Your finance questions, answered

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From budgeting to saving for retirement or applying for a home loan, there’s a lot of knowledge that goes into being financially fit. Today, we’re breaking down five common financial questions.

What are the best programs or apps to manage money?

Last month, we asked what questions about personal finances you wanted answered. This was the most submitted question, so we turned to the experts at PEFCU. Here’s what they recommend:

YNAB (You Need a Budget): A personal budgeting program based on the envelope method 
PocketGuard: Categorizes and organizes expenses, monthly bills, and subscriptions into clear tabs + graphs
GoodBudget: A virtual budget program that keeps users on track with the envelope budgeting method

What is the difference between pre-approval and pre-qualification?

When a potential homebuyer is pre-approved, a lender has collected, verified + presented the information needed for underwriting and approval. The property that will be purchased is the only missing piece of the puzzle.  

A pre-qualification is based on undocumented information provided to the lender to determine preliminary mortgage payments and possible loan programs the homebuyer may qualify for.

How much can you contribute to an IRA? 

Taxpayers under 50 can contribute up to $6,000 to traditional and Roth IRAs
Those 50 and older can make an additional $1,000 “catch-up contribution.” 

I’m near my retirement. Can PEFCU help?

Yes. PEFCU can arrange a direct rollover of an ESOT plan, 401-K, or any IRS-qualified retirement plan. Interested PEFCU members can reach out to the Member Contact Center or head to their nearest branch location.

What exactly are closing costs?

When buying a home, closing costs can include items like:

Appraisal fees
Credit reports
Surveys
Title insurance fees
Settlement fees
Recording fees
Prepaid interest 
Costs for homeowner’s or hazard insurance

These items are usually different for each member due to differences in the mortgage term, property location + other factors. PEFCU will share a detailed Loan Estimate for the closing costs involved after a loan application is received.*

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