5 Reasons It’s a Better Time Than You Think to Buy a Home

Home prices and interest rates are bound to go down if I wait, right?

It’s the question most first-time buyers are asking right now—and understandably so. Perhaps unsurprisingly, the answer is anything but straightforward. The question can be partially answered by this stunning statistic: It’s estimated that Oregon is more than 100,000 housing units short of what is needed. For decades, Oregon has not built enough housing units to keep up with population growth, and it could take decades to catch up. Because of this, home prices aren’t likely to plummet anytime soon.

Supply and demand is just one—albeit critical—component of the real estate market. It also helps make one thing abundantly clear: For those looking to purchase a home, waiting to time the market leads to missed opportunities. If you’re considering becoming a homeowner, make sure you’re asking yourself the right questions to determine if it’s the right time for you, then read on to see why now is a better time than you might think to buy a home.

  • Do I plan to stay in this house for at least 3–5 years?
  • Would a mortgage payment be affordable? (Contact SELCO to get a payment estimate.)
  • Can I afford future maintenance?
  • How much do I have saved to dedicate to buying a home?

Purchasing real estate has always been considered a solid investment,” said Chris Erickson, Mortgage Loan Officer at SELCO. “So the real question is: Is it the right time for you to buy.”

Mortgage rates are still historically low

No one can say mortgage rates aren’t higher than they’ve been the past few years. But those bargain-basement rates were subsidized by the government to help Americans push through the negative economic effects of the pandemic. The rates you see today in the 5% and 6% range are actually toward the low end of the spectrum. Historically, rates have spent more time above 7% than below 5%; rates have been below 4% only for a short time.

And what if rates do go down? Remember that you can always refinance. This is where your Mortgage Loan Officer at SELCO is your strongest ally. “We watch rates all day, every day,” said Jay Bennett, Mortgage Loan Officer at SELCO. “We pride ourselves on how vigilant we are about capitalizing on opportunities to help you achieve your long-term financial goals.”

Timing the market is nearly impossible

Still regretting not investing in Amazon stock in the ’90s? Or that you didn’t wait another year or two to sell your house? It’s impractical to try to predict when markets will be hot or cold.

An added consideration borne out time and again: When rates have gone down, it’s been met with increased demand, meaning more buyers are competing for the same homes, causing listing prices to escalate again.

Real estate is foundational to net worth

Owning a home is a major component of building financial security. Here’s what we mean:

  • Equity growth. As long as you regularly maintain your home, you can count on your property value to appreciate. Even at normal appreciation levels of 3.5%–3.8%, in just five years you could expect a $400,000 home to be worth nearly $480,000—and you’ll have shaved five years off your mortgage balance to boot.
  • Unlike rent, your payments stay the same. By buying a home and locking into a rate now, your monthly principal and interest payment will remain the same over the life of your loan—even as your home’s value grows. (Unless you decide to refinance to lower your payments further.)
  • Tax deductions or savings. Unlike renters, homeowners can be eligible to deduct mortgage interest and other expenses from their taxable income each year. These benefits can add up to thousands of dollars when it comes time to file your taxes. It is recommended that you speak with a tax professional to ensure you’re cashing in on all the tax deductions available to you.

“A huge benefit of homeownership is ‘paying yourself,’ ” said Mike Lavender, SELCO’s Mortgage Director. “Each month, you’re putting money into what I like to call a ‘home savings account.’ As your principal balance shrinks, you’ll build up some serious equity, which you can use down the road when you sell or decide to do a cash-out refinance. You can’t pay yourself when renting.”

Opportunity cost of waiting

Here’s what you stand to lose by staying on the fence.

  • A chance to build equity. The longer your rent payment goes directly to the property owner, the more you’ll miss out on building equity and ultimately owning a home outright. To get an idea of how much equity you’d miss out on, multiply your rent payment by the number of months you’ve waited to buy a home.

A fixed mortgage payment. The only fluctuation you’ll ever see in your payments as a homeowner is when taxes and insurance are adjusted. Otherwise, it’s a fixed payment for the life of a loan. Unlike rental prices, which are set by property owners and, despite a miniscule drop recently, have been increasing in Oregon over the past few years.

