September 2012

In This Newsletter:

"Like" Us on Facebook...and We Will Donate $5 to Local Food Pantries

In just a few months, The Peoples Community Bank will be running our annual "Community Food Drive."  Last year, our food drive raised $10,625 and collected in excess of 1,500 pounds of food for food pantries in Arena, Barneveld, Mazomanie and Spring Green.

This year, we will be adding contributions through your support on Facebook.  From September 1st through October 31st, The Peoples Community Bank will make a $5 donation to local food pantries for each new "like" on our Facebook page.  

In mid-December, as we close our annual food pantry drive, we'll add this money to other funds raised for pantries in Arena, Barneveld, Mazomanie, and Spring Green.

Visit our Facebook page and click the "Like" button to help us raise funds to support these vital programs in nutrition and community development in the communities we serve.   

About the Local Food Pantries:  There are food pantries in Arena, Barneveld, Mazomanie and Spring Green; and in several other communities within Iowa, Dane, and Sauk Counties.  All of the pantries are free and all disburse supplies to anyone in the community having need.  Use of the pantry by those in need is confidential.

Thank you in advance for your support.

Health Savings Accounts Gaining in Popularity

With recent changes in health care legislation, Health Savings Accounts (HSA) are gaining in popularity.  These tax-favored accounts offer savings and investment opportunities to anyone with a qualifying high-deductible health insurance plan - currently a $1,200 minimum deductible for an individual plan and $2,400 for a family plan.  

Once you open an HSA, you can place tax-deductible contributions into it which can then be used to pay qualified medical expenses.  Annual contribution limits for 2012 are $3,100 for an individual and $6,250 for a family plus an additional $1,000 catch-up contribution for those who are age 55 and over and not enrolled in Medicare.  

The definition of qualified medical expenses is fairly extensive and includes expenditures for eyeglasses, hearing aids, eye surgery including LASIK, smoking cessation programs, prescription drugs and insulin, weight-loss programs for treatment of a specific disease, diagnostic tests and long-term care expenses including premiums paid for long-term care insurance.    

There's no "use it or lose it" rule with an HSA.  You can use HSA funds to pay current health care expenses or build assets to pay for future expenses.  Savings in an HSA grow tax-free and money withdrawn for qualified medical expenses is excludable from gross income.

Most Health Savings Accounts simply place invested assets in a low interest rate savings account but our Investment Center offers a product through a subsidiary of United Health Care that also permits investment in various mutual funds when a $500 minimum account balance is maintained.  This can be an especially attractive alternative when HSA funds are being accumulated for future health care expenses.

Should you have questions or wish to learn more about Health Savings Accounts, Mike or Nancy in our Investment Center would be pleased to assist you.

6 Tips for New Home Buyers

If you are looking for a new home, or buying your first one, this may be an excellent time to buy.  Interest rates are very low, home prices are appealing, and the U.S. housing market may be showing signs of recovery.  

Following these 6 steps can help you make smart decisions and find the right house for the right price.

  • Know your credit scores.  Your credit score is incredibly important toward a home purchase.  For starters, a score below 660 usually results in a higher interest rate or denial of credit.  If your score is too low, start working diligently to rebuild it by paying every bill on time, paying down as much debt as possible and disputing any erroneous information on the report.
  • Make sure you have enough saved for down payment.  Whether or not you're a first time home buyer, a down payment is essential.  Ideally, aim to put down 20 percent of the purchase price.  If not, talk to your mortgage lender about other options.
  • Know the real costs of being a first-time home buyer.  In addition to mortgage payments, private mortgage insurance and escrow payments - the funds withdrawn to cover home insurance and taxes -can add a few hundred dollars or more a month to a mortgage payment.  Also homeowners must pay for repairs and maintenance that accrue over time.
  • Understand private mortgage insurance.  Mortgages with less 20 percent down payment (or 20 percent equity) require private mortgage insurance in case the owner defaults on the loan.  Once your home equity reaches 20 percent or greater, you can request to stop paying the additional insurance on a conventional mortgage.
  • Don't stretch your budget too far.  Standard guidelines call for keeping housing expenses below 35 percent of total income.  If you are uncertain, wait to buy.
  • Avoid a prepayment penalty on your mortgage.  If the mortgage has a prepayment penalty, borrowers face hefty charges if they pay it off early.  This provision also can be triggered by refinancing down the road.  Review the Truth in Lending disclosures that your loan officer sends you prior to signing your loan.

If you have the money for a home, now is a great time to get a real bargain.  One of our mortgage lenders will be happy to help you explore your home financing options.

Personal Finance Tip:  Stop Paying ATM Surcharge Fees

At $2 to $3 per withdrawal, surcharge fees can add up. In fact, just one withdrawal per week can cost as much as $100-150 per year. Knowing where to find surcharge-free ATMs can save a bundle.

Your debit card from The Peoples Community Bank provides you access to more than 20,000 surcharge-free ATMs across the U.S.  

To search for a Money Pass® ATM location, simply click here or use our Mobile App.


This newsletter does not constitute tax, legal, accounting or other professional advice. We attempt to be accurate, but neither we nor any other party shall be held liable for loss or damages resulting from reliance upon or use of this material. © 2012 The Peoples Community Bank