Community Broker News and Views

Go Beyond the Annuity Myths

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

“They’re too complicated.”

“They’re only for old people.”

“The fees are outrageous.”

“Any extra money you have goes to the insurance company when you pass away.”

Annuities are among the least known of financial vehicles, but often drive the most intense feelings from those who do know about them. They seem to be shrouded in mystery, myth, and even misunderstanding.

So what exactly is an annuity? And are the myths and misconceptions true?

An annuity is a financial product offered by an insurance company that provides a steady stream of income for a person over a set period of time, or for life. Because of the benefit of providing a steady stream of income, annuities are commonly used for retirement.

Despite the misconception, annuities aren’t really all that complicated. You can make a lump sum investment or multiple investments and then, after a specific timeframe, or immediately, if desired, you receive a stream of income for a set period of time, or for life, depending on the annuity.

A popular alternative in today’s financial climate.

With the volatility in today’s financial markets, the low deposit rate environment, and the pressure on Baby Boomers facing retirement, many people are taking a second look at annuities. And with these compelling annuity benefits, it’s easy to see why:

Unlimited contributions. Unlike an IRA, there is no limit to the amount of money you can contribute to an annuity.
Tax-deferred growth. Money invested in an annuity grows tax-deferred until it is withdrawn.*
Protection from market volatility. One only has to review recent stock market activity to understand this benefit from a fixed annuity product.
Competitive rates. An annuity can provide a greater rate of return than many CDs, particularly in today’s low-rate environment.
Guaranteed income. One of the biggest attractions of annuities is that they pay a guaranteed return until the annuitant (the person who gets the income) dies or thereafter depending on the type of annuity.
Bypassing of Probate. If you leave funds in an annuity to your beneficiaries, they won’t have to deal with the time and expense of Probate. In addition, funds in annuities generally can’t be accessed by creditors.

Annuities now offer another benefit that made them less attractive to investors in the past – liquidity. Annuity holders can take advantage of flexible riders that allow them to customize their investment to their unique needs and financial situation. DNB First Wealth Management, for example, offers annuities that will let you take advantage of improved market conditions and choose different death benefit options. In addition, we can ensure that any fees never come from the benefit your annuity generates.

Though annuities offer many benefits, it’s important to note that they aren’t for everyone. At DNB First Wealth Management, we’d be happy to review your situation to determine if annuities may be right for you. We’ll do what’s in your best interest. That’s no myth.

* Consult a professional tax advisor regarding your individual tax situation.

More Secure Purchasing Will Soon Be In Your Hands

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

The stories vary. One might involve a dishonest waitress or employee who secretly writes down your credit card information. Another could be a crook who bumps into you with a skimming device that reads the magnetic strip on the debit card in your wallet. Or, there might be a data breach with a retailer.

However it happens, the result is always the same — your debit or credit card is compromised, resulting in the loss of money and something even more valuable – your sense of security.

Fortunately, there’s a new generation of card technology that’s coming to America to help prevent credit and debit card theft – EMV^TMcards. Coined after the initial sponsors of the technology – Europay, MasterCard, and Visa – these “smart cards” are debit cards that contain microchips that make purchasing even more secure. When inserted in a special merchant EMV terminal at the point of purchase, these cards generate a unique one-time code. This code makes it impossible for thieves to duplicate your card.

Though this technology is relatively new in America, EMV cards have already been used in other countries around the world, including Canada, the United Kingdom, and Mexico. Many financial institutions have already or will soon replace cards with the new technology.

Here are some important things to know about EMV cards:

The technology only works with special EMV card readers. If you have a debit card equipped with the EMV technology, the added level of protection, i.e., the unique one-time code, will only be generated at merchant locations equipped with EMV terminals.
To use an EMV card at a point of sale, you must dip your card rather than swipe into the terminal slot. This allows the terminal to read the chip and may result in a slightly longer wait time.
If a merchant does not have an EMV terminal, you can still swipe your card and use it as you normally would.
If you’re a merchant and accept credit and debit card payments, switching to the new EMV technology will allow you to reduce your company’s liability.

In the coming months, we at DNB First will begin issuing new EMV cards to our cardholders. It’s just another small way that better, more secure banking will be in the cards for you.

http://www.creditcards.com/credit-card-news/emv-faq-chip-cards-answers-1264.php

The Gift of Life Insurance

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

Anyone who is a parent can tell you: parenting changes you in many ways.

One of the most obvious is an intense desire to care for and protect our children. We want to be sure we’re always there to provide the things they need during their different stages of life. But when they reach adulthood, we experience a change in thinking:

We want to protect and care for our children when we are no longer here.

Fortunately, there’s a very simple and proven solution that makes that goal possible: a solution that many people don’t fully understand or use to their advantage.

It’s called life insurance.

