Miller Mortgage, LLC: Home Buying and Refinancing Loans at Low Rates in MA, NH, & CT

2014-03-12T09:47:00.001-04:00

Buying Is Cheaper Than Renting

When browsing Forbes.com, we came across this interesting article. According to Trulia’s chief economist Jed Kolko, “homeownership is 38% cheaper than renting nationally.” However, the percentage varies based on where you live, your tax bracket, and other factors. For more information, read the full article here.

If you are deciding whether to rent or buy, our Miller Mortgage experts can help. Call us @ 877-538-7967 or visit our site.

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Miller Mortgage, LLC is an independent mortgage refinancing, mortgage conversion loans, jumbo mortgages, up to 95% financing and some of the lowest mortgage rates in New England.

For more information visit Miller Mortgage LLC or contact us at (978) 535-1822 in MA, or Toll Free at 877-538-7967

2014-03-06T12:45:00.001-05:00

Attention Self Employed!

If you have had income issues qualifying for a mortgage, then NOW is the time to plan. Miller Mortgage has been able to approve self employed clients with only 1 year tax return! If you think your mortgage should be refinanced for a lower rate, lower payment, cash out, lower term, etc., then call Miller Mortgage representative @ 877-538-7967 and learn how much you need to show on this year's Return in order to qualify.

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Miller Mortgage, LLC is an independent mortgage refinancing, mortgage conversion loans, jumbo mortgages, up to 95% financing and some of the lowest mortgage rates in New England.

For more information visit Miller Mortgage LLC or contact us at (978) 535-1822 in MA, or Toll Free at 877-538-7967

Mortgage Broker or Local Bank?

2013-12-16T21:26:00.000-05:00

A mortgage broker works with a variety of lenders to find loans for clients. Brokers are not tied to a particular lender; they have the ability to shop around on behalf of their clients. This is especially important for those borrowers who want a niche loan: Jumbo, ARM, low down payment, credit scores below 640, etc.

Mortgage brokers offer specialized knowledge about mortgage products and work on your behalf to get you the most competitive mortgage rates without any hassles or negotiation on your part. Brokers search the marketplace and assist you in selecting the right mortgage product for your needs based on your application and financial details.

The biggest advantages of mortgage brokers are certainly the variety of programs, flexibility, service, and knowledge. Brokers are able to identify the most appropriate program for the specific circumstances of a borrower. Brokers handle all the paperwork and interactions with the institutions. This savings of time, work, and stress is a big factor for many individuals who retain a mortgage broker.

Obtaining a mortgage through a bank can have some downsides. Traditional banks have less mortgage options, are more conservative and selective, and generally do not have a mortgage oriented staff like a mortgage broker does; after-all, the local banks are focused on a lot of deposit related accounts above mortgages. Finally, the rates at a local bank are generally worse than you’ll find at a mortgage brokerage.

In summary, if you still need the comfort of walking into your bank to pay your mortgage, then you may not mind paying more and sticking to a local bank. But if you are content sending a check to or setting up automatic withdrawal with national mortgage servicer, then definitely shop a mortgage broker!

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Miller Mortgage, LLC is an independent mortgage refinancing, mortgage conversion loans, jumbo mortgages, up to 95% financing and some of the lowest mortgage rates in New England.

For more information visit Miller Mortgage LLC or contact us at (978) 535-1822 in MA, or Toll Free at 877-538-7967

Drum Roll Please…

2013-10-25T13:16:00.002-04:00

Over the last few months the Miller Mortgage team has been diligently working to enhance our client experience with our website. We are now eager to introduce our newly designed and improved website. You will find lots of helpful features, such as our Get Connected with Miller Mortgage, LLC page where we encourage you to engage with us and other clients. Also, make sure to keep an eye out for our Resources page where you can find helpful calculators and checklists to ease the home buying or refinancing process. Hope you enjoy the site and welcome and feedback you might have! Please send your feedback to cmiller@millerhomelending.com.

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Miller Mortgage, LLC is an independent mortgage refinancing, mortgage conversion loans, jumbo mortgages, up to 95% financing and some of the lowest mortgage rates in New England.

For more information visit Miller Mortgage LLC or contact us at (978) 535-1822 in MA, or Toll Free at 877-538-7967

Miller Mortgage has Gone Social!

