Thinking about Mortgage? Know Your Rights

Know your mortgage rights.A mortgage is likely the largest loan you will take out over the course of your life, and before doing so, you should fully understand your legal rights in the process. By becoming familiar with your legal protection, you can best avoid fraudulent loans and making costly mistakes.

  1. You have the right to actively seek out the best loan for you and your family. Consult different lenders and brokers to examine varying mortgage costs and charges.
  2. You should always be informed from other parties about your total costs; these range from the mortgage’s interest rate, to other points and fees that will be assessed. In addition, you are allowed to ask to see the Good Faith Estimate of these charges. Anyone who is trying to pull the wool over your eyes on costs is denying you your borrower’s rights.
  3. If there are nonrefundable fees, you should be the first to know. Lenders are obligated to be transparent about all fees; brokers are regulated to explain to you every service they are providing, as well as how much they are getting paid for managing your account. If these firms ever fail to make their fees evident, they are denying you your rights and trying to confuse you.
  4. You always have the right to know why an application for a loan was not accepted. Under no circumstances are any lenders allowed to discriminate to whom they lend based on race, color, religion, national origin, marital status, age, or whether any amount of income is from public assistance.

Be sure to remember that you have plenty of rights you can exercise when buying a mortgage. To learn more about these legal rights visit the Housing and Urban Development (HUD) website.

Come See Us December 6th During Customer Appreciation Day

Our customers are the best!
There are plenty of places where you could do your banking. We’d like to say “Thanks” for choosing Peoples Bank. And this year (our 101st!), we’re taking Friday, December 6th to show you how much we appreciate you!

We’ll have refreshments all day, in every office. Please come by and let us thank you in person!

The Impact of Inflation – Installment 4

The Impact of Inflation - Installment 4 article

Inflation 101 – What to know, what to do

Inflation is perhaps the single-biggest influence on your economic situation. It is not properly understood by many, nor do many people make good decisions in light of it.

Peoples Bank is making the effort to address what may be an important gap in the financial efforts of its customers and others with 4 blog posts. We hope this information is more than instructive, we hope that it is meaningful, helpful. Feel free to write us with your comments, and don’t hesitate to share the link with others.

The first installment defined the term and describe it in real-world terms while the second one described what you can do about it (personally) and what tools are available to deal with bonds. The final post in the series is about how your retirement can be improved by dealing with it.

Inflation Doesn’t Retire When You Do

The need to outpace inflation doesn’t end at retirement; in fact, it becomes even more important. If you’re living on a fixed income, you need to make sure your investing strategy takes inflation into account. Otherwise, you may have less buying power in the later years of your retirement because your income doesn’t stretch as far.

Your savings may need to last longer than you think

Gains in life expectancy have been dramatic. According to the National Center for Health Statistics, people today can expect to live more than 30 years longer than they did a century ago. Individuals who reached age 65 in 1950 could expect to live an average of 14 years more, to age 79; now a 65-year-old might expect to live for roughly an additional 19 years. Assuming inflation continues to increase over that time, the income you’ll need will continue to grow each year. That means you’ll need to think carefully about how to structure your portfolio to provide an appropriate withdrawal rate, especially in the early years of retirement.

Adjusting withdrawals for inflation

Inflation - added cost chartInflation is the reason that the rate at which you take money out of your portfolio is so important. A simple example illustrates the problem. If a $1 million portfolio is invested in an account that yields 5%, it provides $50,000 of annual income. But if annual inflation runs at a 3% rate, then more income – $51,500 – would be needed the next year to preserve purchasing power. Since the account provides only $50,000 of income, $1,500 must also be withdrawn from the principal to meet retirement expenses. That principal reduction, in turn, reduces the portfolio’s ability to produce income the following year. In a straight linear model, the principal reductions accelerate, ultimately resulting in a zero portfolio balance after 25 to 27 years, depending on the timing of the withdrawals.

A seminal study on withdrawal rates for tax-deferred retirement accounts (William P. Bengen, “Determining Withdrawal Rates Using Historical Data,” Journal of Financial Planning, October 1994), using balanced portfolios of large-cap equities and bonds, found that a withdrawal rate of a bit over 4% would provide inflation-adjusted income (over historical scenarios) for at least 30 years. More recently, Bengen showed that it is possible to set a higher initial withdrawal rate (closer to 5%) during early active retirement years if withdrawals in later retirement years grow more slowly than inflation.

Invest some money for growth

Some retirees put all their investments into bonds when they retire, only to find that doing so doesn’t account for the impact of inflation. If you’re fairly certain that your planned withdrawal rate will leave you with a comfortable financial cushion and it’s unlikely you’ll spend down your entire nest egg in retirement, congratulations! However, if you want to try to help your income – no matter how large or small – at least keep up with inflation, consider including a growth component in your portfolio.

Installment 3: Inflation and Bonds: The Ups and Downs.
Check out the whole series

Contact our Peoples Investment Services, Inc. representative at 828-464-5620 or 

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.

Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC, an independent broker/dealer, and are not insured by FDIC, NCUA or any other government agency, are not deposits or obligations of the financial institution, are not guaranteed by the financial institution, and are subject to risks, including the possible loss of principal.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013

If you’re looking for a privately-funded, well-rated charity, look no further

If you’re looking for a privately-funded, well-rated charity, look no furtherMost of you who read this blog are in position to help others in need, and to your credit, you want to do so. The really important question is not why, or how much, but who? This second blog about charitable giving, takes up this issue.

You’ve probably heard the stories about, or perhaps even experienced, charities who turned out to be weakly ineffective, or worse, fraudulent. The internet contains hundreds of such tragic stories.

Charity Navigator makes extensive effort to document charitable organizations that are worthy of the name, and ranks them by years of service, salary of the CEO, and more. Their website, presents a comprehensive list of Top 10 and we recommend as a place to start if you’re looking to support a cause that gives positive signs of effectiveness and transparency. The lists include those charities that are expanding in a hurry, are consistent under-performers, and those that are in deep financial trouble.

One list that caught our eye this year was 10 Highly Rated Charities Relying on Private Contributions. You may no longer be surprised to learn that many of the more popular charities rely on membership fees and government contracts and subsidies. This list presents those charities that draw revenue solely from direct and indirect public support. Thus, greater than 95% of their total revenue comes from private contributions, which as the web site states, “makes the efficiency of their fundraising operations all the more impressive.” We notice that the Cure Alzheimer’s Fund makes this impressive list.

Our communities are founded on group support of individual needs. We urge you to carefully evaluate a charity to support what you find important.

Read the first charitable giving blog Six Questions To Ask Charities Before Donating.