Using a HELOC to Pay Off High-Rate Debt. Is it a Good Idea?

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Homeowners might wonder whether it’s a good idea to tap their home equity, or the market value of the property minus what is still owed on it, to pay down other types of debt, especially high-interest credit card balances.

Homeowners might wonder whether it’s a good idea to tap their home equity, or the market value of the property minus what is still owed on it, to pay down other types of debt, especially high-interest credit card balances.

One way to do this, using a home equity line of credit, is growing in popularity — more than $120 billion in HELOCs were created in 2014, an increase of about 22% over the previous year.

How a HELOC works

A HELOC, or home equity line of credit, is a bit like a second mortgage since your home serves as the collateral for the loan. However, a HELOC is a form of revolving debt, like a charge account, in that you’re able to withdraw money up to an approved limit, using a card or check, repay it and draw it down again. Since it’s secured, a HELOC usually has a much lower interest rate than the average credit card or a personal loan. You pay interest only on the amount you take out, and what you pay is often tax-deductible* on HELOCs up to $100,000.

Most lenders limit how much of your home’s value you can borrow. If your house is appraised at $400,000, you could borrow as much as $320,000 on it, including the first mortgage, at an 80% debt-to-value cap. So if your mortgage balance is $250,000, your home equity is $150,000, but the maximum you could borrow on that would be $70,000.

If you have significant debt, say, on a credit card with a 15% interest rate, a HELOC might seem like an easy solution. You could save on interest costs and lower your monthly payments. But proceed carefully. Unless you’re certain you have a stable plan for keeping up your payments, you could be putting your home at risk as a short-term solution to a financial jam.

Fees and risks to consider

Before you go too far, find out what obtaining a HELOC from your lender would cost — it might be substantially more than taking out a personal loan, for instance. A HELOC might require an application fee, property title search, an appraisal and attorney fees and even points, like on a mortgage. Lenders might waive some of these costs, but some also charge annual fees and withdrawal fees.

Most HELOCs have variable rates, so your monthly payments could go up or down periodically. Ask your lender how often the rate can be adjusted, and by how much. Some financial institutions offer fixed-rate HELOCs, but they might have higher initial interest rates than adjustable-rate credit lines.

Suppose your income drops unexpectedly, say from a job loss. If you were to default on unsecured credit card debt, the issuer wouldn’t be able to take possession of your property. But default on a HELOC and the lender could cause you to lose your home.

Using a lower-rate HELOC to pay down high-rate debt can be a savvy financial move as long as you fully understand all the costs and risks and have a stable plan for keeping up with your repayments.

*Please consult your tax advisor for questions.

© Copyright 2015 NerdWallet, Inc. All Rights Reserved

Interested in applying for a HELOC or other kind of loan? We can help. Start the loan process here.

 

8 Tips to Protect Your Identity

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Protect Your Identity
Identity theft continues to be one of the fastest growing crimes in the United States. In 2014, there were 12.7 million victims of identity fraud in the U.S., according to Javelin Strategy and Research. F&M Bank recommends following these tips to keep your information – and your money – safe.

Identity theft continues to be one of the fastest growing crimes in the United States. In 2014, there were 12.7 million victims of identity fraud in the U.S., according to Javelin Strategy and Research. F&M Bank recommends following these tips to keep your information – and your money – safe.

1. Don’t share your secrets.

Don’t provide your Social Security number or account information to anyone who contacts you online or over the phone. Protect your PINs and passwords and do not share them with anyone. Use a combination of letters and numbers for your passwords and change them periodically. Do not reveal sensitive or personal information on social networking sites.

2. Shred sensitive papers.

Shred receipts, banks statements and unused credit card offers before throwing them away.

3. Keep an eye out for missing mail.

Fraudsters look for monthly bank or credit card statements or other mail containing your financial information. Consider enrolling in online banking to reduce the likelihood of paper statements being stolen. Also, don’t mail bills from your own mailbox with the flag up.

4. Use online banking to protect yourself.

Monitor your financial accounts regularly for fraudulent transactions. Sign up for text or email alerts from your bank for certain types of transactions, such as online purchases or transactions of more than $500.

5. Monitor your credit report.

Order a free copy of your credit report every four months from one of the three credit reporting agencies at annualcreditreport.com.

6. Protect your computer.

Make sure the virus protection software on your computer is active and up to date. When conducting business online, make sure your browser’s padlock or key icon is active. Also look for an “s” after the “http” to be sure the website is secure.