2013-10-24T13:10:00.000-04:00

We are proud to announce that we are in the beginning stages of our social journey to stay connected with past customers, new customers and everyone else in between. Be sure to connect with us to receive the latest mortgage industry updates, past client testimonials, contests and much more! We also have been working very hard customizing our new website and hope you all enjoy the ease of the new look and feel. We encourage you to connect with us and join our social community’s conversations!

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Miller Mortgage, LLC is an independent mortgage refinancing, mortgage conversion loans, jumbo mortgages, up to 95% financing and some of the lowest mortgage rates in New England.

For more information visit Miller Mortgage LLC or contact us at (978) 535-1822 in MA, or Toll Free at 877-538-7967

Government Updates

2013-10-20T21:40:00.000-04:00

Check out our latest email campaign "Government Updates" to keep you informed about the market. Send a comment or email me at cmiller@millerhomelending.com.

Join the Miller Mortgage Social Community

2013-10-20T21:33:00.002-04:00

Get connected with Miller Mortgage, LLC. Check out our Miller Mortgage, LLC Social Community!

Are you a smart home buyer?

2011-11-09T09:30:00.000-05:00

There are always a few areas we can use help in of course. If you need help finding a mortgage, or determining the best mortgage for your budget, contact us at 877-538-7967 or use the form HERE for more information.

How to Be a Smart Home Buyer

When home values are slipping or going sideways, being a smart buyer can make all the difference.
The "American Dream" of homeownership turned into a nightmare after 2008. Big mortgages, job losses and plunging home values left many buyers over their heads in debt and struggling to stay afloat. But buying a house can still be a great experience if done for the right reasons through a process with a clear plan and open eyes.

Buy cheap. You'll make more money down the road if you buy a home that's as much as 30% or 40% below the bubble-era prices in your area.
Add up all the costs ahead of time. Insurance, property taxes, homeowners' association fees and other bills can stretch your budget on top of a mortgage payment. Be sure you can afford it all.
Can you handle the indirect costs? Not all the costs are evident. Will you need another car because you aren't near public transportation? Will you be paying more for gas? Will you need lawn care? Pool maintenance? Extra furniture to fill the empty spaces?
Don't forget the intangibles. Will it be worth it if you have such a long commute that you leave the house in the dark and return in the dark, never seeing the kids awake? Will you need a full-time sitter because you and your spouse are working so hard to afford the house? The right house should relieve your stress, not add to it.
Separate your wants from your needs. Aim for a good structure in a good neighborhood that is a good fit for you and your family.
Forego the fancy stuff. Most people don't need a hot tub, a two-person shower, two dishwashers or a master suite the size of a basketball court. Stick with the basics.
Weigh your future needs. When you consider how much you can pay, don't forget the other parts of your financial life that need attention. You'll still need to save for retirement, pay for the kids' college and take vacations, and you'll need to have enough financial flexibility to do that.
Manage your mortgage. Recognize your house for what it is: an expensive installment-plan purchase that may pay you back down the road.
Speed up your payments. A typical home today will end up costing $1 million in principal and interest over 30 years. You can cut your interest costs way down if you pay extra principal every month as you go along.
Consider sharing the burden. Buy a two-family house or a home with a room or an apartment you can rent out. Use those rental payments to help pay your mortgage off faster. Then use the proceeds from that house to buy the dream house you want, freeing up your cash for additions to your retirement fund and other savings.
Skip the extra loans. If you need to renovate or remodel, pay cash. And do as much work yourself as you can, which will generate huge savings.

What not to do...

Don't fall into the trap of thinking your home is something more than a place to put up your feet and let down your hair.
Don't treat your house as a piggy bank. It's not a cash machine, or an investment fund or a retirement nest egg. So don't borrow against your home equity to pay off credit cards or go on vacation.
Don't splurge on renovations. If you remodel the kitchen to look like Home & Garden or add a bath or bedroom, do so because you want it or need it, not to make a profit or to increase the value of the home. Most renovations are money losers because they don't add enough to the home's value to cover their cost.
Don't move around. Staying put is the best way to build equity in your home, especially at time when home values are still slipping or going sideways. Most people stay in their homes just seven years, paying far more in interest than principal and then they buy a new house and start the mortgage clock all over again. If you stay put, you'll build equity the old-fashioned way, by paying off your debt.

When and Why Suze Orman Suggests You ‘Quit Paying’ Your Mortgage

2011-11-04T12:08:00.001-04:00

Sometimes the best thing you can do is to walk away from your mortgage. Suze Orman discusses when and why you should do that below. If you would like to discuss finance options for your next or first mortgage, contact Miller Mortgage at 877-538-7967, or use the contact form HERE for more information.

