KeyPoint Credit Union Blog


From CEO, Brad Canfield
  • Undocumented Income and Mortgages for the Self-Employed

    Apr 30, 2013
    In the aftermath of the burst real estate bubble, lending standards have become much stricter. No longer can you qualify for a $500,000 loan with no documentation of your income; it’s simply too risky for lenders.
    That can create challenges for software engineers and other professionals who may be self-employed in Silicon Valley. If you’re looking to buy real estate in Silicon Valley in the near future, you’ll need to keep a few things in mind as you create an American-style life here.

    Tax Deductions vs. Stated Income

    Self-employed software engineers traditionally take advantage of as many tax deductions as possible to decrease their income tax liabilities, but that’s the precise strategy that will damage their ability to qualify for a mortgage. Tax deductions taken by self-employed workers can drop their official income level below the threshold that credit unions and other lenders want to see from potential borrowers.
    As suggested by FOXBusiness columnist Donna Fuscaldo, self-employed homebuyers should consult with their accountant to figure out the appropriate amount of tax deductions so they don’t disqualify themselves from a mortgage.

    Two Years Required for Self-Employed Job

    Another obstacle can emerge after software engineers leave a corporate job to start their own Silicon Valley software consulting business but haven’t been on their own for two years. Tighter lending standards mean mortgage underwriters want to see at least two years of self-employment history as part of their analysis of your financial background.
    In general, borrowers encounter more paperwork and documentation requirements today than they did during the housing boom, and the self-employed face even more hurdles. Forbes provides another handy set of tips for qualifying for a mortgage when you’re self-employed.

    At KeyPoint, we’re eager to work with Silicon Valley software engineers and everyone to meet their mortgage needs with a variety of great products. Contact us today to discuss your options. 
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  • Inactive Credit Cards Might Drag Down Your Score

    Apr 23, 2013
    Figuring out what impacts your credit score and why it moves up and down can be confusing, but it’s an important concept to understand. If you’re a software engineer new to Silicon Valley or new to the country and you’re thinking of purchasing Silicon Valley real estate in the near future, you need to know how your credit score will affect that transaction. A lower credit score can saddle you with a higher interest rate from your mortgage lender and force you to pay tens of thousands of dollars more in interest charges over the life of the mortgage.
    As I’ve discussed this month, there are strategies to establish a credit history and also to repair your credit score if it has taken a hit. People wonder if not using a credit card at all is a good way to improve their score because there’s no way they’ll fall behind on payments or accumulate a crushing debt load.

    Use Your Credit Card Responsibly to Prove You Can

    But inactivity is NOT the answer to improving your score, and inactive cards actually can bring down your credit score. Leslie McFadden at talks about credit card utilization and how it measures your debt-to-credit limit ratio. The lower your ratio, the higher your score. But you need to show that you’re actively keeping your ratio low by using your credit card and paying off balances in full; there’s no way to accurately gauge your ability to use credit responsibly if you don’t actually use your credit card.

    As McFadden notes, “Utilization contributes toward the amounts-owed portion of your FICO score, a scoring model commonly used by lenders. The amounts-owed factor counts for 30 percent of your score.” So as you settle into Silicon Valley and an American-style life, be aware that using credit intelligently will benefit your credit score in the long run.

    The Effect of Inactivity

    So what happens if your credit cards are inactive? Jim Wang at U.S. News & World Report says the research isn’t crystal clear at this point and more research is necessary. But just as we know that canceling a credit card (especially one that you have held for a long time) can hurt your credit score, there are some indications that simply not using a credit card also can negatively impact your score. It’s not necessarily a direct correlation, but some credit card companies will cancel your credit card if they deem it inactive because they’re not making money off you in the form of interest payments or interchange fees they charge merchants when you use your card. And a credit card cancelled by the company and not by you could be a significant black mark against you.
    As a software engineer new to the country and establishing your life in Silicon Valley, remember you can turn to KeyPoint Credit Union for credit cards that offer low rates and valuable features.

