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Saving for College

Stacked quarters next to a mason jar filled with coins and a graduation cap on top.

How much student loan debt do you think the average college student has when they finally get their degree? $10,000? Think again! According to the Wall Street Journal, the average American college student graduates with over $37,000 in student loan debt. They will be lucky to have that paid off before their own children attend college. It has never been more important to learn how to save for college. Here are a few easy ways to get started!

Education Savings Accounts (ESA)

An Education Savings Account or an Education IRA will allow you to save $2,000 per year per child in an account that is tax-free while it grows! If you begin saving from the time your child is born up until they turn 18, that’s $36,000 invested into their future. The account would earn a better rate of return than a regular savings account, and you will not be taxed until the money is withdrawn. There are income limits placed on the account to qualify, but these are a great way to get started while your child is young.

529 Plan

If you don’t meet the income limits for an ESA or you want to contribute more per year, a 529 Plan is a great option. The best 529 Plans allow you to choose the funds that you want to invest in through the account and generally have a maximum limit of $300,000. These accounts also grow tax-free and can be transferred from child to child if need be. These accounts also receive favorable financial aid treatment and are treated as parent assets and do not have to be reported on the FAFSA when funds are used to pay for college.

Roth IRA

Roth IRAs are another good college savings option. Contributions can be withdrawn at any time for any reason and the normal early withdrawal penalty can be waived when spent on qualified higher education expenses. Most IRAs have a maximum yearly investment of $5,000, but if you begin saving from the time your child is born to the time they turn 18, you will have $90,000 saved for their future. The value of the account is not counted as an asset on the FAFSA, but withdraws to pay for college will be counted as income on the FAFSA.

It is never too early to begin saving for college. Talk to your local banker about these options to find the one that makes the most sense for you and your family. The bankers at Points West Community Bank are your resource for all your personal savings needs!

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5 Things to Know When Buying Your First Home

A small house decoration on a desk with someone handing keys over.

Buying your first home can be exciting and stressful all at the same time. Before you start working with a realtor and attending open houses and showings, you should first make sure that you are financially ready to buy a home. Here are 5 things to know when you’re looking to buy your first home.

Check Your Credit Score

Getting a mortgage requires a good credit score, so we recommend checking your credit report. Look for any errors in your report that may be dragging your credit score down. Most errors can be fixed, and by monitoring your credit before applying for a mortgage, you will avoid any surprises. If your score is less than you’d like it to be, try paying down any credit cards and stop using them for a couple of months. Also, avoid opening any new lines of credit until after you have closed on your new home.

Save for a Down Payment

In addition to making sure your credit score is in order, you will also need to think about the down payment that you will need in order to make your first home a reality. Down payments are typically between 3.5% and 20% of the purchase price of a home. For example, for a $300,000 home, the minimum down payment you will need is $10,500. You should also be sure to save more than your minimum down payment to pay for closing costs.

Determine How Much You Can Afford

With rent prices on the rise in Colorado, it may actually be cheaper to buy a home than continue to pay rent. However, you want to be sure that you buy a home that you can afford today, not 5 years from now. You can estimate what you can afford by calculating 30% of your gross monthly household income. Any more than that could leave you with financial stress.

Learn About Mortgage Types

Mortgage types can vary and it may be confusing to compare one mortgage to another. Take time to learn about the differences between fixed-rate mortgages and adjustable rates. Mortgages can also vary in length from as little as five years to as much as 30 years. Most first time home buyers opt for fixed-rate 30-year mortgages. There are also different mortgages available to first-time home buyers. For example, an FHA mortgage requires a small down payment, which means that your monthly payment is a little more expensive because you have to pay for private mortgage insurance. Do your research on all of the loan options available to you.

