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Most consumers are familiar with mortgage loan refinancing. However, members often tell us they didn’t know they could refinance their auto loan.

Vehicle loans are typically established with 4-6 year terms.  During the loan period, economic and financial situations can change.  You may be able to proactively respond to these changes with an auto loan refinance.  Improvements in market rates, your credit score or your income can add up to big savings.

Rates Change
Annual percentage rates periodically change.  In a rate environment like we are in today, rates have been declining.  If you purchased a car more than a year ago, it is possible that your current interest rate is higher than what is being offered today.  Refinancing could lower your monthly payment while keeping the same term.  Or, refinancing to a lower interest rate and keeping the monthly payment the same could reduce the amount of time it takes to pay off the loan.

Credit Improves
Multiple factors are used in calculating credit scores, including payment history.  After a year or more of timely repayments, a credit score may improve.  A higher credit score may qualify for a lower rate.  Lower rates not only reduce the monthly payment, they also reduce the amount of interest paid over the life of the loan.

Income Changes
If your income has increased, you may want to consider refinancing to a lower interest rate and shortening your term.  Both actions will save finance charges and increase your equity in your vehicle.

Conversely, if your income has decreased and overextended your monthly budget, you may prefer to extend the loan term and lower your payment to help pay other expenses.

To find out if an auto loan refinance is right for you, try our online Loan Saver calculator.  Or, if you prefer the personal touch, with a phone call and a few minutes, we can determine if we can save you money.

For a limited time, we have an unbeatable refinance offer that includes up to $300 cash back, no payments for 90 days, and a rate as low as 2.24% APR.  Find out more.

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A $200 fee applies to reduce the rate of an existing PSCU loan.

Sactown Credit Union 10-Mile Run benefitting Children's Miracle Network Hospitals

At Pacific Service Credit Union, we pride ourselves on being an active part of our community. We’re already hard at work in 2013 contributing in the communities that we serve. Here’s a little more about our funding in the first three months of the year.

Kids Day 2013 Sponsorship
Once again, we are a proud sponsor of Kids Day 2013 benefitting The Children’s Hospital of Central California, which provides medical treatment to over 100,000 children.

YMCA of San Francisco
We are supporting the Presidio Community YMCA’s afterschool learning program at Sutro Elementary School. The program provides free, high quality afterschool services to youth in San Francisco’s Inner Richmond neighborhood.

Diabetic Youth Foundation
Our donations support the DYF with their mission is to improve the quality of life for children, teens and families affected by diabetes by providing education and recreation to foster personal growth, knowledge and independence.

San Francisco Deputy Sheriffs’ Foundation (SFDSF)
This year’s funding will provide back-to-school supplies for 300 low-income, at-risk children. The event gives private access to a local Target store for the children and deputy sheriff officers to shop. Merchandise is specially priced to maximize what each child can purchase with their allocation.

CU4Kids
Credit Unions for Kids is a nonprofit collaboration of credit unions and business partners from across the country benefitting Children’s Miracle Network Hospitals. Funding supports treatment of children, regardless of their ability to pay.

Children’s Miracle Day Fundraiser
We were one of many credit unions supporting the Credit Union SacTown Ten-Mile Race benefitting Children’s Miracle Network Hospitals, including hospitals in Oakland and Fresno.

Fresno Police and Neighborhood Watch program
Our funding supports community block parties and education for children. Children participate in crime prevention and games that reinforce positive living, improve relations with law enforcement officers and encourage community spirit.

Fresno Police Activities League (PAL) programs
Our involvement will support programs for low-income, at-risk residents of the community, including bicycle repair, bicycle giveaways and a mentoring pen pal program.

American Red Cross Save-a-Life Days (Formerly CPR Saturdays)
For the 11th year, our funding will sponsor a series of regional training events that deliver lifesaving skills to vulnerable populations in underserved communities at no cost.

Food Bank of Contra Costa and Solano – Admiral’s Garden event sponsorship
Proceeds from the event help the Food Bank supply food to needy families during the summer months when donations are historically low. We have supported this event since 2004.

