Money Matters

2014 a special supplement to the perham focus

Headline

Subheadline BYLINE Byline2

Body

Subhead

pullout photoinfo

tagline

All Types of Effective Professional Collections - Since 1964 MEMbEr of ACA

CREDITORS SERVICE COMPANY

ow to earn a more H affordable mortgage ����������������������

2 Planning matters ��������������������������� 4 Spring cleaning your financial closet ����������������������� 6 Simple ways to save money on insurance ���������������������� 8 The benefits of financial planning � ���������������������� 10 Tips for newlyweds about to merge finances � ������������ 12 Determine the best time to refinance a mortgage ������������� 14 Income tax return DIY or Pro � ������ 16 Published by the Perham Focus 222 2nd Avenue SE • Perham, MN 56573 Phone (218) 346-5900

Wayne Hartje cscinc@arvig.net 218-346- 5320 Toll Free: 800-292-5124

INSURANCE AGENCY

255 Third Avenue SE P.O. Box 150 Perham, MN 56573 Phone:(218)-346-6250

Time & money...

222 2nd Ave SE, Ste A Perham, MN 56573

Serving the Perham Area for over 40 Years

www.overlandinsurance.com

Rachel Staebler Lustila Doug Wartner

CMCU saved me both.

“We refinanced our loans because of shorter terms & better rates.

Plus, I save time managing funds & paying bills with online banking.

CMCU was simply a better option for my family. ”

Amelia Holmer Specializing in:

—Cathy, CMCU Member





EMPLOYEE BENEFITS  Small Groups  Large Groups HEALTH INSURANCE 

Medicare



MNSure



Individual & Family Plans

Serving individual, family and group plans with multiple companies for health, dental, life, disability and Medicare plans.

Phone 218-346-7642 Toll Free 866-346-7642 Let us see if we can help you, schedule a financial checkup with us today!

888.330.8482 | myCMCU.org facebook.com/myCMCU Federally Insured by NCUA

Peham@midwesthealthbenefits.com www.MidwestHealthBenefits.com

610 Third Ave SE | Perham, MN 56573 519 Atlantic Ave | PO Box 596 | Morris, MN 56267 100 SE 1st St | PO Box 254 | Glenwood, MN 56334

Country Financial can help you protect what’s important and build for the future.

Why Derek Jensen?

Creating the avenues to financial security is overwhelming. You may not have the resources or the time to do all the research and administer all the plans.

Your local CountrY Financial representative, Derek Jensen does!

Derek will take the time to get to know you – so you can successfully meet all your financial security needs. Derek is backed by a specialized team of experts to help you balance your need to protect what you have with your desire to build for the future.

Give Derek a call today.

1034658

Why Country Financial?

Derek Jensen, Country Financial,

245 W. Main St., Suite B, Perham, Mn 218-346-5141 derek.jensen@countryfinancial.com You have nothing to lose by sitting down with me for a confidential Financial review. When you work with me and CountrY Financial, you will receive personal attention and service, comprehensive professional experience and the added support of a team of experts.

0114-263

Money matters 2014

1

how to earn a more affordable

mortgage H

ome ownership remains a dream for many people. But on the heels of the recession that began in late 2008, prospective home buyers are finding it far more difficult to secure a mortgage than it was in the years before the economy took a turn for the worse. Stricter guidelines now govern both borrowers and lenders alike, and the process can quickly frustrate prospective homeowners.

But strict guidelines and more diligent lenders do not mean prospective borrowers will not be able to secure a loan to finance their home purchases.

It just means those borrowers might

2

Money matters 2014

want to take every stop possible to ensure their loan applications are approved and their mortgages are affordable. ❖ Address credit concerns before beginning the process.

Poor credit is a prospective borrower’s worst enemy, and it’s an instant and glaring red flag to lenders. And thanks to inaccuracies on their credit reports, some people may have poor credit and not even know it. Before they even begin the process of applying for a home loan, wouldbe applicants should go over their credit reports with a fine tooth comb, ensuring there are no potentially

harmful inaccuracies that may affect the ability to secure an affordable mortgage. Inaccuracies or poor credit histories can bring down individuals’ credit scores, which lenders use to determine home loan interest rates.

