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October 2016 E-Newsletter

4 Tips for First-Time Home Buyers

In many areas of United States, the housing market is still going strong from the active summer months, interest rates are still at historic lows, and real estate prices are competitive. You might be wondering if it's time to take the plunge into homeownership. If you decide that now is the right time for you, here are four tips for first-time home buyers that will help your transition from renter to owner go smoothly:

#1: Do the prep work.
Before you even start looking at listings, you should get your finances in order. The housing market is fiercely competitive, and buyers who have been pre-approved for financing have the edge. First, review your credit score and clear up any errors you find. Then, go to your bank and get pre-approved for the largest mortgage loan you can (many banks allow you to do this online). A free service at most banks, loan pre-approval will boost your credibility with real estate agents and sellers because it shows you're able to get financing and are serious about buying a house. It will also make the process of applying for your mortgage faster, especially if you obtain the loan from the same bank that pre-approved you for credit.

#2: Stick to your budget.
Buying a house is likely to be the largest purchase you ever make, so making and sticking to an accurate, realistic budget is essential. The first step is to look at the amount of cash you have in your checking and/or savings account and determining how much of that you're comfortable parting with as a down payment (keeping some savings in reserve for emergencies, of course!). Next, get as much information about how much the houses you're looking at will cost, being sure to factor in all of the expenses, including closing costs, principal and interest mortgage payments, taxes, insurance, utilities, commuting, etc.

#3: Build a team you trust.
The next key to buying your first house is to assemble a team that you trust. The real estate purchase process is complex, and you need experts on your side who will work with your best interests in mind. Find a real estate agent and a mortgage lender you get along with and trust to give you good advice. Often, if you find one, they'll recommend the other, since professionals in these fields work with one another frequently.

#4: Read before you sign.
Closing on a house can be an emotional, nerve-wracking process, but it is critical that you take the time to understand the document you're signing your name to. Read everything, and if you don't understand something, ask your lender or real estate agent to explain it. Buyers have many different options for mortgages, from the standard fixed-rate 30-year loan to a 10- or 15-year variable rate, and other more complex options. No matter what your financial situation is, the key is to ask as many questions as you need to in order to understand what you're committing to. After all, it's probably the biggest financial commitment you're ever going to make.
Source: WBA Consumer Column E-Newsletter

Q-Tip: But I was Gone for a Minute!

While most attacks are performed remotely (generally via email), having someone with nefarious intentions come to your place of business is still a very real threat.  Research released this week shows just how devastating even a minute alone with a locked computer can be. 

This research details the efforts to create a USB device that steals password hashes from a workstation; which can then be used during an attack.  The attack works on all current, modern versions of Windows, and appears to work on the latest versions of macOS. 
It is worth noting that this is just one flavor of this type of attack.  The options for what can be done are much more varied if someone finds an unlocked, unattended computer (not that any of us have EVER forgotten to lock our computer when we step away for just a minute or two, right?).

What can be done to guard against this?  All visitors should be confirmed with the appropriate people. Visitors should be signed in and escorted everywhere while unauthorized visitors should be politely turned away.  Properly monitoring guests who visit your locations can be an invaluable tool in preventing this type of attack.