A more balanced market

For the first time in several years, the scales have shifted somewhat to give buyers more power. Here are the main reasons the market has teetered back toward the middle:

  • Sale-to-list ratio decline. A good heat check for the market is the percent sold-to-list-price ratio. The higher the percentage, the more buyers are willing to “bid up” (often out of necessity) their offer price. In April 2022, homes were selling for about 6 percent higher than the listing price. One year later, those figures are nearly even.
  • Days on market. For the past several years, sellers were juggling multiple offers and, in a blink, houses were off the market. Today, homes are staying on the market longer—an average of 52 days, compared to 23, year over year—which works in the buyer’s favor in the form of price drops or other concessions like seller credits that can offset some or all of a buyer’s closing costs. Speaking of which …
  • Seller credits are back. The market was so hot for a few years that no seller or agent would consider picking up a buyer’s closing costs. But now, as listings sit on the market longer, there’s more incentive for the seller to contribute to those expenses. These costs are typically 2%-5% of the loan amount, so if the seller steps in to help, you could potentially save thousands of dollars before getting the keys to your new home. 

As you can see, there are many compelling reasons to invest in buying a home in today’s market. There’s no way to predict what a fickle market will do next, so don’t hesitate if you feel you can check all the boxes to make it happen.

Ready to learn more? SELCO offers periodic workshops for first-time homebuyers, and our mortgage loan officers are already available to answer questions. Give us a call when the time is right for you, and we’ll help you get the ball rolling.

Looking to Consolidate Debt? Try a HELOC.

What would you rather have—several hundred dollars in monthly payments spread across all your credit cards or one smaller payment over a set number of years?

If you’re a homeowner, a home equity line of credit (HELOC) may be what you need to reel in that pesky debt. Aside from being fun to say, a HELOC (hee-lock) can be more than just a means of improving or renovating your home—it’s also a valuable tool for consolidating high-interest payments.

How it works

Not to be confused with its home equity loan brethren, a HELOC is a revolving line of credit into which you can sink your credit-card balances. Because HELOCs are secured by your home, their interest rates are considerably lower than credit cards. And the more of your home you have paid off, the better off you’ll be. The two key factors for determining a HELOC interest rate are combined loan-to-value ratio (CLTV ratio)—the sum of your mortgage balance and proposed line of credit divided by your home’s appraised value—and your credit score. If you have excellent credit and your CLTV is 80% or lower, you could conceivably get a HELOC at a much lower rate than any of your credit cards. Rates often fluctuate, so check out SELCO’s rate sheet to stay on top of it. Even if your credit isn’t stellar and your LTV is above that threshold, you’ll still enjoy a much better rate than the current average credit card rate of 24%. And that’s just the average.

“If you’re looking to consolidate your high-rate credit cards into one payment, HELOCs are a great way to save money on your monthly payments and total interest paid,” said Jessica Fairchild-Clements, Loan Officer Processing Supervisor at SELCO.

An example

At SELCO, a potential line of credit is typically up to 80% of your home’s value minus the balance on your mortgage. Here’s an example using the 80% formula: If your home is worth $400,000 and you owe $300,000 on your mortgage, you’d likely be eligible for a line of up to $20,000.

$400,000 x 80% = $320,000

$320,000 – $300,000 = $20,000

Let’s run a scenario based on that calculation, shall we? Say you’re saddled with $10,000 of credit-card debt, with interest rates ranging from 14% to 24%. If you transferred all that debt into a HELOC, you could pay as little as $100 per month with an interest rate south of 10%. At SELCO, HELOC payments can be as low as 1% of the outstanding balance based on your most-recent advance.

Smart next steps

Now that your debt is tucked away in one bucket, be sure to limit your use of those suddenly zero-balance cards. “Otherwise, you could make a difficult situation even worse,” Fairchild-Clements said.