So prospective applicants should have any errors to their credit reports corrected and/or work to improve their credit scores before applying for loans. ❖ Pay down debt. Even if an applicant’s credit score is solid, lenders may scoff at applicants with substantial amounts of debt. Credit card debt should be paid down before beginning the process, and it also

to pay the mortgage. ❖ Make a substantial down payment. Lenders look fondly on borrowers who can afford hefty down payments, feeling that such borrowers are less likely to default on their loans.

In addition, the larger the down payment, the less the monthly mortgage payment will be, saving borrowers a significant amount of interest fees over the course of the loan.

At United Community Bank, we strive to match our customers with the best mortgage product to fit their needs. If we have a customer that does not qualify for mortgage financing, we take the time to help them understand what they can do to help position themselves to qualify for a mortgage loan. Our goal is to be a resource for all of our customers and help them succeed financially. ❖

Here is the quick link to our new Mobiliti™ Mobile Banking • Check Real Time Balances • View History • Transfer Funds • Pay Bills • Person to Person Payments • ATM Branch Locator

Or search for us in the App Store or Google Play Store

Mobiliti™ Mobile Banking

www.ucbankmn.c om

may benefit applicants to pay off any additional loans, such as car notes or student loans, before applying for a home loan. The less debt an applicant has, the more attractive that applicant becomes. ❖ Avoid overusing credit cards.

Using credit too frequently also can make it more difficult for prospective home buyers to secure a home loan.

Credit card holders each have a maximum limit on their credit cards, and financial experts recommend using less than 20 percent of available credit to maintain a strong credit rating. ❖ Don’t bluff on loan applications. Some borrowers might be tempted to inflate their earnings on home loan applications, including counting overtime or bonuses they haven’t yet earned when listing their annual income. Borrowers can expect lenders to request documentation of any extra income, including bonuses, so applicants should avoid including additional income on their applications unless they can prove it.

Applicants also must avoid hiding past issues on their applications.

Banks performing their due diligence will eventually discover any past problems, so applicants should be straightforward from the start. Applicants concerned about their earnings should know that it’s acceptable to include information about assets such as retirement plans and savings even if those funds don’t figure to be used

Money matters 2014

3

Planning M

artin Luther King, Jr.’s family is currently fighting over his Bible and Nobel Peace Prize.

James Gandolfini, star of the show “The Sopranos,” could have avoided or at least significantly postponed approximately $30 million in estate taxes upon his death. Most of Marilyn Monroe’s estate ended up in the hands of her acting coach’s third wife.

Over half of Americans die without having a plan in place to transfer their assets. And, for those people who do die with a plan, not all of those plans may be appropriate for their situations. Without proper planning, the loved ones and beneficiaries left behind can be stuck in some unfortu-

4

Money matters 2014

nate circumstances. Take the following examples: A car accident kills both young parents, who have not designated guardians or put trusts in place for their children. Relatives go to court and fight about custody over the children and the children receive all of their parents’ assets when they turn 18.

An uncle promises his business to his nephew who is helping with the business but the uncle has no paperwork in place. After the uncle dies, the nephew cannot afford to buy out the heirs-at-law’s interest in the estate.

The business goes under. ❖ A parent with a special needs child does not have proper planning

in place when she dies. The child inherits the assets, which disqualifies the child from all of the assistance the child was receiving. ❖ A farmer does not get any estate tax planning done. Her death forces her heirs to sell the farm, which has been in the family for a century, so that they can pay estate taxes within nine months. ❖ A man leaves his estate outright to his second wife. After he dies, the wife changes her estate planning and disinherits the man’s children from a previous relationship. Her children end up with the man’s assets. ❖ A woman dies leaving everything to her daughter who has an addiction problem. The daughter does not get help and spends her inheritance on her addiction. ❖ A wealthy entrepreneur goes to the local stationary store and fills out his own simple will. He does not make his bequests very clearly. Five years and $250,000 in attorney’s fees later, the beneficiaries are still fighting. ❖ A grandmother wants her grandchildren to inherit equally. However, she puts only one grandchild’s name on her financial accounts and nothing goes through her will. That one grandchild gets all grandma’s assets.