Get Documentation In Order

Once you’re in the right place financially to purchase your first home, it’s time to get documentation in order. You can get a pre-approval from a bank like Points West Community Bank, or from a local loan officer. This will help you submit your offer on the home you want to purchase. To close on a home, you will need copies of paystubs, W-2’s, bank statements, and if you’re self-employed, copies of your last two tax returns.

At Points West Community Bank, we are your resource for financial knowledge. If you have any questions about how to save money for a home or improve your credit score, talk to one of our friendly bankers at your local Points West Community Bank! With several locations across Northern Colorado, we’re easily accessible.

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Points West Community Bank to Open Loveland, CO location in Orchards Area

Points West Community Bank has announced that they will be opening a Loveland, CO location later in 2019, according to Mark Brase, Colorado President of Points West Community Bank. “Points West has been working for several months to secure a Loveland location to better serve this community,” said Brase. “We see this as an amazing opportunity to better serve our existing customers, and expand our community banking footprint for businesses and consumers in the Loveland area,” Brase continued.

The bank has been working with Nathan Klein of 295 East 29th, LLC, the building owner which in turn is owned and managed by the principals of LC Real Estate Group, LLC, along with Dawn Oglesby and Bryony Wagner of Oglesby Design to reestablish the building located at 295 East 29th Street. Cindy Lopez-Ellis, Loveland Branch Manager for Points West said, “We believe the Orchards area is the perfect place for Points West. We are community minded: we support local businesses, we make decisions locally, we support local causes, and see the strength of the vibrant Loveland community. We can’t wait to share our story, and become a larger part of the Loveland community.”

While details are still being finalized, Brase and Lopez-Ellis both stated they are excited to bring the Points West Hometown feeling back into community banking within the Loveland marketplace.

About Points West Community Bank:
Family-owned Points West Community Bank has been serving Colorado communities since 1906. Points West is locally owned and operated throughout 18 locations and 3 States. For more information, please visit pwcbank.com.

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Points West Community Bank is Proud to Partner with Power to Play Sports

Aerial shot of Power 2 Play Facility

 

Power to Play (P2P) Sports is a 53,000 square foot facility in Windsor, Colorado with the main vision of providing unique opportunities for athletes of all ages and abilities. They offer leagues in basketball, volleyball, badminton, and pickleball as well as offering running/ walking loops and lounge areas to all guests.

 

We are excited and proud to be supporting their vision and the Northern Colorado community by serving as the official banking partner to P2P Sports.

 

With this partnership, we are able to create more opportunities for those involved to build self-confidence and learn what it means to be a part of a team.

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How to Save Money for Travel

Family on the beach

Are you dreaming up a vacation, but you’re worried about how to afford it? What if we told you that you could start saving travel right now? Well, you can, and here’s how.

Assess Your Monthly Expenditures

The amounts of money that are automatically debited from our accounts are often forgotten about. Go through your monthly statement, and see what you can cut back on. It is common that expenses such as gym memberships, magazine subscriptions, music streaming services, or even cable can cost you a large amount of your monthly allowances. Cancel some of these services or re-negotiate costs.

Create a Budget

Start with the most important categories first: mortgage/rent, groceries, gas, utilities, credit card bills, etc. With the money that you have left at the end of the month, decide where it is allocated, and do not budge. You can re-evaluate at a later date if you find that you have less/more money than necessary. The money that is extra in each category now goes straight into savings.

Set Up Automatic Transfers

If you have a direct deposit set up with your employer, change the way it is being deposited into your account. For example, automatically set your direct deposit up so a certain percentage or amount is put into your savings account instead of your checking. You will be saving money each paycheck without even trying.

Cut Out Convenience

Your morning coffee runs always seem like a small expense at the time, but let’s break it down. Spending $3.50 on coffee Monday thru Friday morning totals to $17.50 a week. That is $70 a month. If you often eat lunch out, cut that cost as well. Bring coffee and lunch from home, and you will be able to put those amounts straight into your vacation fund instead.

 

If you don’t have a savings account already, get in touch with your local banker today.

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