Underwater Mortgage? Why Suze Orman Recommends You Quit Paying

October 18, 2011
By Casey Bond

As home prices continue to plummet and unemployment remains a huge problem, more and more homeowners are turning in the keys to their homes and refusing to make any more payments on their mortgages. However, walking away from an underwater mortgage, known as strategic default, has long been a subject of controversy and often viewed as highly irresponsible– until now.

In the wake of a collapsed housing market and sluggish economic recovery, a few noted finance authorities, including Suze Orman, have actually come out and recommended the practice of strategic default.

So, how can a supposed finance expert condone walking away from a financial obligation and purposely ruining your credit and reputation as a borrower? According to Orman, it comes down to a simple calculation.
The Suze Orman Guide to Strategic Default

According to Orman, you should stick it out and continue to pay off your mortgage if your home is 10-20 percent underwater. However, if the balance on your mortgage is 20 percent greater than the value of your home or more, it isn’t worth paying off.

Step one should be to ask your lender to modify the loan and reduce the principal owed.

If they refuse, which they likely will, your next course of action is to ask for a short sale. If they don’t agree to that, try a deed-in-lieu of foreclosure.

Still get a “No?” Orman says you should walk away at this point, and you shouldn’t feel bad about it since you asked your lender for help and they refused.

Private Label Mortgage Market to Get Boost

2011-10-28T09:30:00.000-04:00

If you are looking for a mortgage in CT or MA, contact Miller Mortgage now at 877-538-7967 or use the contact form HERE for more information. Let one of our mortgage professionals help you find the right mortgage for your needs.

The Treasury's Smart Plan to Get the Government Out of Home Financing
Once upon a time, when the housing market was thriving, investors loved mortgages. They didn't care if they were prime, subprime, privately financed, or government-backed -- their love seemed unconditional. Investors threw so much money at housing that a gigantic bubble inflated. But then, it popped. Investors got burned: the mortgages they trusted turned out to be poisonous. Billions of dollars in losses from toxic securities nearly killed the investors. So the relationship ended on very bad terms. Even now, most investors will only look at mortgage securities if they're disguised as Treasuries. But the Treasury reportedly has a pretty slick idea to get these estranged lovers together again.
How Do You Jumpstart a Dead Market
Right now, the government backs something like 90% of new mortgages. Back when the housing market was thriving, private label mortgage-backed securities -- those not backed by the government -- were responsible for funding roughly 40% of mortgage originations. Three years after the crisis, the private label market remains virtually dead.
How do you restart it? You could take a simple sink-or-swim approach: the government could just cut the amount of mortgages it will back. But this is a dangerous move, as the housing market remains very weak. If mortgages become more expensive or even harder to get, then prices might fall faster -- even below wherever their nature bottom should be.
But banks are only funding most mortgages because they know that the government will provide them financing through Fannie Mae, Freddie Mac, or the Federal Housing Authority. With their guarantee, those mortgages can be passed on to investors who are happy to take on the debt, since it's backed by the U.S. Without the government's promise to provide a guarantee, banks won't fund as many mortgages, because investors won't want them.
The Treasury's Plan
This is where the Treasury comes in. Default risk isn't going to stand in the way of the government buying mortgages; after all, it's backing most of them anyway. It doesn't expect -- or need -- investors to take on this risk as a condition of financing. But it could make it worth some investors' while to take on the default risk of some mortgages. This would kind of get them reacquainted with mortgage risk. That's essentially the plan.
In particular, the Treasury may push Fannie and Freddie to create some mortgage-backed securities that do not provide a government guarantee. They would provide a higher-than-usual bond yield to investors who are willing to purchase them. That will compensate those investors for the default risk that they would be taking on.
Do you see what happened there? The sticking point in restarting the private mortgage-backed securities market is that lenders are scared to sell mortgages to borrowers without the government guarantee in place. So the government will buy some mortgages and strip off its guarantee. It can then test the market by seeing what bond yield investors will demand to buy those mortgages.
The resulting bonds would effectively be private label mortgage-backed securities sold by the government. It might seem like a strange idea, but it could be the kick in the pants that the market needs to realize that the prime mortgages being originated today are actually a pretty good investment -- even without the government's backing.
Could Anything Go Wrong?
The only foreseeable problem here is that the government could end up losing a little money on these mortgages. It charges lenders a guarantee fee when it backs a loan. That guarantee fee will presumably serve as most of the money used to pay the extra yield to compensate investors for buying mortgage securities without a government guarantee. If the bond yield paid to investors turns out to be greater than the guarantee fee plus the interest received from the mortgages, then the government will lose money on the transaction.
This probably shouldn't be too serious of a concern. If investors demand too much bond yield so that the government would lose a significant amount of money on the transaction, then the program will likely just fade away. But if the government does lose a small amount of money on a successful implementation of the program, then it could be worth the cost. If this is what it takes to jumpstart the private mortgage financing market, then paying a little extra now could save taxpayers a lot of money in the long run as their mortgage exposure begins to decline.