We may not be billionaires or celebrities, but we work hard and we try to be fiscally responsible with the assets we have accumulated. Those assets may range from multi-million dollar businesses to the woodpecker

toothpick holder that used to sit on great-grandma’s kitchen table. But, we all have treasures. Part of being good stewards for the treasures we have gathered includes making sure we have an appropriate plan in place for transferring our assets upon our disability or death.

At Lakeview Trust & Estate Law, PLLC attorney Amy Mursu provides guidance about wealth transfer planning and supports people through the

legal and tax process after a loved one passes away. Amy concentrates her law practice solely in estate and trust administration; estate and gift tax issues; and, estate and business succession planning. She assists clients with a variety of estate planning issues including: wills, trusts, charitable giving, minimizing estate tax, planning for incapacity, and major gift planning.

Amy also advocates for her clients in estate and gift tax audits with the IRS and Department of Revenue. ❖

Attorney AmyAnn W. Mursu 316 MN HWY 78 North Suite 110 Ottertail, MN 56571

Big firm experience…

Small town values.

Phone: (218) 367-5253 (LAKE) Fax: (218) 367-6006 E-mail: amy@lakeviewestatelaw.com www.lakeviewestatelaw.com

Money matters 2014

5

Spring Cleaning In Your

Financial closet Bring retirement assets under control by rolling over into an IRA

S

pring cleaning season is upon us. Garage? Check. Basement? Check. Finances?

Do you have multiple retirement accounts? Often times when people switch jobs, open separate accounts or have accounts left to them, they stay separate and dispersed among companies, institutions or owners.

You can clean up these disparate accounts by rolling over your older or multiple retirement accounts into a single Individual Retirement Account (IRA) saving you time and possibly expense.

Current rules permit nearly every qualified retirement plan to be either transferred, or rolled over, to another qualified retirement plan. Note that there are exceptions and rules when combining these various plans so make sure you involve a financial professional in your decision making. Common qualified retirement accounts that might be eligible for a rollover include: 401(k), 403(b) or 457(b) plans. Should you meet a distribution event under these retirement plans, such as either leaving that employer to take another job or retiring, you can transfer or rollover your balance under that plan to either another employer sponsored qualified plan or an IRA on an income tax

6

Money matters 2014

advantaged basis. Thrivent Financial offers the following basics for what you need to know about rolling over into an IRA. An IRA is an individual account that provides you with income tax deferral to help you save for retirement. There is what is referred to as a traditional IRA which accepts before tax contributions and grows income tax deferred until distributions are taken and then taxed. There is also a Roth IRA which accepts after income tax contributions which can grow income tax free if certain requirements are met. The growth of these two types of accounts isn’t guaranteed and there are inherent risks with any investment.

An IRA rollover is the act of funding an IRA account with all assets being rolled over or transferred directly from an existing tax-qualified retirement account, a pension plan, a profit sharing plan, 401(k) plan, 403(b) plan or another IRA, typically, without either tax penalty or income tax withholding, for continued tax-deferred growth.

Special rules apply to distributions to and from designated Roth 401(k), Roth 403(b), Roth 457(b) and Roth IRA accounts, as Roth accounts can only be rolled into a Roth IRA. An additional advantage of consolidating your retirement accounts into one IRA is that when it comes time for you to take a mandatory distribution from your IRA (which typically happens at age 70 ½ for most taxpayers)

you need only make one annual calculation and one annual distribution.

Multiple retirement plan accounts would necessitate multiple annual calculations and multiple annual distributions.

Yet, another consideration to getting your retirement plans consolidated into one account is that it will make it easier for your loved ones to locate and handle your retirement account upon death. In taking this step you can help relieve some of the burden from them at a very difficult time.