7. Protect your mobile device.

Use the passcode lock on your smartphone and other devices. This will make it more difficult for thieves to access your information if your device is lost or stolen. Before you donate, sell or trade your mobile device, be sure to wipe it using specialized software or using the manufacturer’s recommended technique. Some software allows you to wipe your device remotely if it is lost or stolen. Use caution when downloading apps, as they may contain malware and avoid opening links and attachments – especially for senders you don’t know.

8. Report any suspected fraud to your bank immediately.

 

5 Ways to Protect Your Small Business from Account Fraud

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Protect Your Small Business from Account Fraud
Corporate account takeover is a type of fraud where thieves gain access to a business’ finances to make unauthorized transactions, including transferring funds from the company, creating and adding new fake employees to payroll, and stealing sensitive customer information that may not be recoverable. F&M Bank recommends following these tips to keep your small business safe.

Corporate account takeover is a type of fraud where thieves gain access to a business’ finances to make unauthorized transactions, including transferring funds from the company, creating and adding new fake employees to payroll, and stealing sensitive customer information that may not be recoverable. F&M Bank recommends following these tips to keep your small business safe.

1.    Educate your employees. You and your employees are the first line of defense against corporate account takeover. A strong security program paired with employee education about the warning signs, safe practices, and responses to a suspected takeover are essential to protecting your company and customers.

2.    Protect your online environment. It is important to protect your cyber environment just as you would your cash and physical location. Do not use unprotected internet connections. Encrypt sensitive data and keep updated virus protections on your computer. Use complex passwords and change them periodically.

3.    Partner with your bank to prevent unauthorized transactions. Talk to your banker about programs that safeguard you from unauthorized transactions. Positive Pay and other services offer call backs, device authentication, multi-person approval processes and batch limits help protect you from fraud.

4.    Pay attention to suspicious activity and react quickly. Look out for unexplained account or network activity, pop ups, and suspicious emails. If detected, immediately contact your financial institution, stop all online activity and remove any systems that may have been compromised. Keep records of what happened.

5.    Understand your responsibilities and liabilities. The account agreement with your bank will detail what commercially reasonable security measures are required in your business. It is critical that you understand and implement the security safeguards in the agreement. If you don’t, you could be liable for losses resulting from a takeover. Talk to your banker if you have any questions about your responsibilities.

For additional information, give us a call or email us; we will be happy to help. You can also visit the following websites to learn more about how to protect your small business:

•    U.S. Chamber of Commerce: Internet Security Essentials for Business
•    Federal Communications Commission: 10 Cybersecurity Strategies for Small Business
•    Better Business Bureau: Data Security Made Simpler 
•    NACHA – The Electronic Payments Association Corporate Account Takeover Resource Center

Identity Theft Protection|fa-lock|159|ID SafeChoice|1

The Harm in Password Reuse

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Every day malicious cyber-actors compromise websites and post lists of usernames, email addresses, and passwords online. While this can be embarrassing, such as when thousands of government employees email addresses and passwords were exposed during the recent Ashley Madison breach, it also leaves users open to follow-on potential attacks due to password reuse.

Every day malicious cyber-actors compromise websites and post lists of usernames, email addresses, and passwords online. While this can be embarrassing, such as when thousands of government employees email addresses and passwords were exposed during the recent Ashley Madison breach, it also leaves users open to follow-on potential attacks due to password reuse.

Password reuse is when someone reuses the same password on multiple websites or accounts.  This is a vulnerability when the password is exposed in coordination with other information that identifies who is using the password, such as first and last names, login names, or email addresses.

How Password Reuse is a Threat

NEVER use your work email address when signing up for and accessing personal web sites.

Password reuse is a threat because malicious actors can take advantage of a reused password if there is other associated information that identifies you. This typically occurs through one of two potential scenarios:

In the first, and most common  scenario, the malicious actors can search for other accounts you use and try to login with the same password. In some cases the actors might try to find personal accounts such as Facebook, Twitter, or banking websites. If they can identify those accounts, and you reuse your password, they can login as you. In other instances the malicious actors may try to determine where you are employed and attempt to use for remote access, such as through a remote email or timecard access.

A second scenario involving a malicious website is much less common, but still poses a threat. In this scenario the malicious cyber-actor sets up a website that spoofs a legitimate web site, which requests you enter an email address, password, and potentially other information to gain access. Once you have done that, they know who you are and can search for your other accounts where you used the same password.

Avoiding Password Reuse

Avoiding password reuse can be challenging because of the number of websites and accounts that require passwords, some of which require updating your password every 30 days.  There are two ways to both avoid password reuse and to ensure any password meets the recommended password complexity requirements.