Minimizing your balance may also have a positive effect on your credit score. Thirty percent of your score is determined by your credit capacity, so while paying off or paying down your cards will most likely improve that score, it also helps to keep at least one of those cards open (as long as you’re not stuck with annual fees).

There are other factors to consider. Since your home is collateral, make sure you can afford the monthly payments. Fall behind and you run the risk of foreclosure on your house. SELCO gives you 15 years to pay back your full HELOC balance, so if the minimum is all you can swing, there’s plenty of time to eliminate your debt at a relatively low interest rate. HELOC rates are variable, so should the Federal Reserve increase the APR, yours will as well—unless you lock into a fixed rate. “But remember that your credit card rate could also go up,” Fairchild-Clements said.

There are a few other factors to weigh that may influence your decision. Some lenders charge an annual fee that can be as high as $100 (SELCO charges $45 annually). If a full appraisal is required, SELCO requires that be paid out of pocket. SELCO also issues a fee if you close the loan within the first 24 months; at the same time, most upfront costs are covered. And finally, you’ll want to make sure your debt-to-income ratio—monthly loan payments divided by your gross earnings—is no more than 40%–45%.

If the math adds up and you have a plan that you’ll stick to, a HELOC may be the vehicle you need for the road to financial freedom. And who knows? Maybe there will be room at the end for those home improvements you’ve been putting off while paying down your debt.

Ready to learn more? Schedule an appointment with a SELCO representative, stop by your local branch, or call 800-445-4483 to see if a HELOC is right for your needs.

Homeowners Can Put Equity to Work with a HELOC

As any savvy homeowner will tell you, protecting the investment in your home is a crucial part of ownership.

After all, a home is likely the largest investment many of us will make. While upgrades, renovations, and additions often help maintain or even boost a home’s value, these undertakings can be costly. 

Thankfully, homeowners have an effective tool at their disposal—their home’s equity. By leveraging the equity in their home, homeowners can secure the funds needed to tackle delayed projects or even prepare for surprises down the road. SELCO Community Credit Union, serving 27 Oregon and 8 Washington counties, offers an array of products designed to put your home’s equity to work. Given the current market, it’s no surprise that SELCO has seen an increase in interest for its home equity lines of credit, known as HELOCs

What exactly is a SELCO HELOC?

Using the equity in a borrower’s home as collateral, borrowers and lenders agree to a maximum loan amount and term. SELCO adds flexibility by issuing the approved homeowner a Home Equity Visa card, which can be used anywhere Visa is accepted to access HELOC funds as needed throughout the draw period (typically between five and 15 years). This gives borrowers convenient access to their line of credit at each step in the process.

“Very few home-improvement projects come with a fixed price tag and a perfectly defined timeline,” said Michael Sauley, SELCO’s Vice President of Consumer Lending and Senior Consumer Credit Officer. “So our HELOCs were designed for the way most homeowners complete their projects.”

Once the original project is complete, borrowers get continued access to their line of credit, and they pay only for the credit they actually use.

Other benefits

Another advantage of a HELOC is that most borrowers receive a tax break, since interest paid on the loan is often tax deductible. But it’s wise to consult a tax adviser before getting started.

“HELOCs unlock an array of benefits that will actually lower the overall cost of a home-improvement project and let homeowners save resources for the project itself, optimizing the return on investment,” Sauley said.

SELCO’s HELOCs are indeed useful tools to help cover the costs of home improvements, but cost isn’t the only consideration when committing to a project.

Before tapping into the equity of your home for upgrades, renovations, or improvements, homeowners should make sure the project is worth the cost and that the right form of credit is being used. As with any financial decision, due diligence is key. Not all home improvement projects are created equal, and every homeowner should first consider a project’s return on investment.

Modernizing a kitchen, projects that increase living space, energy-efficient upgrades, fixes to existing critical systems (such as electrical, heating, or plumbing), and improvements to the landscaping or outdoor living spaces can help preserve, or even increase, a home’s value.

SELCO’s expertise and personalized, local service—which has fueled the credit union for more than 85 years—only adds to the value of a HELOC.