You can find more information at www.thrivent.com/IRA. Talk to your financial representative about specific questions and concerns.

While cleaning out the back corners of your basement, you should consider cleaning out your financial back corners too.

This article was prepared by Thrivent Financial for use by Perham representative Jean Hallberg. She has offices at 155 7th Ave. SW, in Perham and can also be reached at 218-3465073. ❖

About Thrivent Financial for Lutherans

Thrivent Financial for Lutherans is a faith-based, Fortune 500 financial services membership organization helping its nearly 2.5 million members to be wise with money and to live generous lives.

Thrivent Financial and its affiliates offer a broad range of financial products and services. As a not-forprofit organization, Thrivent Financial joins with its members to create and support national outreach programs and activities that help congregations, schools, charitable organizations and individuals in need. For more information, visit Thrivent.com. Also, you can find us on Facebook and Twitter.

Insurance products issued or offered by Thrivent Financial for Lutherans, Appleton, WI. Not all products are available in all states. Securities and investment advisory services are offered through Thrivent Investment Management Inc., 625 Fourth Ave. S., Minneapolis, MN 55415, 800-847-4836, a FINRA and SIPC member and a wholly owned subsidiary of Thrivent Financial for Lutherans. Thrivent Financial representatives are registered representatives of Thrivent Investment Management Inc. They are also licensed insurance agents/producers of Thrivent Financial.

Working together with one goal in mind: Your financial success.

Jean Hallberg, CLTC®, FIC Financial Associate 155 7th Ave. SW Perham, MN 56573 218-346-5073

Registered Representatives for securities and investment advisory services offered through Thrivent Investment Management Inc. Member FINRA and SIPC. For additional important disclosure information, please visit Thrivent.com/disclosures.

23607F R11-13

750506

Money matters 2014

7

Simple ways to save money on

insurance costs O

ver the course of their lifetimes, men and women can expect to spend thousands of dollars on insurance. People insure their vehicles, homes, health, lives, and a host of other things, and the cost of such security can be significant. Considered essential by many men and women, insurance is unlike any other product or service, as people will pay for it all the while hoping they never need it. That reality leaves many policy holders wondering if there are any ways to save on their insurance policies without diminishing their coverage.

Though insurance companies consider a host of factors when determining the cost of each individual policy, there are some ways that all men and women can reduce their insurance bills. � Bundle your policies. Multipolicy discounts, which many insurance companies offer to policy holders who combine two or more policies, can save men and women substantial amounts of money. Purchasing homeowners’, automotive and life insurance policies from the same provider saves consumers an average of 10 percent, and such a discount can add up to a significant

8

Money matters 2014

amount of money over the life of your policies. ❖ Comparison shop. Though shopping for insurance might not be as fun as finding your next television or test driving cars, comparison shopping when buying insurance can save policy holders a significant amount of money. The cost of insurance often varies significantly from provider to provider, and consumers should exercise due diligence when looking to cut their insurance costs. Comfort level with an existing insurance provider should not outweigh the savings you might earn elsewhere, especially if another provider can offer you the same exact coverage at a much lower price. You may even be able to lower your existing policy if you contact your current provider and inform them you have received a more affordable estimate with another company.

❖ Consider specialist companies. A handful of insurance companies specialize in particular types of insurance. For example, one company might specialize in motorcycle insurance and might be more capable of tailoring your policy to your particular driving habits, offering you discounts depending on how many years you have been riding motorcycles. However, a more general company might simply lump you into one big group, meaning you’re likely to earn similar rates as novice riders without your experience. There are specialist companies offering various types of insurance, so look into such companies if you have special needs or less popular hobbies that require insurance. ❖ Stop paying for duplicate coverage. Many people can trim some of their monthly insurance costs

by combing their existing coverages to determine if they are paying for duplicate coverage. For instance, your auto insurance policy may include health coverage, but chances are your existing health insurance will trump the health coverage offered by your auto insurance policy, meaning you’re paying for the same thing twice. Examine each of your policies to determine if you are paying for any duplicate coverage, and then contact your provider to remove such items if you find them.