The first technique is to use a password manager to remember each unique password. Password managers are applications that can be stored on a computer, smartphone, or in the cloud, and will securely track passwords and where they are used. Most password managers can also generate complex random passwords for each account if you choose to do so. As long as the password to access the password manager is sufficiently complex, this technique can be affective. However, if the company running the password manager is compromised (which does happen!) it is possible that all your passwords will also be compromised. If you choose a password manager that is local to your computer or smartphone, that information may be compromised if malware gets on your computer or you lose your smartphone.  When choosing a password manager, ensure it is from a known, trustworthy company.

The second technique is to choose a repeatable pattern for your password, such as choosing a sentence that incorporates something unique about the website or account, and then using the first letter of each word as your password. For example the sentence: “This is my August password for the Center for Internet Security website.” would become “TimAp4tCfISw.” Since a strong password is complex, and includes upper and lower case letters, numbers, and a symbol, this password keeps the capitalization within the sentence, translates the word “for” to the number “4,” and adds the period to include to add a symbol. The vulnerability in this technique is that if multiple passwords from the same user are exposed it may reveal the pattern.

Regardless of how a unique password is chosen, it is critically important that every password is unique. Some companies, such as Facebook, have begun programs to identify password reuse. Facebook’s program to identify password reuse involves monitoring for lists of compromised usernames, emails, and passwords, and attempting to match those to the usernames or email addresses of existing Facebook users. If a match is found Facebook asks the user to reset their Facebook password.

Article sourced from the Desk of Thomas F. Duffy, Chair, MS-ISAC. Republished with permission.

Further advice on choosing a strong, complex password is available in the MS-ISAC Security Primer available at: http://msisac.cisecurity.org/documents/SecuringLoginCredentials.cfm

 

Netteller Password Self-Reset Instructions

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Password Self-Reset Instructions

Anticipate Forgetting Your Password (PIN)
It happens to many of us! But you can reset your Online Banking password yourself if you have forgotten it, or you’re not sure if you remember it correctly.

Please note: If you try the incorrect password three times you will “lock” your account and will need to contact us to release it.

Here are the steps for this process:

1) Set up the reset capability ahead of time: Log into Online Banking as usual, and go to the Options tab.

You will see two lines:
PIN Reset Question
PIN Reset Answer

Create your own question and answer. These will be used to identify you if you ever want to reset your PIN.
For example, your question and answer could be something like:
Q – What is my favorite animal? A – dog
Click “submit”

Now you have the capability of self-resetting your PIN any time you are in doubt, without logging into Online Banking.

OK, you’ve forgotten your password, or you’re not sure you remember it correctly!

1) Go to the usual login page and enter your ID (or alias that you have created)

2) To the right of the PIN entry box you’ll see the text “Reset Password.” Click on this text.

3) You will next see a screen asking for your Online Banking ID (or alias), the e-mail address you have on file via Online Banking; and a subject line that you create.

4) You will then receive an email alert from do-not-reply@fmbankva.com with wording as follows:

“You have requested that your Internet Banking PIN be restored. To confirm this request, please click here.”
This link will be valid for two hours.

5) After following the “click here” link you will be directed to enter your Online Banking ID and the answer to your security question. Be sure to click this link within two hours, as it will expire.

6) Once done, the PIN will reset to the last 4 digits of your tax ID# (Social Security number). You can then begin the process of logging in again using these 4 digits as your PIN, and then create a new PIN of your choosing.

 

Online Banking Browser Requirements

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F&M Bank’s Online Banking program supports the latest version of Safari, Chrome, Internet Explorer and Firefox. Each time a new version of these browsers is released the bank encourages you to update your internet browser for the best online experience.

 

Financial Considerations Before Traveling Abroad

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Financial Considerations Before Traveling Abroad
The number one most important step to take is to notify your bank of your intended travel plans. Not doing so may result in the freezing of your debit card. Our clients’ security is a number one priority for us at F&M Bank, so if we see someone using your account outside of your normal activities, we are going to take precautions to protect you against fraud.

Traveling abroad can be full of excitement and fun, but it takes a decent amount of preparation.  It is important to research hotel ratings, the best price in airfare, and tips for packing appropriate attire; but don’t forget to make sure you make financial preparations as well.


There are many financial considerations to take into account before embarking on your trip.  You will need to consider security, foreign transaction fees, and exchange rates- and you will want a financial plan in place before take-off.

The number one most important step to take is to notify your bank of your intended travel plans.  Not doing so may result in the freezing of your debit card.  Our clients’ security is a number one priority for us at F&M Bank, so if we see someone using your account outside of your normal activities, we are going to take precautions to protect you against fraud.  Simply call your bank branch and your Customer Service Representative will be glad to assist you by putting an alert of your travel plans on your account to avoid any complications.