Jean Chatzky on Reverse Mortgage Industry

2011-10-26T19:04:00.001-04:00

If you are looking for a mortgage in CT or MA, contact Miller Mortgage now at 877-538-7967 or use the contact form HERE for more information. Let one of our mortgage professionals help you find the right mortgage for your needs.

Jean Chatzky: Reverse mortgage industry has changed

Between earthquakes, hurricanes, the nation's credit downgrading and general government dysfunction, it's hard to keep up with all the headlines these days, so file this under news you may have missed: There have been some changes in the world of reverse mortgages. As this is a topic we've covered previously, I thought you'd want to know.

Here's the deal: Wells Fargo and Bank of America, the two biggest providers of these loans, have left the market. A reverse mortgage, as you might remember, allows people age 62 and older to turn their home equity — often their biggest asset — into cash. Unlike other loans, a reverse mortgage doesn't have to be repaid until the borrower moves out of the home or passes away.
So why did these lenders abdicate the business? Clearly, this wasn't a profit center. Bank of America spokesman Terry Francisco said the bank wanted to put resources into helping distressed homeowners.

"There are people who need loan modifications or short sales to avoid foreclosure, and we had a need to have more personnel involved in that effort," he said. "We had 600 people dedicated to originating reverse mortgages, and we saw a greater need to shift those people to helping homeowners."

Wells Fargo issued a statement indicating that unpredictable home values were the chief reason for its departure. The reverse mortgage program "was designed in a different economic time," the statement said.

The bigger question is, what does this mean for you?

Business as usual — sort of.

If you have a Wells Fargo or Bank of America loan, those companies will continue to service it — you'll see no change whatsoever. If you want a reverse mortgage, there are plenty of other smaller players who are still in the game, ready to absorb the demand for these loans.

• More product choices. As of October, borrowers have the option to reduce closing costs on reverse mortgages through a program called HECM Saver, which reduces your initial mortgage insurance premium. Essentially, you'll receive a lower payout in exchange for paying 0.01 percent of the loan amount up front, instead of the standard 2 percent — a savings of thousands of dollars.

Your payout will be reduced by 10 to 18 percent, depending on your age, if you choose this option, says Peter Bell, president and CEO of the NRMLA.

When is this a good option? I posed that question to AARP, which has done a lot of research — and provides a lot of education — on reverse mortgages.

"The HECM Saver can be a better option for people who want to borrow a smaller amount of money for a short period of time, since the upfront mortgage insurance premium costs are lower and the amount that can be borrowed is smaller than a standard HECM," says Mary Liz Burns, an AARP spokeswoman. Keep in mind, though, that interest rates and origination fees on HECM Saver loans may be higher.

• Still a last resort. "A consumer considering borrowing against their home should ask themselves if they really need, understand and can afford a reverse mortgage and whether they have any less costly options," says Burns.

A home equity loan or line of credit, for one. (Rates are averaging 3 to 4 percent, and that's before the tax deduction.) Or maybe it's time to trade down and move to a smaller space or a less expensive neighborhood. If you're intent on keeping the home, can you rent out a room? Get creative.

• Counseling required. This has long been part of the reverse mortgage process, and it's a great protection for borrowers: You must get counseling before taking out one of these loans.

"The lender has to provide a list of five third-party counseling agencies within the state, as well as four national intermediaries that HUD has given authority to provide counseling on a nationwide, telephone basis," explains Bell, the NRMLA president. "This is a good check to see if the lender is doing things right — if they steer you to a specific counselor, that's a red flag."
AARP also has a helpful brochure, "Reverse Mortgage Loans: Borrowing Against Your Home" on its website, www.aarp.org.

How to Use the Current Housing Market to your Advantage

2011-10-14T13:03:00.000-04:00

If you’re ready to buy a home, there may be no better time than now. With falling interest rates reaching 4% recently, and the article below discussing the bottom of the housing market finally being reached, now may be the best time to consider purchasing a home.