At Farmers & Merchants Insurance Agency, we can help you with your insurance needs: Homeowners, Vehicle, Boat, Recreational Vehicles and more. Stop in to see Greg and find out how we can help you save money and you can have access to your agent right in your own backyard! ❖

Farmers & Merchants Insurance Agency Auto • Fire • Business • Home Boat • Life • Disability • Farm • Liability

11 North Walker • PO Box 278 • New York Mills, MN 56567 218-385-2300 x 3 • 218-385-9303 (Fax) gregi@fmbanknym.com

www.fmbanknym.com

Farmers & Merchants State Bank New York Mills Since 1916

Greg Imsande Insurance Agent

We’re there with you…every step of the way!

Money matters 2014

9

The benefits of

financial planning F

inancial planning is often mistakenly assumed to be a concern for the wealthy. That assumption essentially promotes the idea that people without much money need not worry about what to do with their finances. However, financial planning can benefit people at all income levels, even helping those at lower income levels move into higher brackets if they plan successfully.

Though having an idea of how to spend and grow your money is

10

Money matters 2014

an idea many people would likely embrace, a significantly large number of people do not have a financial plan.

In its 2012 Household Financial Planning Survey, the Certified Financial Planner Board of Standards found that just 31 percent of financial decision makers in families had created a financial plan. Some survey respondents did so on their own, while others used the services of a financial planner. Though some might be intimidated or even scared to institute their

own financial plans, it can be done.

For those who are especially hesitant to develop their own financial plans, financial planners can help you define your goals and make those goals a reality. The benefits of financial planning are numerous, helping men and women build better financial futures. â?– A financial plan forces you to define your goals. One of the biggest advantages to financial planning is it forces men and women to define their financial goals. An effective finan-

cial plan should consider both shortand long-term goals. If you hope to one day own a home, a financial plan can help you figure out how quickly you will own that home. A good financial plan also can help you map out a course for retirement. Ambiguity with respect to your finances is potentially dangerous. Saying you want to retire at 60 and developing a plan to make that happen are two very different things, but the latter can make it happen while the former won’t get you anywhere unless you take action.

Be as specific as possible when defining your goals, and recognize that, depending on when you are making your financial plan, you might need to reassess those goals if they are not realistic. ❖ A financial plan can help you curtail your spending. With a financial plan in place, you’re less likely to waste your money on frivolous things.

Without a plan, you’re more likely to treat money as disposable, putting your financial future in jeopardy as a result. A careful examination of your financial situation can shed light on areas where your spending is excessive. A negative cash flow, which occurs when there is more money going out than coming in, has never been a part of a successful financial plan. Correcting such a situation, which is often accomplished when people establish a financial plan that

trims excessive spending, can go a long way toward securing your financial future. ❖ A financial plan can be motivational. Another significant and often overlooked benefit to financial planning is how such planning can act as a motivator. A good financial plan

ter ways. You wouldn’t pay for the same slice of pizza twice, so why pay for the same coverage twice? But unless you make a financial plan, you are unlikely to find those areas where you’re wasting money or discover the numerous ways in which your money can be better spent.

financial planning can benefit people at all income levels, even helping those at lower income levels move into higher brackets if they plan successfully will include certain measuring sticks, such as having debt paid off by a particular date or a certain day by which you hope to deposit a certain amount of money into your savings. These measuring sticks often motivate men and women to be more responsible with their money, and many people find living up to short-term financial goals to be very rewarding. ❖ A financial plan makes better use of your money. Even if you don’t have any negative spending habits, a financial plan can help you make better use of the money you do have. A closer examination of your finances can often yield a host of ways to grow your money or save it.