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  • Here’s How to Improve a Sinking Credit Score

    Apr 16, 2013
    We’ve probably all been there before. You’re late paying a bill and your creditor tacks on a fee. As annoying as it is to pay extra fees, you’re also paying extra because your credit score is diminished by late payments. In the long run, a lower credit score can mean paying higher interest rates on loans and that costs you more money.
    And if you’re a software engineer who’s new to Silicon Valley and the country, moving your family half-way across the world might mean that some of your payment obligations slipped through the cracks. When you’re researching opportunity to purchase Silicon Valley real estate, you don’t want your credit score to hamper your ability to get a good deal.
    So what type of credit score needs to be repaired? If your FICO score is below 620, it’s difficult to get credit cards and loans with reasonable rates, says Liz Weston at MSN Money. And if your score is below 760, that means you have room for improvement. But keep in mind that repairing your credit takes time. If you hear advertisements on TV and radio about companies promising to immediately erase your bad credit, beware a scam in the works, according to attorneys at the Federal Trade Commission.

    Scour Your Credit Report for Incorrect Information

    After you find out your credit score, get a copy of your credit report and make sure that all of the information is correct. Even seemingly minor mistakes, such as your name being misspelled, can affect your credit score. You cannot erase legitimate bad marks in your payment history, but if you find mistakes and wrong information, you have every right to contact the creditor to resolve the issue. The Federal Trade Commission offers a helpful credit repair guide, which includes a sample letter for disputing information in your file.

    Take a Disciplined Approach to Debt Management

    Once you’ve reconciled your credit report, you’ll need to invest time and discipline into repairing your credit. If you’re a serial late payer, set up payment reminders so that you don’t miss any more due dates on your bills. The key to repairing your credit is to steadily pay down your debt on credit cards and loans. Reducing your debt through timely payments is a key factor in improving your credit score. Responsibly managing credit doesn’t mean asking creditors to lower your credit availability, though; in fact, that can lower your credit score because it will reduce the margin between your debt and your debt ceiling. If you have more padding between those two elements, your credit score will benefit. FICO provides additional tips to repair credit and improve your FICO credit score.

    A message to all software engineers here in Silicon Valley and fellow residents, you can take control of your credit score by researching your file and disputing incorrect information. After that, a steady approach to managing your credit and debt load is required. And KeyPoint provides credit cards and loan products that can help you improve your credit score. Contact us today to learn more.

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  • From the East Bay to the Peninsula, What’s Your Commute Like?

    Apr 09, 2013
    If you’re an engineer commuting from the East Bay to the Peninsula, how do you spend that time in traffic?
    With so many responsibilities and a busy schedule, I’m always looking for opportunities to find some extra time. Often, it’s when I’m alone in a car. I’ll catch up on an audiobook or listen to a favorite radio show or just sit in silence with my thoughts. I can only imagine what it’s like for an engineer who is new to Silicon Valley or new to the country driving to work every day while thinking about how family members are adjusting to an American-style life.

    A Time to Figure Out Finances, and Other Stuff

    Time is precious, and the older I get the more I try to eliminate things in my life that require more time than they’re worth. Sometimes when I’m driving to and from work I’ll listen to National Public Radio and a financial story on “Marketplace” or “Morning Edition” will spark a thought in my head about personal finance or money management. When the story ends, I’ll often just turn off the radio (I can always access archived stories from that show online) and devote some time to thinking about the issue or trying to solve a challenge. To me, that’s a worthwhile use of personal time before I’m pulled in different directions at work or at home.
    You can’t always resolve everything in your car. If you’re shopping for a new Peninsula home or contemplating something similarly complex, you’ll likely have to revisit the topic later in the day or evening. But taking time to work through some thoughts and ideas is a real benefit of that daily drive.  

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  • How to Establish and Improve Your Credit Score

    Apr 02, 2013
    Your credit score will go a long way toward determining how much money you can borrow and the interest rates you will receive, so understanding how to establish and improve your credit score is vital to your financial situation.
    Maybe you’re an engineer new to the country or the United States with plans to purchase a home in Milpitas, Santa Clara, Union City or San Mateo. A good credit score will help you secure the American-style life in the Silicon Valley that you seek. Or maybe you have younger family members who do not have a lengthy credit history and you want to help them establish one.
    If you want to receive a free copy of your credit report or want to know about finding your credit score, check out the Consumer Financial Protection Bureau.