If you are involved in a 501(c)(3) non-profit organization that you feel may fit our mission, we would be happy to consider them for a charitable contribution. Simply email me and include your organization’s name, email address and phone number.

by Kristin P., Business Development

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It’s in the news.  Mortgage rates are hitting record lows – again. If you fall into any of the categories below, it may be time to consider your refinancing options.

You have a variable- or adjustable-rate mortgage (ARM) Loan.
If you’re currently in an adjustable-rate loan and you have at least 80% equity in your home, this is the time for you to refinance.  Even if refinancing won’t lower your payment, fixing your interest rate and your payment could still save you a lot money in the long run.

Your rate is a half a percentage point above today’s rate.
As a rule of thumb, if your current loan is more than half a percentage point higher than current mortgage rates, you may save money by refinancing if you plan to stay in your home. Be sure to ask about closing costs and any points or fees associated with the loan.  Those costs could reduce or eliminate your potential savings.

You have a balloon payment.
A loan with a balloon payment has a remaining balance that must be paid off or refinanced after your term is completed.  For example, your payment is based on a 30-year amortization term; however, the loan itself is only for a term of 15 years.  If you have a loan with a balloon payment, consider refinancing to a traditional fixed-term loan.  It may not necessarily lower your monthly payment, but it will remove the balloon payment and help you lock in today’s low rates.

You have equity.
Home values are improving in most areas.  People that couldn’t refinance even a year ago are finding that they can now.  If you have been paying down your mortgage loan for some time and think you may now have at least 80% equity in your home, it’s worth the effort to lower your mortgage interest rate.  Your lender should be able to quickly assess your home’s market value to determine if you will be eligible to refinance; however, ultimately, a professional appraiser will be required in most cases to complete loan processing and confirm your eligibility.  Depending on your loan type, your lender’s requirements, and your approximate loan-to-value ratio, you may have to pay out of pocket for an appraisal.  An appraisal typically costs $300 to $500.

Call your mortgage lender as a starting point, or better yet, a real estate specialist at Pacific Service CU.  We’re happy to help.

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by Hemlata, AVP, Real Estate

Current law allows consumers one free credit report each year.  We encourage members, like you, to review your credit report annually.  When accessing your report, however, you may find it complicated and not easily understandable.  Here’s what you should look for and what it means to your credit.

Accuracy
Your credit report can help you gauge your financial picture from a lender’s perspective.  However, more importantly, you should review the entire report for general accuracy.  If you see any accounts that you didn’t open or any errors with existing accounts, you should contact the credit bureau to initiate the process to correct them.

Inquiries
Your credit report will show who has been accessing your credit report.  These inquiries are categorized as “soft” or “hard.”  Soft inquiries are when someone reviews your credit, but hasn’t asked for credit.  For example, it’s considered a soft inquiry when you review your credit report annually or a lender receives a change in your credit status in relation to a credit card account.  Soft inquiries do not affect your credit score.

Hard inquiries occur when a business has accessed your credit report with the intent to offer credit.  For example, you’ll receive a hard inquiry on your report when you apply for a credit card or auto loan.  Infrequent hard inquiries don’t normally affect your credit score that much.  However, frequent hard inquiries indicate an increasing desire for credit and can adversely affect your credit score.  If you see any hard inquiries that you don’t recognize, it may be an indicator that someone is trying to use your credit score or is committing identity theft.  In that event, report the inquiry to the credit bureau.

Late Payments
Delinquent payments heavily influence your credit score.  If you see that your bills have been paid 30, 60, 90 or 120 days late, that can be very damaging to your score and your future ability to get a loan.  The greater the payment delinquency, the more it damages your credit score.

Timing also can be a decisive factor with late payments.  For example, how long ago was the late payment?  Was the late payment an exception?  Have late payments been a regular occurrence?  Over time, late payments will become less damaging, providing your recent payment history is consistently satisfactory.