According to a 2015 study by Life Happens and LIMRA (the Life Insurance Market Research Association), “more than 40% of Americans don’t have life insurance.” What’s more, those who do have it are often underinsured and know they need more.

One of the biggest reasons for underinsurance is the perception that life insurance is “too expensive.” And when people are worried about meeting their monthly bills today and saving for retirement tomorrow, they may view life insurance as an additional expense they don’t need.

What they should understand, according to Rick Weber, Managing Director of DNB First Wealth Management, is that “ life insurance isn’t expensive for what it can offer you, mainly peace of mind. It can help a person preserve and create wealth, particularly in this low interest rate environment.”

An example of the gift of life insurance.

Weber cites one type of program as an outstanding example of the power of life insurance. The program is designed for clients looking to gift funds they don’t need for retirement to their loved ones. It allows participants to make a single premium payment and get up to two and half times that in the form of a death benefit. For example, if they put $100,000 into the policy, their beneficiary could receive upwards of $250,0000 upon their death. (The precise amount of the death benefit depends upon selective criteria such as age, gender, health and tobacco use.) The program also provides the flexibility for the policyholder to cash out the principal amount at any time without penalty. In addition, the death benefit is free from federal taxes, as well as the Pennsylvania inheritance tax.

To learn more about this program and others offered, call DNB First Wealth Management at 484-359-3531.

Home Equity Line or Loan? It’s Your Call.

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

It happens the moment you decide to become a homeowner; you’re flooded with a series of questions and decisions. What type of home are you looking for? Where do you want to live? What mortgage term should you choose? Unfortunately, the questions don’t cease once you become an actual homeowner.

That’s also true when you make the decision to borrow from the equity in your home and apply for home equity credit. From the start, you’ll be asked to make one very important decision:

Do you want a home equity line of credit or a home equity loan?

Know your home equity options.

Before you decide, it’s important to understand the difference. A home equity line is actually a revolving line of credit that works very much like a credit card. You borrow what you need over time and only pay interest on the money you use. As you repay the money you owe, it becomes available to you again. The important thing to remember is that the interest rate you’re charged is variable, so the amount you owe can change each month.

A home equity loan is different in that you’ll receive the funds in a lump sum. Another key difference is that the interest rate on a home equity loan is set for a fixed term. You’ll pay the same amount each month for the entire term of the loan, making budgeting easier.

Finding the right home equity solution for you.

Which choice is best? The answer, of course, depends on you. Or more specifically, the reason you need to borrow. If you need to borrow to make a one-time purchase – to consolidate debt or purchase a car– a home equity loan could be a better choice. If you want the flexibility to borrow over time to pay for ongoing expenses, such as college tuition bills, you could choose a home equity line.

Choose your lender carefully.

Home equity rates vary by lender, so be sure to shop for competitive rates. At DNB First, we’re currently offering special low rates on both lines and loans, but they’re only available for a limited time. To learn more, visit our website or stop by your nearest branch for a consultation with your banker, who can help you make you the right choice.

Decisions, Decisions, (Mortgage) Decisions

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

To buy a home or not to buy a home? That is the question.

If you choose the former, your real estate professional will instantly hit you with a barrage of pressing questions:

Which city or town?
How many bedrooms?
Will you buy or build?
House or condo?
How much can you afford?

Once you find your new home, you’ll be faced with more difficult decisions including one of the most important ones:

What kind of mortgage do you need?

To answer that, you’ll want to pose questions of your own to your mortgage lender:

What type of loans do they offer? For example, if this is your first home, you may want to know if they offer first-time home buyer programs or affordable mortgage programs that offer more flexibility with credit and down payment requirements. Also, find out what terms they offer on both fixed- and adjustable-rate mortgages.

What are their rates? The lender must be able to tell you the annual percentage rate (APR) on a particular mortgage, which will reflect the interest rate, points, and fees they charge.

How much must you put down on the home? Most lenders require a down payment of anywhere from 3% to 5%. Keep in mind, however, that if you put less than 20% down, you may be required to pay private mortgage insurance (PMI), which increases the amount of your monthly payment.

What are the qualifying guidelines? In order to ensure you qualify for a loan, you should know the income, employment, credit, and other guidelines the lender requires. Keep in mind that some programs and lenders offer more flexible underwriting requirements. You should also ask the lender what documentation they require as part of the application process.

Will there be a prepayment penalty? In order to reduce the amount you owe on your mortgage, you may want to pay more than is required each month. You should check with your lender beforehand to ensure they don’t charge penalties for prepayment.

Here to help.
At DNB First, our knowledgeable mortgage loan officers can answer all your inquiries and help you find the perfect home. No question.