If you need assistance with a mortgage in MA, CT, or RI, contact Miller Mortgage LLC at 877-538-7967, or use our contact form HERE for more information on financing your next mortgage.

The Housing Market is Finally Bottoming – Here's How to Play It
October 3, 2011
By Martin Hutchinson, Global Investing Strategist, Money Morning

The housing market remains a drag on the economy, but there are indications that it is finally starting to bottom.

Prices have stopped declining, and there is even some sign of life in sales.

Not all the news is good, of course. New home sales dropped still further in August from July, falling to a pathetic 295,000 annual rate compared to the 1 million-plus in the good years. And housing starts fell to an annual level of 571,000 from 601,000 in July - that's 12% below their August 2010 level.

Still, this is to be expected. The new home sector should be the last to turn up. There is a massive overhang of existing homes, both through foreclosures and through suppressed sales from homeowners that are "under water" on their mortgages and can't afford to sell.

With the exception of a very few markets - such as North Dakota (4% unemployment and new jobs appearing from the Bakken oil shale) and the overstuffed bureaucrat haven of Washington and its surrounding suburbs - there should be very few new homes built for the next several years.

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In the early part of the downturn, production was inflated by the big homebuilders' land banks. But no sensible homebuilder has been expanding its land holdings for four years, so that pressure is much less.

The pressure of existing housing inventory overhang eventually will wear off, and homebuilding will accelerate again - but that's probably several years off. In the interim, there is some demand for apartments, as the rental market is picking up, so sensible homebuilders are concentrating most of their efforts on that sector.

The recent good news came in the form of prices. The S&P/Case-Shiller 20-city index in July rose marginally for the fourth straight month, suggesting that the long decline may have ended.

More importantly, existing home sales rose 7.7% to a seasonally adjusted annual rate of 5.03 million - 18.6% above the August 2010 level. The average sales price was down 5% from the previous year, closely tracking the 4.1% year-over-year fall in the July Case-Shiller index.

Meanwhile, the inventory of unsold homes fell by 3% to 3.58 million homes, which now represents 8.5 months of supply.

This is what you would expect at the bottom of the market. Break Here: To continue reading, please click here...While the market for new homes remains weak, the market for existing homes expands as buyers are attracted by the available bargains, especially in the foreclosure market. The price decline slows, while the working off of inventory and price stabilization increases market confidence.

The only negative factor in the picture is that mortgage rates are still close to their all-time lows. Thirty-year fixed-rate mortgages fell to an average of 4.01% in the week ending Sept. 29, down from 4.09% the previous week. The average rate on 15-year fixed-rate loans last week fell to 3.28%. Both are the lowest levels since the Federal Home Loan Mortgage Corp. Freddie Mac (OTC: FMCC), Freddie Mac, began keeping track.

That's close to the level of inflation and far below the levels that would prevail in a free market absent the influence of the Federal Reserve's lax interest rate policy and the government's home mortgage guarantees. If mortgage rates had risen while home prices were still above their long-term average (in terms of earnings) they would have held back the housing market. However, with houses cheap in most markets, they will have less impact.

The other hopeful sign for the housing market is an uptick in rentals. August's consumer price index showed a 0.4% rise in rent levels, following a 0.3% rise in July. This corroborates anecdotal evidence of rent increases around the country.

This, too, is to be expected. The home ownership rate has declined sharply in the last five years, and people have to live somewhere. A strong rental market will both boost prices and help absorb the inventory of unsold homes. Owning rental housing in areas such as North Dakota, with sound economic fundamentals and low unemployment, thus looks attractive.

The implications of stability in the housing market are very positive for the economy as a whole. If the U.S. falls into a "double dip" recession, the second dip will be a shallow one as the majority of consumers who have jobs gain confidence and push the economy into recovery.

For investors, it's too early to buy housing stocks. However, apartment real estate investment trusts may be attractive, with rentals rising, interest rates low, and construction focused on this sector.

Valuations in the sector are on the high side, with many companies paying dividends in excess of earnings, but Equity Residential (NYSE: EQR), with a 2.5% dividend yield well covered by earnings, looks to be a good value. And AvalonBay Communities Inc. (NYSE: AVB) began construction on $800 million worth of new developments in 2010, which is a smart strategy. Its 3% yield, which will be well covered once its new projects come on stream, also adds to its attraction.

Still, as an investor more used to lower price/earnings (P/E) ratios, I have to say the sector looks too pricey for more than a small flutter.