    Ways to Improve or Establish Your Credit

    KeyPoint Credit Union offers several products designed to meet your current financial needs while improving your credit score through responsible money management. A great way to establish and build up your credit score is through one of our secured loans, which allow you to borrow money using your certificates of deposit, savings account or personal stocks as collateral. Plus, you can earn interest with this loan.
    If you have encountered financial difficulties recently, our NewPoint partial secured loans and lines of credit might be the perfect financial fit for you. And, of course, if you’re looking for a credit card, KeyPoint Credit Union offers two different Visa® cards with low introductory Annual Percentage Rates (APR) to help you establish or repair your credit score.
    Getting a credit card from your credit union is one of the steps Investopedia suggests taking to establish your credit history. Typically, you want to get your credit score up in to the 700s, and money guru Liz Weston at MSN Money offers some valuable pointers on how to get there. And if you have a teenager in your home or someone with a short credit history, offers 10 useful tips for building good credit.
    If you have any questions about your credit score or how KeyPoint Credit Union can help you, please reach out to us! We’re happy to assist.
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  • How Would You Rate Your Level of Financial Literacy?

    Mar 26, 2013
    As a Silicon Valley software engineer, you know every angle of designing, developing and testing sophisticated software and systems. But how much do you know about managing your wealth?
    Building an American-style life in the Silicon Valley requires smart financial decisions that prepare you for retirement while ensuring you have the money today to pay for things like your southern Peninsula home. This can be as simple as understanding how to create and abide by a budget or it could mean grasping the complexities investing in stocks and bonds. Are you saving enough for retirement or for your children’s college education? Taking advantage of all possible tax deductions?

    Time To Learn More About Money Management

    April ushers in Financial Literacy Month, as designated by the U.S. Senate in 2003, so get a head start on educating yourself. There are multiple online resources to help you gauge how much you already know and show you the types of financial concepts you should be thinking about as you build your portfolio and manage your money.
    The National Financial Educators Council offers a comprehensive financial literacy test that requires a quick log-in process. Plus, you can access scads of financial information tailored to different age groups. Over at Kiplinger, you can take a personal finance quiz and also run through a quiz of 12 “money rules of thumb,” plus other valuable insight about money management. And if you’re ready to dig in and learn more about investment strategies, the Wall Street Journal offers up a list of the best available books and provides links to several online guides to investment and wealth management.

    And don’t forget, if you’re a software engineer new to the Silicon Valley, turn to KeyPoint Credit Union to assist you with all facets of your short-term and long-term money management needs.

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  • Consider IRAs to Plan Your Financial Future

    Mar 18, 2013
    Tax season is in full swing and that means conversations with an accountant or financial advisor about limiting your tax liabilities next year, taking a look at your financial plan, and doing all you can to improve your financial situation.
    An Individual Retirement Account (IRA) can play an important role, whether it’s structured to serve as your sole source of retirement income or to augment an employer-sponsored 401(k). If you’re an H-1B engineer in the Silicon Valley, you can use an IRA to balance your company stock options and additional foreign investments or savings accounts. As an engineer who’s new to the country, an IRA is part of an effective strategy to achieve an American lifestyle in the Silicon Valley.
    Before we get too deep into this, I have to tell you that this information shouldn’t be taken as tax advice. Your tax advisor can help with any specific questions.

    Retirement Planning Through KeyPoint Credit Union

    Are you looking for a trustworthy financial advisor in the Silicon Valley? Well you’re in luck. One of KeyPoint Credit Union’s investment representatives is ready to meet with you for a complimentary, no-obligation discussion about different IRA choices that are available to you. 

    The money in your IRA can be invested in a variety of stocks, bonds and other holdings, all of which can be adjusted depending on how much risk you’re willing to take and the financial goals you’re trying to reach. Keep in mind that IRAs aren’t federally insured and aren’t guaranteed by KeyPoint Credit Union or any other third party. There’s risk involved with the investment strategy, which emphasizes the importance of seeking assistance from our investment representatives if you unfamiliar with IRAs.

    Different IRAs for Different Financial Needs

    If you want to research IRA options before you come in to see us, Money magazine provides a good explanation of several types of IRAs. The most popular are Roth IRAs and Traditional IRAs, both of which have discrete tax advantages and specific rules about withdrawing money. Which one is better? It all depends on your personal finance and employment situations now and in the future.
    People often add IRAs as a valuable component to their overall portfolio, which can include your Silicon Valley/Peninsula Valley real estate, savings accounts, life insurance, 401(k) and other assets. Contact us today and let’s set up a time to discuss IRAs and the benefits they hold for you and your family. We look forward to seeing you!
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  • Our New All In One™ Loan Helps You Save Money and Pay Off Your Mortgage Sooner

    Mar 11, 2013

    As you pay your mortgage every month, do you ever wonder how you’ll feel when you no longer owe money on your home? Maybe you think about ways you’d otherwise spend or invest that money on your retirement, your hobbies, education or vacations. Maybe you’d feel the freedom to finally do something different with your career because you don’t feel obligated to stay at your current job just to pay for your home.