At F&M Bank, we do not charge additional fees for using your debit card internationally.  However, you will likely be charged foreign transaction fees (usually ranging from 1% to 5%) and ATM fees by the vendor you are using to withdraw funds.  Additionally, many foreign ATMs only allow PIN transactions, so make sure you have your PIN number handy before traveling.  

Here are some other suggestions to keep in mind:  

•    Travel with at least two forms of payment.  If something goes wrong with one, you will want back up.
•    Take photocopies of all of your important documents including your passport, credit cards, debit cards, birth certificate and driver’s license and store them in a different location than the documents themselves.  This way, if something happens to the originals you will be able to prove your identity. 
•    Check your health insurance to make sure you will be covered while you are traveling.  If not, consider purchasing a rider. 
•    The most expensive place to purchase currency is in the airport at your destination.  Consider exchanging money through an international bank prior to departure.
 

If we can answer any questions to help you prepare for your next travel adventure, please contact us.  We are always here to help as Your Community Bank.  Bon voyage!

4 Simple Steps to Stop a Cyber Thief

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F&M Bank Raises Awareness for Data Privacy Day Jan. 28
Timberville, VA – In recognition of National Data Privacy Day on Jan. 28, F&M Bank is urging customers to take an active role in protecting their data. F&M Bank’s first priority is to protect our customers’ money and information,” said President and CEO Dean Withers. “We use a combination of safeguards to protect our customers’ information, and we encourage our customers to partner with us in that effort.”

PRESS RELEASE
FOR IMMEDIATE RELEASE

January 23, 2015

4 SIMPLE STEPS TO STOP A CYBER THIEF
F&M Bank Raises Awareness for Data Privacy Day Jan. 28

Timberville, VA – In recognition of National Data Privacy Day on Jan. 28, F&M Bank is urging customers to take an active role in protecting their data.

F&M Bank’s first priority is to protect our customers’ money and information,” said President and CEO Dean Withers. “We use a combination of safeguards to protect our customers’ information, and we encourage our customers to partner with us in that effort.”

To help ensure the safety of personal information, F&M Bank suggests following these four tips:

•    Create c0mplic@t3d passwords. Avoid birthdays, pet names and simple passwords like 12345. It is also important to change passwords at least three times a year. Because friendly theft – theft by someone the victim knows – is the most       common type of identity theft or fraud, don’t share your passwords with family members and be mindful of who has access to your personal information.

•    Keep tabs on your accounts. Check account activity and online statements often, instead of waiting for the monthly statement. You are the first line of defense because you know right away if a transaction is fraudulent. If you notice unusual or unauthorized activity, notify your bank right away. When a customer reports an unauthorized transaction in a timely manner, the bank will cover the loss and take measures to protect the account.

•    Stay alert online. Be sure computers and mobile devices are equipped with up-to-date anti-virus and malware protection. Never give out your personal financial information in response to an unsolicited email, no matter how official it may seem. Your bank will never contact you by email asking for your password, PIN, or account information. Only open links and attachments from trusted sources. When submitting financial information on a website, look for the padlock or key icon at the top or bottom of your browser, and make sure the Internet address begins with “https.” This signals that your information is secure during transmission.

•    Mobilize your defenses. Use the passcode lock on your smartphone and other devices. This will make it more difficult for thieves to access your information if your device is lost or stolen. Before you donate, sell or trade your mobile device, be sure to wipe it using specialized software or using the manufacturer’s recommended technique. Some software allows you to wipe your device remotely if it is lost or stolen. Use caution when downloading apps, as they may contain malware and avoid opening links and attachments – especially from senders you don’t know.

Tips for Victims:
If you are a victim of fraud and suspect your personal information has been compromised, you should take the following steps:

•    Call your bank and credit card issuers immediately so they can take necessary steps to protect your account.
•    File a police report and call the fraud unit of the three credit-reporting companies.
•    Consider placing a victim statement in your credit report and a fraud alert on your account.
•    Keep a log of all the contacts you make with authorities regarding the matter. Write down names, titles, and phone numbers in case you need to re-contact them or refer to them in future correspondence.
•    Contact the FTC’s ID Theft Consumer Response Center at 1-877-ID THEFT (1-877-438-4338) or www.ftc.gov/idtheft.

Data Privacy Day commemorates the 1981 signing of the first legally binding international treaty dealing with privacy and data protection. It is led by the National Cyber Security Alliance, a non-profit, public private partnership focused on cyber security education for all online citizens.

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>>Visit F&M Bank’s Identity Theft Protection Services page