Credit Utilization Ratios and Open Credit Card Accounts
Credit scoring programs also consider your debt-to-credit limit ratio, or utilization of available credit.  This ratio compares your existing balances with your available credit limit.  The ratio demonstrates to lenders whether or not you are living within your means.  Generally a lower ratio has a more beneficial impact on your score.  In addition, an excessive number of credit cards and available credit can lower your score.  Lenders and credit bureaus want to see responsible spending to show that you can have the available credit, but not necessarily use it.

Collection
Accounts that have gone to collection departments or have been written off as a bad debt can stay on your credit report for up to seven years.  Lenders will be more reluctant to give a loan to someone who has caused a loss.

Typically, members are aware of adverse credit experiences on their credit report and many are making efforts to pay the obligation through workout agreements or legal proceedings.  It is not uncommon, though, for consumers  to be unaware of low level or inactive collection activity, for example, a forgotten insurance deductible with an old medical bill.  You can start to remedy this type of situation by contacting the creditor.

It’s also increasingly common to see a collection entry on a debt that is not yours.  Should you encounter that situation, you must contact the credit bureau and have the entry removed from your report.  Unfortunately, identity theft is a growing problem for consumers and makes the need for reviewing your credit report even more important.

Judgments, Liens, Bankruptcies
You’ll find these listings in the public records section of your credit report.  These types of events are extremely damaging to your score and can stay on your credit report for up to 10 years.  For further information, read more in “What is Bankruptcy?”

You can access your credit report here to get started.

If you’re having difficulties repaying a debt or obligation, we recommend speaking to your creditor(s) as soon as possible.

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by Chris, Vice President, Lending

Jenna, Vice President, Operations

Most of our new checking account holders switch to Pacific Service CU because they want to receive good value.  But how do you know you’re getting a good deal?  Here are five fees to consider when assessing a new checking account.

ATM Fees
Typically, banks offer free ATM access to their own ATMs.  However, be sure you look at the out-of-network ATM fees, the charge that results if you use your Bank of America ATM or debit card at a Chase or other bank ATM.  Non-network ATM fees can range between $2 and $5 and can quickly add up over time.

Monthly Fees
You should also make note of monthly maintenance fees and requirements to avoid those fees.  Sometimes the fee can be avoided simply by taking advantage of direct deposit.  Often a minimum balance is required to avoid the fee.  If so, be sure that the minimum is realistic for you.  And finally, some checking account providers require certain activities to avoid the monthly fee; things like number of debit card uses per month or limiting to the number of checks you can write.

Usage Fees
Generally speaking, try to avoid checking accounts that require you to pay to use or access your account.  Look at the fee schedule for charges such as speaking with a phone representative or teller, limits on paper checks written or charging for paper statements.

Non-Sufficient Funds and Overdraft Protection Fees
When there are not enough funds in your checking account to cover a transaction, your financial institution may still pay the transaction using either an elected overdraft protection account or allowing you to temporarily overdraw your account.  These types of services can be very reasonable, but often are very exorbitant.

Overdraft Fees
We encourage our members to designate other credit union accounts to be used as an overdraft protection source in case your checking account becomes overdrawn.  We will automatically transfer funds from the designated overdraft account(s) to help prevent checks from bouncing.  At Pacific Service CU, this is a free service; however, we see these fees as high as $15 or more per transfer at other financial institutions.

Courtesy Pay Fees
Courtesy pay allows you to overdraw your account, up to your courtesy pay limit.  For this service, a courtesy pay fee will apply because the institution is standing in for you.  Our fee is a low $25.  We often see courtesy pay fees at nearly $40 per transaction and some fees increase the more often you use the service.

Foreign Fees
If you regularly travel outside of the country, foreign fees should be a part of your decision-making process.  Outside of the country, consumers typically pay a premium for ATM access, debit and credit card transactions and more.  This can be a real differentiator for some consumers.

We pride ourselves on being a low-fee leader in the financial services marketplace.  Our Fee Schedule is available online or in branch and we encourage you to compare and see how we stack up.  Our low fees and great service are hard to beat!

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