Thursday, March 24, 2011

Milwaukee Offers Grant Money for First-time Homebuyers

Did you know that there are grant programs available in Milwaukee to help families buy their first home?

If your family income is 80 percent of the Milwaukee County median income requirements ($45, 500 for a family of two; $56,900 for a family of four), you may be eligible for as much as $5,000 in forgivable grant money to put towards a down payment and mortgage closing costs. Standard qualifying is required; however the money is typically forgiven on a pro-rated basis in five years.

As Milwaukee’s lead lender in affordable housing, PyraMax Bank participates in every grant and government loan program available in the city, including WHEDA, FHA, and Veteran loans. We can help families determine if they are eligible for any grant money currently available based on income and where they want to live.

Any grants or loans require the potential home buyer to participate in homeowner education classes. The education is provided by a third party and not the bank. PyraMax has partnered with some of the best agencies in Milwaukee who provide these courses, including Select Milwaukee and HBC Services.

The homeowner education course is six to eight hours of classroom study. The course educates potential homeowners about the entire homebuyer process to make sure families are not purchasing more than they can afford. Participants draft a purchase document and go through the financing process to determine the best loan available. Families also go through the home inspection process, home insurance and property appraisals to determine the value of the property.

Community banks have not made the same mistakes as some of the big out of town banks. PyraMax helps families find loan or grant programs that are best for them and the community. This mission has served the bank well for more than 115 years. If you think you may qualify for a first-time homeowner grant or loan, stop by any of our offices to speak to a loan officer or ask for our community development coordinator, Gary White.

Gary White
Phone: (414) 235-5107
Cell: (414) 747-0894
Fax: (414) 235-5540

Monday, January 10, 2011

What are the benefits of an HSA?

A tax-exempt Health Savings Account (HSA) may be one of the best ways to protect individuals and small business owners from rising health care costs. If you are employed, self-employed or otherwise, you can invest in a tax-advantaged medical savings account if you have a high deductible health insurance plan (HDHP) of $1,200 or more.

The benefit for employees is also lower premiums and more control over what you spend on qualified health expenses. The new health care reform bill has made some changes to HSAs starting in 2011. The money you save each year can no longer be used to buy routine medical items like over-the-counter medications and other medical-related things like contact cleaning solution. It has to be used for prescriptions and insulin. Much like an IRA, if the money withdrawn from an HSA is used for anything other than a qualified medical expense, the money withdrawn is now subject to a penalty in addition to paying the applicable income taxes. The penalty changes from 10 percent to 20 percent in 2011.

The money you contribute to an HSA has triple tax advantages. The contributions are pre-tax, any interest earned is tax exempt and withdrawals are tax-free as long as the money is spent on qualified medical expenses. Individuals can make contributions even if they don’t itemize their tax deductions and employer contributions are not counted as income.

Another benefit of the HSA is that individuals who remain healthy and don’t have to pay any medical expenses can grow the money in their account from year to year. Over time, HSA contributions of more than $10,000 can be directed to long-term investments like mutual funds to maximize the value of the HSA.

For 2010 and 2011, the maximum can you can contribute to a Health Savings Account is a $3,050 for individuals with self-only coverage and $6,150 for individuals with family coverage.. The IRS allows individuals over the age of 55 to make a “catch up” contribution of an additional $1,000 for single and family plans.

HSAs are typically managed by banks, credit unions, or insurers. An employer can also set up an HSA for employees. It pays to shop around to see what various institutions offer and what they charge to administer an HSA account. Some banks offer higher interest rates, but charge fees for every transaction you make Fees can eat up any money earned in interest. They may also require you to make a minimum contribution each month to avoid additional fees. Some other fees to watch out for are charges for setting up an account, checks, online bill payment and check cards.

When determining an administrator, make sure the financial institution is FDIC-insured. It is the individual's responsibility to keep track of deposits and expenditures. From time to time, questions may arise about an account, so it may be helpful to deal with an institution that’s close to where the individual lives live or works like a community bank. PyraMax Bank offers one of the most competitive HSAs in the country.

An HSA is something the individual owns. Whatever money is invested stays with you no matter where you work or which insurance company insures your company. You can grow the money and after age 65, use the contributions to pay for Medicare premiums. At age 65, you can also use the money to pay for things other than medical expenses. Any money withdrawn is considered taxable income, but you are not subject to any penalties.

Proponents of HSAs say this form of savings for medical expenses makes people wiser consumers, because they have the freedom and flexibility to make your their own health care choices. Individuals can spend the money or save it. It’s the consumer's choice.