For example, you might have multiple insurance policies, some of which offer duplicate coverage. Examining each policy and removing duplicate coverage can save you money and help you spend that money in bet-

❖ A financial plan helps you grow your money. Even if you are worried about investing or especially skittish when it comes to risk, you will need to find ways to grow your money, and a financial plan can help you do just that. The concept of inflation dictates that the dollar you have today won’t be worth as much next year, meaning you will need to take steps to grow your money if you hope to have enough to get by in retirement. A financial plan can help everyone, whether they’re risk-averse or not, grow their money. Something as simple as opening an interest-bearing account will grow your money more than if you were to put that money under the mattress. Without a financial plan that includes ways to grow your money, the money you have will only lessen in value as time goes on. ❖

Why Country Financial?

Country Financial can help you protect what’s important and build for the future.

Derek Jensen, Country Financial, 245 W. Main St., Suite B, Perham, Mn • 218-346-5141 • derek.jensen@countryfinancial.com

You have nothing to lose by sitting down with me for a confidential Financial review. When you work with me and CountrY Financial, you will receive personal attention and service, comprehensive professional experience and the added support of a team of experts.

0114-263

Money matters 2014

11

Tips for newlyweds

merge finances

about to

N

ewlyweds often have a lot on their plates upon returning from their honeymoons.

One of the more critical issues newly married couples must address is their finances and how those finances will be combined going forward.

Combining finances can be a touchy subject for many couples, especially those who had not given much thought to their finances prior to tying the knot. But there are steps couples can take to make the process of merging finances go more smoothly. â?– Discuss finances early and often. Allowing finances to be the elephant in the room is a mistake, as couples do not want to begin their lives together treading lightly around an issue as significant as finances.

Couples should discuss their expenditures and spending habits as early as possible, as one of the biggest hurdles newly married couples must clear is coming to grips with one another’s financial habits. If such habits have already been discussed, then developing a financial plan will be much easier once that time comes.

When discussing finances, define both short-term and long-term goals and how each of you can adjust your spending habits to make those goals come true.

12

Money matters 2014

❖ Pay off any debts. The cost of weddings has skyrocketed over the last several decades, and many newlyweds find themselves in a considerable amount of debt upon returning from their honeymoons. When merging finances, couples should prioritize paying down such debt, as debt is a significant source of stress for newlyweds and long-married couples alike.

Newly married couples with little or no debt should avoid spending above their means in the months after they get married. Such spending is commonplace, as newly married couples often want to fully furnish their new homes or reward themselves for pulling off their weddings. But new debt can be just as stressful on a marriage as debt from the wedding, so avoid this potentially problematic pitfall by paying down existing debts with your newly merged finances. ❖ Make note of mutual expenses and open a joint account to pay for those expenses. Mutual expenses like mortgage payments, food and utilities should be the responsibility of each partner, and a joint account should be established to handle such expenses. When opening a joint account, discuss how much and how often each partner will contribute money. One partner might earn considerably more money than another, so work out a reasonable agreement that details how much each partner will contribute each month, and whether such contributions will

rs

e Flow be made on a weekly, bi-weekly or monthly basis. ❖ Make concessions for one another. When merging finances, couples often discover that they don’t see eye-to-eye on how each person spends money. Couples who successfully merge their finances often note the importance of making concessions with regard to their partners’ spending on certain hobbies or luxuries. As long as those hobbies are not putting couples in debt or jeopardizing their financial goals, couples can make concessions so their partners continue to be happy and enjoy their favorite activities.

Merging finances is an issue that looms for many newlyweds or couples about to tie the knot. Though it’s not always easy, merging finances early and discussing goals can ensure newlyweds get off on the right financial foot.

Farmers & Merchants State Bank in New York Mills can help you on your life’s financial journey. Whether you’re saving for your wedding, merging your accounts, getting a loan to buy a new home, opening an account to save for a child’s education or starting an IRA to plan for retirement, we are there for you…every step of the way! ❖

No matter where you’re at along your life’s journey,

we’re there with you…

You use your phone to connect with friends, play games and more…

Why not bank on it?

11 North Walker • PO Box 278 • New York Mills, MN 56567 218-385-2300 Telephone • 218-385-9303 Fax • 800-469-0055 Telebanc

Farmers & Merchants State Bank

www.fmbanknym.com

New York Mills Since 1916

…every step of the way!