    Imagine, a huge financial burden would be lifted. Finally.

    We at KeyPoint Credit Union are tremendously excited to introduce a loan product for qualified homeowners that will help you pay off your mortgage sooner so you can enjoy more financial freedom! The All In One™ loan is an innovative, flexible loan that replaces your traditional mortgage with a combination home equity line of credit and checking account so you can make your money work harder for you.

    Learn How the Math Works

    With the All In One™ loan, every dollar you deposit cuts time and money off of your mortgage balance, saving you thousands of dollars in interest payments over the life of your mortgage. Plus, you can access your money at any time and tap into your home’s equity without refinancing.

    All of this is possible because the All In One™ loan makes a simple adjustment to the way interest is calculated. Noted economist and author Ben Stein says the All In One™ loan is “the greatest invention in personal finance in my lifetime.” 

    Silicon Valley Mortgage Options

    We want to tell you more about the All In One™ loan so you can take greater control of your personal finances. Sign up today for our special presentation this Thursday, March 14th and we’ll show you how this loan works to save you a lot of time and money.

    Join us for the All In One™ loan presentation

    Date: Thursday, March 14
    : 6 to 8 p.m.
    : KeyPoint Community Learning Center, 2805 Bowers Ave., Santa Clara, CA  95051
    : (408) 731-4257 (Refreshments will be provided.)

    And because we’re so excited about the All In One™ loan, we’ll credit the cost of your home’s appraisal if you apply for the loan by March 31. Hope to see you soon!

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  • Our Random Acts of Kindness Brightened the Holidays

    Feb 01, 2013
    We hope all of you enjoyed the holiday season and found plenty of comfort and joy in your personal traditions. KeyPoint CU continued its own holiday traditions with our Random Acts of Kindness campaign that was created to reflect our mission to improve the lives of KeyPoint members and people in our surrounding communities.
    This past year, KeyPoint executives and volunteers made daily surprise visits to organizations in the area to deliver all types of contributions. We made multiple stop over the course of five days to benefit 12 different non-profit organizations. Our holiday schedule included delivering supplies to the Sunnyvale National Guard Armory, which is serving as a homeless shelter; donating billiards equipment to the Sunnyvale Senior Center; visiting the Heart of the Valley, Services for Seniors in Santa Clara; serving lunch and donating cake and ice cream to the Milpitas Senior Center; donating coats and backpacks to the Bill Wilson Center in Santa Clara; delivering toys to the Milpitas Firefighters Toy Drive; providing supplies for high-risk youth at the Alum Rock Counseling Center in San Jose; delivering backpacks to HOPE Services in San Jose, which helps individuals with developmental disabilities; providing groceries to Martha’s Kitchen, a 30-year-old soup kitchen in San Jose; donating supplies to Family Supportive Housing in San Jose; participating in a pizza-making event with 16 orphans at Pizza Party in Santa Clara; and delivering cake and reusable shopping bags to seniors at Berryessa Community Center in San Jose during their monthly senior luncheon.
    We love participating in these community events because they connect us to our neighbors and allow us to spread holiday joy to appreciative, deserving people. And giving back reaffirms our reason for existing as a credit union—community involvement. We all have challenging days at work, but when we can break away and brighten someone’s day with simple gestures, we are energized with a renewed focus on serving our members.
    Thanks to everyone who helped us with our Random Acts of Kindness. Please visit our Facebook page to view photos, and as always, let us know if you have ideas for other non-profit organizations to visit next year!

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  • Our Account Opening System Makes It Easy To Join Us

    Jan 11, 2013

    If you’re not yet a KeyPoint Credit Union member, you’re eligible to join us if you live, work, worship or attend schools in San Jose, Santa Clara, Sunnyvale, Cupertino or other cities and towns in these California counties.

    Our account opening system will quickly guide you through the process of becoming a member so you can enjoy the first-class experience of KeyPoint Credit Union membership. We want to make it as easy as possible for you to bank with us, and our e-Service enhancements provide the quality products and service you deserve.

    It’s always our pleasure to serve you and we look forward to building our relationship with you in 2013. 

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