“For most of us, home equity is our most valuable financial asset, and homeowners should never treat their home’s equity frivolously,” Sauley said. “SELCO’s lending team works directly with our members to help guide them through the entire process and help maximize their investment.”

Ready to start your home improvement project? Schedule an appointment with a SELCO representative, stop by your local branch, or call 800-445-4483 to see if a HELOC is right for your needs.

What to Buy and Skip in March

March is one of the quieter shopping months since there are no major holidays or sale events.

But that doesn’t mean you can’t pick up some fantastic buys on things like luggage, winter apparel, and frozen food (really).

Here’s what to buy and what to skip in March.

What to Buy 

  • Luggage. To get ready for the summer travel rush, retailers start rolling out their new luggage styles in March. Here’s when to grab an unsold suitcase from last year at a bargain price—just in time for your spring break getaway.
  • Winter apparel. There may not be many winter coats left on the racks, but what remains should be marked way down. The blowout sales began in earnest in February, and with the warmer spring weather right around the corner, the deals in March may be even better. (Hopefully, someone still has your size.)
  • Frozen food. March is National Frozen Food Month, and many stores offer stellar deals on items for your freezer. With so much variety up and down the frozen food aisle, this is a great time to stock up on fruit, vegetables, ice cream, prepared meals, you name it.
  • Pi Day deals. Not to be confused with National Pie Day on January 23, Pi Day lands on March 14 (you know, 3.14159 …). Rather than going out to eat on St. Patrick’s Day, you’re probably better off dining out three days earlier. Many restaurants will offer specials (sometimes as low as $3.14) on—you guessed it—pies (yes, that includes pizza).

What to Skip

  • Large appliances. Spring is prime time for all kinds of home improvement projects, but upgrading your appliances is best saved for another time. Appliances are generally full-priced this month, and they’ll be discounted in just two months during Memorial Day sale events.
  • Mattresses. Daylight saving may disrupt your sleep cycle this month, but that doesn’t make March a good time to upgrade your mattress. You’re better off waiting until their prices drop during sale events in the months of February, May, September, and November.
  • TVs. With the blowout sales long over, TVs are back to full price in March. If you missed the chance to upgrade your home entertainment system at a discounted price, you’ll want to wait until “Black Friday in July” events. Of course, you can also find bargain-priced TVs at sale events during the actual Black Friday in November.
  • Spring clothing. You may be itching to fill your closet with bright spring colors and clothing made of cooler, lighter fabric, but if you can hold off just a bit, you’ll save a bundle. Spring clothing is still relatively fresh in stores and won’t begin to see discounts until May.

For additional financial tips, tricks, and refreshers, check out SELCO’s Education Center.

Common Savings Terms (and What They Really Mean)

Planning Your Future | Forming Money Habits

When finding the best fit for your savings goals, it helps to know the lingo.

You likely know what a savings account is, but how it—and other savings options—works can be confusing. That also goes for common financial terms we often see but aren’t often explained (or explained clearly). So, let’s take a look at a few savings-related terms—both what they mean and what that means for you.


  • What does it mean?

For deposit accounts, such as a savings account or certificate, interest is the amount you earn on top of the amount you deposit. Basically, interest earned is what financial institutions pay you for keeping your money with them. (On the other hand, interest paid, like when you take out a loan, is what a financial institution charges you to borrow the money.)

  • What does it mean for you?

By keeping your money in an interest-earning account for a longer period of time, your savings can multiply as time goes on by earning interest on the interest (this is known as compound interest). In short, the more you have in savings for longer, the more you earn.


  • What does it mean?

A certificate is a type of savings account that earns interest on a lump sum over a predetermined period (similar to a CD). Certificates will earn you much more than a standard savings account, though you’ll need to leave your money untouched for a set amount of time (the certificate “term”) to avoid an early-withdrawal penalty. The good news is, certificate terms run the gamut, from a few months (if you don’t want to lock up your money for long) to a few years.

  • What does it mean for you?