New Mortgage Lows as Interest Rates Plunge Below 4 Percent

2011-10-10T12:46:00.002-04:00

If you’re one of those people who have been saving your money, tending to your credit, and biding your time over the last few years waiting for mortgage rates to be at their lowest, your time has come. Rates on 30-year fixed-rate loans are coming in below 4% now, and making this the perfect time to buy a new home if you’re ready to do so.

Miller Mortgage LLC can answer your mortgage questions and discover a program with the best terms and rates for you quickly with a simple call to one of our professional agents at 877-538-7967 or use the contact form HERE for more information

Mortgage rates drop to once unthinkable lows at less than 4%

by E. Scott Reckard
September 23, 2011

The Federal Reserve's latest step to prop up the economy means that 30-year fixed-rate loans are available for less than 4%. But many people are in no position to buy or refinance a home.

The Federal Reserve's latest effort to prop up the economy has dropped mortgages into once unthinkable territory, with 30-year fixed-rate loans available for less than 4% — a record low.

For people lucky enough to still have their credit ratings, bank accounts and home equity in good shape, the change means the opportunity to refinance at rates that once seemed unimaginable.

"I can remember when I thought 7% was a great loan," said Roger Hornbaum, a retired city of Orange employee who has already refinanced his home on California's Central Coast twice since purchasing it last year. "After the news this morning, maybe I'll be getting another call from [my mortgage broker] and be trying it again sometime soon."

Hornbaum's broker, Jeff Lazerson of Laguna Niguel, said clients who pay closing costs and a 1% fee to him are refinancing into 30-year fixed-rate loans at 3.75%.

Of course, these days many people are in no position to buy or refinance a home. Many can't meet the stringent lending standards that have prevailed since the housing bust and bank bailout, or they owe so much more than their house is worth that they can't get a new loan at a better rate.

"The phone is ringing off the hook with people who want to refinance," said loan officer Darin Hardin at Premier Mortgage Group in Ladera Ranch. "But the property values just aren't there."

The record low rates are driven by the Fed's announcement Wednesday that it would load up on purchases of long-term government bonds and mortgage securities. The extra demand was intended to drive down long-term interest rates, including those for home loans — and it worked.

The yield on the 10-year Treasury bond, which serves as a benchmark for fixed mortgages, had closed at 1.94% on Tuesday. By the end of the day Wednesday it had dropped to 1.86%, and it plummeted Thursday to 1.72%, setting a record low before rising again Friday to 1.83%.

For a 30-year fixed-rate mortgage, the typical rate for solid borrowers had been 4.09% last week and early this week, according to mortgage finance giant Freddie Mac. That's within a whisker of the record low of 4.08% set in 1950 and 1951. The Fed's action dropped it well into record territory.

Mortgage professionals said many companies were making loans slightly more expensive Friday because their loan pipelines were full of more refinance requests than they could easily handle.

Provident Funding, a lender that concentrates on borrowers with solid credit, said on its website Thursday that it could refinance a $300,000 loan on a $450,000 home in Los Angeles County at 3.875% and hand back $3,000 to the homeowner to help with closing costs. On Friday, the rebate on the same loan had dropped to $1,875.

But should the 10-year Treasury yield stay low, there appears to be room for mortgage rates to fall further, industry experts said.

Refinancing mortgages at lower rates should help stimulate the economy by putting more spending money in borrowers' pockets. Lowering the rate on a 30-year $350,000 mortgage to 4% from 5.5% would cut payments by about $3,800 a year.

Mindful of that fact, the Obama administration is trying to encourage greater use of a program that allows borrowers with loans backed by Freddie Mac and Fannie Mae to refinance up to 125% of their home's value. The borrowers must have kept payments current on the underwater loans to qualify.

According to the Mortgage Bankers Assn., more than three-quarters of all home loan applications are now for refinances, although the volume is more of a boomlet than a boom. As rates sank toward 4% recently, borrowers were refinancing their loans at about half the pace seen in early 2009, when rates cracked the 5% barrier for the first time since 1956.

Jay Brinkmann, chief economist for the mortgage trade group, said the torpid housing market had produced few new purchase loans in recent years that would be good candidates for refinancing. What's more, many people already have refinanced at rates less than 4.5% or simply never intend to replace an old loan.

"We'll have to see what happens this week with the [latest big] rate drop," Brinkmann said. "Until a few weeks ago, rates were just back to where they were this time last year."