How Debit Card Fraud Happens - and How to Avoid It

For many people, debit cards are the perfect plastic. They offer most of the conveniences of credit cards with no risk of accumulating debt.
But like credit cards, debit cards are vulnerable to rip-off artists. And debit card fraud is particularly scary because thieves can withdraw money directly from your checking account.
Here's how debit fraud happens and how to protect yourself.
How identity thieves operate
Debit card fraud can be sophisticated or old-school. Thieves use techniques including:
  • Hacking. When you bank or shop on public Wi-Fi networks, hackers can use keylogging software to capture everything you type, including your name, debit card account number and PIN.
  • Phishing. Be wary of messages soliciting your account information. Emails can look like they're from legitimate sources but actually be from scammers. If you click on an embedded link and enter your personal information, that data can go straight to criminals.
  • Skimming. Identity thieves can retrieve account data from your card's magnetic strip using a device called a skimmer, which they can stash in ATMs and store card readers. They can then use that data to produce counterfeit cards. EMV chip cards, which are replacing magnetic strip cards, can reduce this risk.
  • Spying. Plain old spying is still going strong. Criminals can plant cameras near ATMs or simply look over your shoulder as you take out your card and enter your PIN. They can also pretend to be good Samaritans, offering to help you remove a stuck card from an ATM slot.
Smart ways to protect yourself
Adopt these simple habits to greatly reduce your odds of falling victim to debit card fraud:
  • Be careful online. Shop and bank on secure websites with private Wi-Fi. If you must shop or bank in public, download a virtual private network to protect your privacy.
  • Monitor your accounts. Review your statements and sign up for text or email alerts so you can catch debit card fraud attempts early.
  • Don't ignore data breach notifications. The majority of identity theft victims received warnings that their accounts might have been breached but did nothing. If you get one of these messages, change your PIN and ask your provider to change your debit card number. You can also ask one of the major credit card bureaus to place a fraud alert on your file.
  • Inspect card readers and ATMs. Don't use card slots that look dirty or show evidence of tampering, such as scratches, glue or debris. And steer clear of machines with strange instructions, such as “Enter PIN twice.”
  • Cover your card. When using your debit card or typing your PIN at an ATM, block the view with your other hand. Go to a different location entirely if suspicious people are hanging around the ATM, and if your card gets stuck, notify the financial institution directly rather than accepting “help” from strangers.
Even if you've taken precautions, debit card fraud can still happen. If your card gets hacked, don't panic. Tell your bank or credit union right away so you won't be held responsible for unauthorized charges, and file a complaint with the Federal Trade Commission.

© Copyright 2016 NerdWallet, Inc. All Rights Reserved

Investment Corner: Does Your Portfolio Reflect Your Risk Tolerance?

When it comes to investing, many people associate risk with losing money. But investing entails different types of risk. Understanding each type -- and the potential return associated with your retirement portfolio -- can help you determine whether your investments are appropriate for your situation.

Examining Risk and Return
Stocks historically have exhibited the highest level of market risk -- or the potential that an investment may lose money in the short term. Over long periods of time, however, stocks have outperformed both bonds and cash investments. 1This risk/return tradeoff may influence how you allocate your investments. For instance, consider weighting assets that you intend to keep invested for 10 years or more toward stock investments.

Bonds carry their own risks -- credit risk, or the possibility that a bond issuer could default on interest and principal payments; and interest rate risk -- the chance that rising interest rates could cause a bond's price to fall. Ascending interest rates historically have influenced the prices of bonds more directly than the prices of stocks.1When short-term rates are on the rise, investors may sell older bonds that pay a lower rate of interest -- causing their prices to fall -- in favor of newly issued bonds that pay higher interest rates. On the plus side, bonds historically have exhibited less short-term volatility than stocks, although past performance is no guarantee of future results.

It's also important to look at cash investments, such as 3-month Treasury bills, from a vantage point of risk and return.1Although Treasury bills typically experience a low level of volatility, they may be subject to inflation risk -- or the possibility that their returns may not keep pace with the rising cost of goods and services. For this reason, you may want to use cash investments for short-term situations when you expect to access your money within 12 months or less.

Putting Risk in Perspective
Because all investments entail risk, you may want to review your mix of stocks, bonds, and cash investments with an eye toward creating a risk/return profile that is appropriate for your situation. Owning different types of assets may increase your chances of experiencing the benefits associated with each, while mitigating the corresponding risk. Your retirement portfolio won't be risk free, but you will have the confidence of knowing that you've done what you can to manage a potential downside.

This article offers only an outline; it is not a definitive guide to all possible consequences and implications of any specific investment strategy. For this reason, be sure to seek advice from knowledgeable financial professionals.

1Source: Wealth Management Systems Inc. For the 30-year period ended December 31, 2013. Stocks are represented by the Standard & Poor's Composite Index of 500 Stocks, an unmanaged index that is generally considered representative of the U.S. stock market. Investing in stocks involves risks, including loss of principal. Bonds are represented by the Barclays U.S. Aggregate Bond index. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and are subject to availability and change in price. Cash is represented by the Barclays 3-Month Treasury Bills index. It is not possible to invest directly in an index. Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest, and, if held to maturity, offer a fixed rate of return and fixed principal value. Past performance is not a guarantee of future performance.

Required Attribution
Because of the possibility of human or mechanical error by Wealth Management Systems Inc. or its sources, neither Wealth Management Systems Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall Wealth Management Systems Inc. be liable for any indirect, special or consequential damages in connection with subscriber's or others' use of the content.

© 2016 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.

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