Time to Focus on Your Business

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

It’s long been said that running a small business is not a 9-to-5 job. Yet, even with the long hours you work when you own a business, there never seems to be enough time to get everything done. Somehow you’ve got to find time to handle customer service issues, supervise employees and vendors, and even manage your website and technology. And that doesn’t even include one of the most critical and arduous tasks of running a business – your everyday banking.

But while you can’t always add hours to your workweek, you can open up valuable time in your day by managing your banking more efficiently. Here are some smart services that will not only help you do that, but will also give you greater control of your finances:

Online and mobile banking. If you’re too busy to get to the bank, bring the bank right to you with online and mobile banking. You can view account balances and make transfers, request stop payments and perform other functions quickly and easily. You can even assign multiple users and access levels to allow you to delegate banking responsibilities to your employees.

Online bill payment. Paying invoices each week takes up valuable time that could be better spent on building your business. With online bill payment, you can pay and receive bills automatically. You can even schedule recurring bill payments to occur automatically, saving you the time of writing checks, addressing envelopes, and making trips to the post office.

Remote deposit. Do you receive check payments from your customers? Instead of driving to the bank or ATM to deposit them, you can deposit them right from your office with remote deposit, using the Internet and a special scanner.

Mobile deposit. If you receive a lower volume of checks, you can deposit them in a snap using mobile deposit and a camera on your smartphone or other mobile device.

Payroll services. One of the most time-consuming tasks for business owners is processing payroll. Outsourcing payroll can reduce the hours you spend on calculating pay to minutes. Another big advantage of outsourcing payroll is that it allows you to tap the expertise of payroll providers who understand tax laws and can help you avoid costly tax penalties.

Business debit cards. If you need to make purchases, a business debit card is a great way to save time at the point of sale. You can even request cards for employees and assign spending limits. Then, you’ll have a record of all your company’s purchasing to make expense tracking and tax preparation easier.

Take the time to learn more.
DNB First offers these and other services to help you save time and take control of your finances. Talk to us today to learn more; it’s time well spent.

5 Ways to Get More Bang for Your Banking Buck

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

Summer wouldn’t be summer without fireworks. But there’s another way you can experience a big bang this summer — by reducing your banking fees. Here are some smart and easy ways to lower fees and get more banking “bang for your buck.”

Eliminate costly checking accounts. Why pay a fee to access your own money when you can take advantage of free checking? Many banks promote free checking, but require you to maintain high minimum balances or to jump through transactional hoops. Be sure to read the fine print.
Leverage your banking relationships. If you have multiple accounts – checking, savings, and loans — take advantage of a relationship checking package. These accounts let you pool balances to earn special rewards, such as better rates and fee waivers.
Avoid overdrafts. One of the biggest expenses people face in their day-to-day banking is paying overdraft fees. According to a report from the Consumer Financial Protection Bureau, consumers paid $34 billion in service charges in 2012, with a staggering 61% from overdraft fees. In fact, if you’re not careful, a $2 cup of coffee can cost you as much as $35 in overdraft fees. The best way to protect yourself is to get overdraft protection, by linking your savings account to your checking account or by obtaining a line of credit. If you have online banking, you can also sign up to receive email alerts that notify you when your balance is low.
Pay more than the minimum due on credit cards. If you have a credit card, you probably know that interest charges can be costly. The best way to avoid them is to pay off your balance in full before you even accrue interest. If that’s not possible, always try to pay more than the minimum balance.
Watch ATM fees. While it’s great to be able to get cash wherever you go, it’s not worth it if you end up paying costly ATM surcharge fees, which can range between $2 to $4 per withdrawal at some banks. Try to use ATMs within your bank’s network, or get a checking account that offers rebates when you use other banks’ ATMs.

Take the time to review your banking fees and to implement these smart tips. You may end up with even more money in your pocket to have fun or, in the spirit of summer…have a blast!

The Future of Banking: It’s Still Personal

by Vince Liuzzi
Executive Vice President and Chief Banking Officer, DNB First

Technology. It’s constantly changing the way we live – and bank. Where we once took out our checkbooks in the grocery line, today we’re swiping debit cards. Where we once trekked to the bank to make deposits, we’re now making them in a snap from our smartphone cameras.

There’s no question, banking is changing in ways many of us never thought possible. And it’s not just banks that are the catalysts for this change. With services like Apple Pay and Google Wallet, which let you use your mobile device to pay for purchases, technology companies are putting new ways to transact into consumers’ hands. And that brings up an important question:

Will you even need to have a bank in the future?