Meantime, mortgage borrowing to finance home purchases continues to lag despite the record low rates and home prices that in many areas are down more than 30% from their 2006 peaks. Plenty of families are too stressed out financially to buy. Others are leery that housing prices, which rose a bit in the second quarter, could crater again in a double-dip recession.

With a 1-year-old daughter, Joseph and Allison Dillard would normally be prime candidates to stop renting and buy a house.

He is a software engineer and she has a master's degree in mathematics that should allow her to find work when their daughter is older. They have saved enough money for a 20% down payment on a single-family home in Mission Viejo or Laguna Hills, or perhaps a town home in Irvine, she said. And they have been pre-approved for a loan through Hardin, the Ladera Ranch mortgage banker.

Having looked at homes off and on since early this year, the Dillards stepped up the search this month after Joseph settled into a better new job at Google Inc.'s offices in Irvine. But they haven't taken the plunge into ownership.

"The mortgage rates are so low but we're worried, because we don't know much further housing prices will fall," said Allison, 30. "We're trying to gauge the potential risks and benefits."

In any case, the Dillards figure, the economy's precarious state means they'll have at least another year before interest rates rise significantly.

"It doesn't seem like they'll be jumping up any time soon," she said. "So that's not motivating us to do anything right away."

MA and CT Mortgages at Miller Mortgage LLC

2011-10-05T10:54:00.002-04:00

While the government seeks ways to uplift and support the housing market, take the time to evaluate your credit, and seek out reputable lenders for your next home loan. If you need help with your finance options, contact Miller Mortgage LLC at 877-538-7967 or use our contact form HERE for more information about mortgages in MA and CT.

Fed Shifts Bond Portfolio, Resumes Mortgage Buys

September 21, 2011
WASHINGTON -- The Federal Reserve on Wednesday took another unconventional step to boost an economy flirting with recession, saying it would increase its share of longer-term Treasurys by $400 billion by June 2012 in an effort to make credit cheaper and spur spending and investment.

In another step aimed at helping the beleaguered housing sector, the central bank said it would reinvest the proceeds from maturing agency debt and mortgage- backed securities into mortgage-related debt. Until now, it had reinvested those in government bonds.

Three out of 10 voting officials opposed the action at the conclusion of a two-day meeting of the Fed's policy making body--the Federal Open Market Committee--highlighting continued divisions within the central bank as it tries unorthodox new ways to help the economy.

The moves came just a day after Republican leaders in Congress took the unusual step of urging the Fed to do nothing in a letter to Fed Chairman Ben Bernanke, fearing any action could do more harm than good.

Worried about inflation, Richard Fisher of the Dallas Fed, Narayana Kocherlakota of Minneapolis and Charles Plosser of Philadelphia dissented Wednesday. Those are the same officials who opposed the FOMC's Aug. 9 decision that made a conditional pledge to keep short-term interest rates near zero until mid-2013.

Right now, however, concerns inside the central bank about high unemployment and weak economic growth are trumping fears that inflation may take root or that the dollar could fall further as a result of the Fed's easy-money policies.

Fed officials said in a statement that "recent indicators point to continuing weakness in overall labor market conditions" and that "the housing sector remains depressed." No jobs were created in August, the unemployment rate was stuck at 9.1%, and jobless claims data points to continued weakness.

The Fed said inflation seems to have moderated as the effects of high commodity prices and supply-chain disruptions from Japan's earthquake earlier this year have waned. The central bank also noted that inflation expectations have remained stable.

As part of its plan to purchase more long-term securities, the Fed said it would sell $400 billion of Treasurys with remaining maturity of less than three years and buy the same amount of government bonds with maturities greater than six years. Almost 30% of the purchases will be aimed at Treasurys maturing between 20 and 30 years.

The move increases the average maturity of the Fed's Treasury portfolio to just over eight years by the end of 2012 from a little over six years now, the central bank said.

While the Fed acknowledged the sale of short-term securities could put upward pressure on short-term rates, it said the impact is expected to be small because of the conditional pledge it made last month that near-term rates will stay near zero until mid-2013.

The idea behind the plan is that holding more long-term debt will put downward pressure on long-term rates, allowing people to get cheaper mortgages and companies to finance their operations at better rates. It has been dubbed " Operation Twist," a reference to a similar program tried with mixed results by the Fed and the U.S. Treasury in 1961.

Resuming purchases of mortgage bonds for the first time since March 2010, meanwhile, indicates how concerned most Fed officials are about the economy's growth prospects.

