offering these low rates for short terms, up to 36 months or less. That increases the amount of your monthly car payments.

3. The rates are sometimes only offered on certain slow selling models, leaving out the most popular cars and trucks.

4. In some cases, accepting dealer financing means you forfeit your opportunity to get a rebate on your purchase, making the purchase price of the vehicle higher.

Additionally, consider the total cost of the loan. Will you be charged an application fee? Is there a pre-payment penalty? What will be your monthly payment? Then, be sure to compare your total payments!

You’ll find your best deal could come from skipping the low dealer rate, taking the dealer rebates, and financing your vehicle with the Credit Union. We will be happy to help you figure out how much the dealer financing will cost compared to an auto loan from us. Call the Credit Union today!

For your protection
USA Patriot Act

Soon, all financial institutions will be required to comply with the USA Patriot Act’s “know your customer” requirement. The Act will require credit unions to verify a member’s identity when opening an account or adding a joint owner.

As with showing identification before a transaction, these precautionary steps are designed to reduce members’ exposure to fraud, identity theft, and, ultimately, terrorist acts.

We appreciate your cooperation and understanding in this matter of national concern. The Credit Union will do what is required by law and reason to protect your
accounts.


Youth Count at North Penn
Federal Credit Union


Struggling for economic prosperity is difficult for everyone. It’s especially hard for young people who’ve never learned how to plan to achieve financial security. What we need today, confirmed by poor financial literacy test scores from across the country, is leadership to help raise the awareness of financial issues for young people.

The staff and members of the Credit Union are ideally positioned to respond because we believe in the power of education, put to practical use, to improve the lives of our members and their families.

Our tradition of service and philosophy of self-help make our Credit Union and all credit unions a natural source of leadership in the fight against financial ignorance.

Join us this year, as we celebrate National Credit Union Youth Week from April 13-19. What a great time to talk to your family about spending and saving, whether for a new bike or college!

For more information, come in or call the credit union today!



Penn Color, Inc.
Joins Our Credit Union Family


NPFCU would like to extend a special welcome to the employees of Penn Color, Inc. of Doylestown and Hatfield, PA into our field of membership. We extend a friendly welcome to these new Credit Union members and invite them to use the many services available to
them.



Annual Meeting


The North Penn Federal Credit Union’s annual meeting will be held on Tuesday, April 22, 2003 at 12:30 p.m. in the Lunch Room at the Credit Union office. Please join us and vote for your credit union leadership.

Holiday Closings:

GOOD FRIDAY
- Friday, April 18, 2003

MEMORIAL DAY
- Monday, May 26, 2003

INDEPENDENCE DAY - Friday, July 4, 2003

For additional online newsletters see below:

Fall 2001
Summer 2001
Summer 2000
Fall 2000
Winter 2000/2001
Spring 2001
Winter 2001-2

Spring 2002
Summer 2002

Fall 2002
Winter 2003

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