There’s some patience required with certificates, but the payoff can be significant, since certificates usually have much higher rates than savings accounts. Rates are generally higher for multiple-year terms, but with many different terms available, you don’t need to tie up your money forever. And unlike the stock market, certificates are a sure thing.

APY (Annual Percentage Yield)

  • What does it mean?

The annual yield of a savings product (displayed as a percentage) tells you how much you’ll earn if you keep your money in that account for one year.

  • What does it mean for you?

APY helps you determine which savings options will earn the most over time. With a higher-APY product, your savings can grow even faster as the interest compounds (i.e., as you earn interest on your earned interest). As the deposit amount and time invested increase, the earnings become more significant. See for yourself how much you can earn using this free online calculator.


  • What does it mean?

Liquidity refers to how quickly individuals or businesses can convert assets (like money deposited in a checking account or a certificate) to cash without negatively affecting their value.

  • What does it mean for you?

In addition to actual cash, many deposit products (for example savings and checking accounts) are considered viable liquid assets because money can be withdrawn easily to settle liabilities. Certificates are also considered liquid assets, since you can withdraw early (though, as mentioned above, you will incur an early-withdrawal penalty). Fortunately, there are short-term certificate options (3 months, 6 months, 12 months), so you don’t need to stash your cash for long to earn higher dividends.

Hopefully, this brief savings glossary will help lift the fog over terms you may have heard many times but were never fully explained. But remember, no two savings goals are the same, and some savings options will fit your needs better than others. If you’d like to talk through the best savings path for your goals and needs (or if you have questions about other financial terminology), stop by your nearest SELCO branch or contact a representative. We’re ready to help.

2023 New Year Jumpstart Guide

Start 2023 right with SELCO Community Credit Union’s New Year Jumpstart Guide. Wherever you call your financial home, we hope this list of tips, updates, and reminders will help set you up for success in the new year.

Stay up to date

Contact details: move in 2022? Change your name? Get a new phone number or email? Be sure to keep your critical contact information up to date with your financial institution so you don’t miss out on important account communications (or helpful guides like this one)! If you’re a SELCO member, you can verify your contact info by logging into digital banking, calling us at 800-445-4483, or starting a live chat during business hours.

Beneficiaries: While you’re verifying your account info, take the opportunity to review and update your beneficiary information as well. 

Alert notifications: Keep tabs on your accounts by setting up transaction alerts via email, text, or push notifications. (SELCO members can learn how here.)

Maximize your contributions and savings

2022 IRA contributions: It’s not too late! You have until April 15 to meet your maximum annual IRA contribution. (Just make sure to note the contribution is for the prior year.) 

2023 IRA contribution limits: Contribution limits have increased for both traditional and Roth IRAs. As a reminder, you can contribute to a traditional IRA at any age if you’re still earning income.

    • If you’re under 50, the maximum contribution is $6,500 (up from $6,000).
    • If you’re 50+, you can contribute up to $7,500 (up from $7,000).

Required Minimum Distributions (RMDs): These are required when you reach age 72. Speak with your financial professional to learn specific details.

2023 401K contributions: Good news—contribution limits have increased dramatically for 2023:

    • If you’re under 50, the maximum contribution is $22,500 (up from $20,500).
    • If you’re 50+, the catch-up contributions rose to $7,500 (up from $6,500), meaning you can now contribute up to $30,000.

2023 HSA contribution: For the 2023 calendar year, maximum Health Savings Account contributions are also increasing.  

    • If you’re under 55, the new maximums are $3,850 for individuals (up from $3,650) and $7,750 for families (up from $7,300).
    • If you’re 55+, you can now contribute up to $4,850 (up from $4,650) to an individual HSA or $8,750 (up from $8,300) to a family HSA.

Save more in 2023: If your New Year’s resolution is to sock away more for the future, our savings products (including certificates) can help you get there. You can also make use of SELCO’s free Financial Calculators to help set savings targets and meet long-term goals.

Setting up a direct deposit for a refund

Expecting a tax refund? Make sure you’re receiving your refund as quickly as possible by verifying that you’ve included the complete routing and account numbers where you want your refund deposited.