Money matters 2014

13

Determine the best time to

refinance a

mortgage R

efinancing a mortgage is advantageous to homeowners for a variety of reasons. The primary reasons people refinance their mortgages are to reduce their monthly payments or free up equity to use toward home improvements or other necessities. Lenders will frequently advertise that “now”_is the time to refinance, but people may want to get all of the facts before making their decisions.

A low interest rate is not reason alone to refinance. Conventional wisdom has long suggested that borrowers wait to refinance until interest rates drop 2 percent below their current rate. While a low interest rate is important, there are several other factors to consider. ❖ Closing costs: Refinancing a home is an expensive undertaking.

While it can effectively shave $100 or more off your monthly payments, there is a financial outlay during the process, which includes closing costs. A person can expect to pay anywhere from 2 to 5 percent of the loan’s value in closing costs when refinancing. Lenders used to enable some to roll the cost of the closing into the mortgage, but stringent rules have changed the way many banks now do business. If the finances are simply not there to cover the clos-

14

Money matters 2014

ing costs, refinancing may not be an option. ❖ Credit rating: If your credit rating is better now than it was when you initially earned your home loan, then this might be a good time to refinance. Not only will a person benefit from a low market rate, the interest rate may be even lower because lenders look more fondly on you now than they did years ago.

Lenders often base their assessments of borrower reliability and stability on those potential borrowers’ credit scores, so a strong credit score makes you look better in the eyes of lenders. Borrowers with poor credit ratings may not benefit from refinancing. ❖ Income: A person’s debtto-income ratio is another factor in determining mortgage interest rates and approval. A positive change in income status as well as reduction in debt could make it a good time to refinance. ❖ Adjustable rate mortgages: Many people opted for adjustable rate mortgages when buying homes years ago. Over time, their monthly payments may have increased considerably, making it nearly impossible to afford a home. Refinancing for a fixed-rate mortgage, regardless of the current interest rate, will likely ease

some of your financial burden. ❖ Home value: A higher home value means more equity in the home.

This money can be used to pay down debt or for home improvements that further improve the value of the home and property. It is important to speak with a real estate professional to determine if home values have spiked in a particular neighborhood and to gain an accurate appraisal of the home. This will help determine if refinancing is frugal. ❖ Interest rates: Lower interest rates often motivate homeowners to refinance, as a lower interest rate can save homeowners a substantial

amount of money over the course of their loans. However, refinancing too soon (within 4 years of the original home loan) may put homeowners in a negative light. Lenders may see borrowers who refinance too soon or too frequently as risky borrowers who cannot successfully manage their money.

❖ Prepayment penalties: Certain mortgages have prepayment penalties built in. Should a person pay off the mortgage too early, usually within two to five years, 2 to 4 percent of the home’s loan value must be paid out. Refinancing counts as paying off one loan and opening up another.

Penalties could deter a person from

Farming is a Risky Business...

Do YOU have the RIGHT insurance?

Contact Denise by March 17th 109 Coney Street West, Perham 218-346-7290 • 1-800-582-7290

Get set for life.

refinancing too soon.

Determining the best time to refinance your home mortgage takes effort on the part of the borrower and information about market trends. By doing one’s homework and being aware of certain factors, a person can save money by refinancing a home loan. ❖

1730 30th Ave S, Moorhead, MN 56560 office: 800-279-1060 • fax: 218-233-1117 website: www.jj-ins.com Tom Tamlyn 218-205-8909 ttamlyn@arvig.net

Serving Otter tail County

• Great Rates • Free Quotes • Affordable Premium Payment Plans • A+ rated companies

Commercial Insurance - Worker’s Comp, LH Trucking, Contractors, Municipalities, School Districts, Nursery, Convenience Stores, Restaurants & Taverns Personal Insurance - Home, Auto, Boats, Motorcycles Life Insurance

• Mortgage • Investments • Insurance • Trust • Retirement Planning

Perham • 346-1300 Detroit Lakes • 847-9292 800-908-BANK (2265) Bremer.com Bremer Bank Member FDIC. Equal Housing Lender. Products and services offered through Bremer Trust and Bremer Insurance are not insured by FDIC, are not a deposit or other obligation of, or guaranteed by, the depository institution, and are subject to investment risks including possible loss of the principal amount invested. © 2014 Bremer Financial Corporation. All rights reserved.