In short, the answer is yes. Banks offer a very significant benefit that these technology companies can’t – a relationship. Maintaining a relationship with a bank will allow you to –

Access a range of financial services – under one roof. Technology companies may bring you the latest innovations, but they can’t do something banks do very well – offer multiple financial services in one place. Banks can provide you with checking, savings, mortgage, even retirement solutions – allowing you to simplify your financial life and leverage relationship benefits.
Get personal service. Technology companies are great on convenience, but often not so great on service. Smaller technology companies, in particular, usually operate with fewer staff, which means if you encounter a problem or have a question, you can’t get assistance as easily as you could from your bank. And when it comes to something as important as your money, getting personal assistance is critical.
Be protected. Banks understand the importance of protecting your account and personal information and are vigilant about dedicating resources and staff to ensure the highest level of security. Knowing you’re with an institution that’s dedicated to guarding your money can help you sleep better at night.

The bank of the future.

The good news is that having a banking relationship in the future doesn’t mean you have to sacrifice technology. The optimal solution is to choose a bank that’s dedicated to investing in technology and partnering with technology companies to deliver the high level of convenience you want without sacrificing the protection and personal service you need.

At DNB First, for example, our customers can access a full range of financial services that allows them to bank when and where they want. If or when they need assistance or guidance, they can simply pick up the phone or visit one of our branches for personal service. And let’s face it, no matter where technology takes us in the future, the importance of that will NEVER change.

A Lesson in College Financing

by Vince Liuzzi
Executive Vice President and Chief Banking Officer
DNB First

If you’re a parent, you already understand that raising kids is not cheap. You probably also know that with soaring tuition costs, providing your child with a college education may be one of your greatest financial challenges. The truth is, however, that most of us don’t fully understand the shocking impact of educational costs until the first tuition bill arrives.

Or maybe you do. Take out a number two pencil and test your knowledge by answering the following question:

According to the College Board, what was the average cost of tuition and fees during the 2014-2015 school year?

a) $31,000 at a private institution
b) $9,131 at a public college for in-state residents
c) $22,958 at a public college for out-of-state-residents
d) All of the above

If you answered, “d) all of the above,” you’re correct and probably have had a little education of your own in college costs. Of course, that question is not so challenging compared to the most pressing one of all:

How can you finance your child’s education?

The good news is that there are some good options available, which include:

Financial Aid/Grants/Scholarships. Even if you think your child may not qualify for Financial Aid, it’s important to at least apply. You can do so by filling out the Free Application for Federal Student Aid or FAFSA (as it’s commonly known) at https://fafsa.ed.gov. There are also a number of grants and scholarships available, so it pays to research them and have your child apply for as many as they can.
529 Plans. Created by Section 529 of the Internal Revenue Code, these college savings plans provide a tax-advantaged way for you to save for your child’s education. With 529 plans, earnings are not subject to federal taxes when used for qualified educational expenses, such as tuition, books, and room and board.
Home equity credit. If you’re a homeowner with equity in your home, you can obtain a home equity line of credit. A home equity line provides the benefit of potential tax savings (consult your tax advisor) and the ability to borrow and repay funds over time.

Of course, the college financing option that’s right for you depends on your unique financial situation. That’s why it’s important to research all the available options, and practice what you preach to your own children: “Do your homework.”

Your First Move When Buying a Home

by Vince Liuzzi
Executive Vice President and Chief Banking Officer
DNB First

It’s “the one.”

You knew it the very second you saw it, and that you had to have it.

It’s everything you wanted and so much more.

It’s your perfect home.

You excitedly make your offer to purchase it, only to discover that there’s one problem standing between you and its welcoming front door – others want it, too.

Unfortunately, this is an all-too-common scenario for prospective home buyers shopping in today’s competitive real estate market. They come across the home they desire in the perfect location and find themselves competing with other buyers.

There’s one simple step you can take to put yourself in a better position to win any home buying competitions you may face – get pre-approved for a mortgage before you start shopping for a home.

One of the smartest moves you can make.

With a mortgage pre-approval, a lender evaluates and reviews your credit and financials to determine if you can actually qualify for a mortgage and the amount you can borrow. A pre-approval differs from a mortgage pre-qualification in that the lender actually verifies your financials, whereas a pre-qualification is simply a calculation based on the numbers you provide.

A mortgage pre-approval offers a very important benefit: it tells a seller that you can afford to buy their home, giving you a powerful negotiating edge. Pre-approvals also allow you to –

Proceed to closing faster. Since your credit and financial information has already been verified, you’ll save time.
Focus your home search. If you’re pre-approved for a mortgage before you start your home search, you can narrow your focus to homes in your price range.

What you’ll need.

Qualifications vary by lender, but in general, you’ll need to provide the following financial information to get pre-approved for a mortgage:

Income and employment verification. Self-employed individuals may need to provide additional documentation.
Bank account information
Tax returns
Information on your outstanding credit/loans

Free pre-approvals under our roof.

As an experienced mortgage lender, DNB First provides free pre-approvals as well as expert guidance every step of the way in the home buying process. Talk to us today; it just might get you in the door to that perfect home.