SELCO members can find their account information in a few places:

    • In digital banking, click or tap the account you wish to directly deposit funds into, then “Details,” and you’ll find the routing number and full account number for ACH/direct deposit. (Note: SELCO’s routing number is 323274445.)
    • On a check, your account number is the 14-digit number in the lower-middle portion.

For more tips on getting your “financial house” in order, check out these “10 Financial New Year’s Resolutions.” Interested in learning more about SELCO? We’d love to introduce ourselves.


After Recent Decline, CDs Rebound

With the highest rates in years, CDs are well worth a look. Not only are SELCO’s certificate rates among the best anywhere, if our rates rise within 30 days, we’ll automatically increase yours to match.

The year was 1981. The United States was feeling the sting of two full-blown recessions. Inflation rates hovered around 10–13% and interest rates skyrocketed to 21%. The worst downturn since the Great Depression.

But this plunge also gave consumers the option to lock into sky-high rates on certificates of deposit that have gone unrivaled since. In December 1980, the interest rate for a 3-month CD surged to 18.65% APY (annual percentage yield).

“If an investor timed it well, deposit returns outpaced the inflation rate, which created favorable results for savers,” said Tiffany Washington, Executive Vice President of Finance & Operations at SELCO. “However, it had the opposite effect on borrowers, with loan rates through the roof.”

Over the next three decades, certificates experienced a lot of volatility, fluctuating between 8% and 2%. But by late 2015, 6-month certificates hit rock-bottom, with average yields barely clearing a tenth of a percentage point.

With such a dismal recent history, it’s no wonder so many younger adults are unfamiliar with certificates. But now’s a great time for savers of any age to become better acquainted.

Certificates reward members for committing their savings for a set period, paying higher dividend rates than typical savings, checking, or money market accounts. With a minimum balance of just $500 and NCUSIF-backed insurance for up to $250,000, certificates are an excellent option for anyone seeking guaranteed returns without risk. 

Rate shopping? SELCO’s best-rate guarantee is hard to beat

As a SELCO member, you can count on exceptional certificate rates across the board. We constantly track the marketplace and make adjustments to ensure our members are receiving the best possible returns on certificates, typically beating rates offered by other local financial institutions and big national banks alike.

And if our rates increase within 30 days of opening your certificate, we’ll boost your rate to match, giving you peace of mind that your money is earning as much as possible. It’s what we call our best-rate guarantee. 

Given the current environment, now may be the ideal time to consider socking away some money in a certificate. And if you have long-term savings at another financial institution, it’s a great time for an interest rate check-up against SELCO’s certificate rates.

Questions about SELCO’s certificate options? Stop by your local branch or contact us by phone, chat, or text. Your not-too-distant-future self will thank you.

5 Misconceptions About CDs

There’s a lot CDs have to offer (and not only for those with money to burn). Interest rates have been on the rise as of late, so there’s no time like now to consider this investment option. Here are a few misconceptions you may have heard about CD investments—and reasons why you might reconsider this “set it and forget it” way to earn.

Myth #1: They’re only for people with a lot of money

You don’t need a six-figure salary to invest in a CD. Most credit unions and banks offer CDs starting with as little as $1,000 or even $500.

Myth #2: They’ll tie up my money for too long

You can open a CD with a commitment as short as six months. (See SELCO’s current rates.) Of course, if you won’t need your funds that soon, you’ll earn a higher interest rate with a longer term. Even in a worst-case scenario, if you need to withdraw the money before the maturity date, you can. You’ll typically give up a few months’ worth of accrued interest as a penalty, which will only impact your principal if you opened the CD very recently.

Myth #3: They’re risky

Unlike the stock market, your certificate balance is insured by the FDIC (banks) or NCUA (credit unions) for up to $250,000. That’s about as safe as it gets.

Myth #4: They aren’t profitable

Sure, a CD won’t give you the high returns of a game-changing stock purchase, but your earnings are guaranteed (no matter how the market fares). They can be a great way to earn interest while saving for a longer-term goal, like a wedding, major vacation, or down payment on a home.