MoneyMatters.indd 1

2/18/14 10:49 AM

Money matters 2014

15

INCOME TAX RETURNS diy or take it to a

professional?

U

nfortunately, nobody gets off the hook. Every year, we must do our civic duty and declare our income. While some of us prefer to sit down and struggle with all those little boxes and blanks as best we can, others simply entrust the task to tax specialists. So just when, exactly, is it worthwhile to ask a tax professional for help?

That depends on the complexity of your situation. Do you rent your home and have only one job? Are you single, with no dependents? If figures don’t scare you and you are aware of tax laws as they apply to you, filling out your return by yourself

16

Money matters 2014

is a challenge you can probably navigate through.

Do be careful, though. It is possible to make costly mistakes with the tax system the way it is, and a small oversight in your income tax return can cost you hundreds of dollars. Because of this, it can be quite useful to look for help beyond your income tax software program.

A bookkeeper or accountant can advise and guide you through the process, pointing you toward tax deductions that you might not have even been aware of.

For any kind of financial situation more complicated than that, it is defi-

nitely worth handing over your tax file to a professional. An accountant is the best person to help you benefit from all the deductions and credits for which you are admissible. It is also possible to use the services of bookkeeper tax return specialists. Just remember to be vigilant and not put your trust in anyone who can’t offer good credentials and references or membership in a professional association. Completing an income tax return requires divulging personal information, such as your social security number, address, and annual income, so it is essential to make a wise choice. ❖

So many different events can affect your finances.

A CPA can piece it all together for you.

Financial matters can get complicated quickly. That’s why a CPA is always there for you. If you have any questions or concerns, just let your CPA know about it.

Keeping in touch with your CPA throughout the year helps you keep on top of it all and makes it easier around tax time. America counts on CPAs. Please come in and see us. Or if you prefer to do it yourself, instead of Turbotax, we have a local option for you.

Please enter exact address for more info: prep.1040.com/eznow

BEKKERUS • SCHOTT • HELMEKE • DECONCINI • JOHNSONltd

Certified Public Accountants 1116 Highway 59 South Detroit Lakes, MN 56501 218-847-3133

Buying/Selling a Home Retirement Planning

160 Third Avenue SW Perham, MN 56573 218-346-4200

Financial matters can get complicated quickly. That’s why a CPA is al www.lakescpa.com

for you. If you have any questions or concerns, just let your CPA kn

Marriage

Keeping in touch with your CPA throughout the year helps you kee

Refinancing Your Home

it all and makes it easier around tax time. America counts on CPAs

College Planning Getting a Job/ Losing a Job

All year long, events affect your financial picture.

That’s why your CPA is there for you all year long.

Contributing to Charity Selling Stocks/ Investments

aicpa.org

1

The Community Bank of Otter Tail County

ST

P

Starting a Business v ro

with you ng i d i

NATIONAL BANK

fnancial services for o v er

— Henning — 218-583-2933 — Ottertail — 218-367-2735 — Battle lake — 218-864-5275

free checking f free internet banking f free debit cards customerservice@fnbhenning.com

11 0

ye ar s.

F

STRONG, INDEPENDENT & LOCAL

STRONG, INDEPENDENT & LOCAL

STRONG, INDEPENDENT & LOCAL © MTI, Inc

© MTI, Inc

Your Community Bank.

PERHAM DEAN’S 301 West Main 218-346-5700

211 MARKET DR 218-346-5707

DENT

101 N 1ST AVE 218-758-2100

FRAZEE

122 W MAIN 218-334-5501