Myth #5: I’d be better off keeping my money in savings

Only if you’re likely to need the money within six months. Otherwise, unless you’re earning an extraordinary return on a savings account (the average rate today hovers around .05%), you’ll earn significantly more interest with a CD. Plus, with a CD, you won’t be as tempted to spend what you’ve worked so hard to set aside.

If you want a guaranteed way to earn interest on your deposit, CDs are definitely worth a look. Ready to learn more or get started? SELCO Community Credit Union is here to help.

The 3 Signs You’re Ready to Buy Your First Home

Across the United States, 36% of households are renting.

On the surface, this indicates a vast divide between homeowners and renters. However, that gap has been steadily shrinking over the past couple years. (For more on renting vs. owning, check out these stats.) This reluctance to buy isn’t exactly coincidental. (Hint: The current housing market heavily favors the seller.) Beyond that, it’s difficult to stay so committed to future plans, and ownership represents a long-term investment to a single location and consistent budget. In the age of streaming media and subscription-style cell phone plans, “commitment” and “long-term investment” start sounding like dirty words.

Despite those mental (and financial) hurdles, there are plenty of reasons to become a homeowner. Homeownership can build wealth over time and grant tax deductions you’d never see as a renter. Also, interest shrinks as a mortgage is paid off, while rent costs tend to grow. Even after taking potential risks into account, buying a home can be a financially beneficial long-term decision.

Still, there’s a lot of information out there on home-buying, and it can be a little intimidating when you’re shopping around for the first time. We asked Mike Lavender, SELCO’s Mortgage Manager, how renters can figure out when they might be ready to buy. 

“It comes down to just a few items,” Lavender says.

1. You can get a mortgage comparable to your rent.

The first and simplest question potential buyers need to ask is if mortgage payments fit into their monthly budgets. If you’re currently renting, compare your rent to your potential mortgage. If you need help adding all the components, check out SELCO’s Mortgage Calculators to help put together an initial estimate.

Even if the mortgage is a bit higher than your rent, keep in mind that mortgages have a few advantages. For one, most are built around fixed rates. This means that your monthly payments won’t increase over time. “Rent,” Lavender reminds us, “only ever goes up.” Additionally, rent has no chance of any return on investment, while the value of your home can (and usually does) rise.

It’s important to note that not all mortgages are created equal. Some come with a rate discount and rate lock, meaning you can take your time and shop with confidence that your rate won’t go up during the lock period (even if market rates do).

2. You plan to stay put at least three years.

The three-year rule of thumb isn’t written in stone, but it does give a rough benchmark for whether you’re at the right stage in life to become a homeowner. Why three years? As mentioned above, paying off a mortgage shrinks the size of your interest payments. It usually takes about three years for the amount saved on shrinking interest to pull even with the rent you’re no longer paying. Those savings will also need to cover your closing costs for the investment to truly break even.

3. You can handle the responsibility of maintenance.

Maintenance is the hidden price tag when buying a property. “Even a new home will require upkeep and maintenance,” Lavender notes.

This can be a tough adjustment for someone used to calling a landlord when a faucet leaks or a water heater fails. Make sure you’re able to maintain an emergency fund for these inevitable repairs and replacements.

Buying vs. renting is a complex decision, but it doesn’t have to be complicated. A lot of information for homeowners focuses on ways to game the system to find the best possible rates. You’ve probably come across advice about buyers’ and sellers’ markets, high and low interest rates, or how much you should put down as the initial down payment.

“These things can make it easier or harder to find the right home, but they don’t change you as an individual,” Lavender says.

The reality is that homeownership depends more on your current situation than the market’s situation. A “good time to buy” doesn’t necessarily mean it’s the right time for you.

As with all financial decisions, you know your own housing needs best. The tips above are guideposts, but only you can decide your long-term goals. But if you ever need any questions answered along the way, SELCO’s team of loan officers is here to help.

Keep Your Investments on Track While Weathering the Inflation Storm

You likely don’t need us to tell you: Inflation is through the roof, average gas prices hit an all-time high in June (but are coming back to Earth, thankfully), and the stock market is experiencing a downturn.

All of these negative forces have caused some pundits to suspect that another recession is on the way. 

Needless to say, the American dollar doesn’t stretch as far as we’d like right now. And you would be forgiven if you didn’t want to look at your investment portfolio.

But there is good news: The economy has been here before—and always recovered.

While it’s tempting to make drastic changes to your portfolio, sticking to a logical long-term plan for your investments remains a wise choice. There are also smart, subtle ways to be frugal now to help you emerge from the current volatility unscathed.

“Generally, there are things we can invest in—and ways we can allocate money—that can help alleviate the strain that inflation causes,” said Tyler Hague, CFS Investment Advisor at SELCO Investment & Retirement Services*. Keeping a long-term investment horizon and staying properly diversified is your best bet for dealing with inflation or any type of market disruptions.”

Midterm elections may trigger a recovery

The S&P 500 index, a barometer of the stock market and economy, officially entered a bear market in June. What that means is, the S&P 500 has experienced a decline of 20% or more for a prolonged period. The unwelcome news is your investments will unfortunately lose some of what had been gained. But the good news is, the S&P has always bounced back from bear markets. And historically, the most significant valleys and peaks take place in the 12 months preceding midterm elections and the year that follows. With the 2022 midterms looming, a booming market may very well follow.

Dig deep for opportunities to save

In the meantime, to ensure that ends meet, you may consider other ways to save while keeping with your long-term investment plan: 

  • Refinance your loans. After reaching historic lows, interest rates have climbed back up, but it still could make sense to restructure your mortgage or vehicle loan. Even at a slightly higher rate, you can lower your monthly payment by extending the term to pay off your loans.

  • Review your insurance policy for savings. Stellar driving record? Most insurance providers reward safe drivers with lower premiums, vanishing deductibles, and rebates. And now with select providers, you can even earn rewards toward discounts on wellness products and life insurance premiums.

  • Switch up your day-to-day. Every spending decision adds up, regardless of whether money is tight. Here are some simple life/budget hacks that can temporarily cut costs (or permanently if they fit your needs):
    • Pause your streaming subscriptions for a few months.
    • Reassess your TV or cellphone plans.
    • Explore new haunts close to home as opposed to extravagant vacations.

Evaluate, adjust, and stay patient

If your priorities have changed, due to inflation challenges or otherwise, and you need a little more breathing room, you can always revisit your portfolio and make adjustments. Consider the following maneuvers: 

  • Reduce your contributions. If you’re contributing to a company 401(k), IRA, or other investment account, consider scaling back your monthly contributions (or pause them completely) knowing the funds can still grow and you can pick it up later. If your employer contributes to your 401(k) plan, that’s an extra layer of security if you decide to stop putting money in for a while.

  • Keep diversifying your investments. Another way to stay ahead is to invest in assets that tend to outperform the market during inflation. Balancing your portfolio with common anti-inflation assets—dividend stocks in sectors like energy, consumer staples, and real estate tend to perform well—provides a nice buffer until the market corrects itself. SELCO’s Investment & Retirement Specialists are available to answer your questions and offer suggestions.

“Evaluating and adjusting your portfolio throughout your investing life is critical to long-term success. We won’t invest the same way at 25 as we will at 55, nor should we,” Hague said. “Whenever there’s a market downturn, invariably we wish we would have bought more when the market was volatile. But as long as we invest for the long-term, short-term disruptions shouldn’t factor into our investing strategy at all, even if they can make you uncomfortable.”

The sluggish economy of 2022 has been challenging for many, to say the least. But this too shall pass. By taking advantage of savings opportunities while trusting that your investments remain safe, you should remain on solid ground until the economy can make a recovery.


*Nondeposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/ SIPC) and SEC Registered Investment Advisor. Nondeposit investment products offered through CFS are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. SELCO Community Credit Union has contracted with CFS to make nondeposit investment products and services available to credit union members.