"It's a sign that we're still in an emergency environment," said Jim O'Sullivan, chief economist at brokerage MF Global. Fed officials will "continue to ease if the economy continues to disappoint," he added.

The Fed is trying to ease financial conditions without taking the more controversial step of increasing the amount of money that it is pumping into the financial system, since it will be using money already generated from other programs. A bond buying program the Fed completed in June was widely criticized internally and externally because it pumped $600 billion of newly printed money into the financial system, sparking fears of inflation.

House Speaker John Boehner (R., Ohio), Senate Minority Leader Mitch McConnell (R., Ky.), and two other Republican leaders Tuesday warned Fed officials that " further extraordinary intervention" could be damaging for the economy. Their comments follow criticism of Bernanke and the Fed's policies by several Republican presidential candidates.

The more potent step of launching a new round of bond purchases that would further expand the Fed's $2.867 trillion balance sheet remains a possibility, but inflation likely would need to slow much further to spur Fed officials to take that step.

The Fed moves come at a pivotal time for the economy, which slowed to a crawl in the summer. It is now being threatened by spillovers from Europe's deepening debt troubles, lingering woes in the U.S. housing market and the U.S. government's inability to craft a fiscal policy that reduces deficits in the long-run while supporting the recovery in the short-run.

Economists polled by The Wall Street Journal see a one-in-three chance the U.S. will slip into recession again over the next year, the highest odds since the recovery began in mid-2009.

The Fed said there are "significant downside risks to the economic outlook, including strains in global financial markets."

The International Monetary Fund Tuesday slashed its 2012 growth forecast for the U.S. to 1.8%, from a 2.7% prediction made in June report. In a report kicking off its annual fall meetings, the global lender warned the U.S. economy could remain weak for years, describing a stalled recovery in need of another push from government.

Though the moves were a bit more aggressive than analysts expected, it wasn't seen as the kind of game-changing program that could dramatically turn the economy around, a conclusion that was reflected in the stock markets Wednesday. The Dow Jones Industrial Average finished the day down 283.82 points, or 2.49%, at 11,124.84. Some of the Fed's moves were already well anticipated and may have been seen as a chance by some investors to unwind trades.

However, yields on 10-year Treasury notes fell to 1.86%, their lowest level on record going back to 1977, which was one effect the Fed was hoping to have. The central bank's move to keep more of its portfolio in mortgage bonds "should pull our rates down" too, said Lou Barnes, a mortgage banker at Premier Mortgage Group in Boulder, Colo.

-By Luca Di Leo, Jon Hilsenrath and Jeffrey Sparshott, Dow Jones Newswires;

Bank of America Answers to SEC

2011-10-05T07:02:00.000-04:00

If you are looking for a mortgage in MA or CT, or would simply like to have more information regarding your mortgage refinance options, contact Miller Mortgage at 877-538-7967 or use our Contact Form HERE for more information.

B of A Learns No Good Deed Goes Unpunished
William M. Isaac

At year end 2010 Bank of America had $2.3 trillion in assets, $230 billion of capital, 57 million customers, ranked among the top firms in nearly every major growth market in the U.S., employed 288,000 people, made $150 billion of community development loans a year, donated $200 million to charity annually, and was one of the largest home lenders in the nation.

You might know that B of A acquired two giant firms — Countrywide and Merrill Lynch — during the 2008 crisis. What you might not know is that these acquisitions were done without government aid.

If you are a shareholder of B of A, particularly one with a short-term horizon, you are likely unhappy with the acquisitions. But as a citizen and taxpayer you should be very thankful that B of A stepped up to the plate in the dark days of the financial crisis.

As bad as the crisis was, imagine how much more serious it would have been had Countrywide and Merrill Lynch failed. Countrywide was one of the largest home lenders in the country and Merrill Lynch was the largest investment banking firm. Alternatively, imagine how expensive it would have been for government to provide assistance to resolve those firms.

After completing due diligence on Merrill Lynch in late 2008, B of A concluded that Merrill was in worse shape than anticipated and considered abandoning the deal. Then Secretary of the Treasury Henry Paulson threatened that B of A would regret walking from the deal.

B of A's reward for doing the deals was to be summoned to Congress to explain why senior folks at Merrill Lynch were allowed to receive contractually agreed bonuses at the end of 2008. The Securities and Exchange Commission piled on with an enforcement action claiming the bonuses were not properly disclosed in proxy materials.

Merrill Lynch has proved profitable to B of A, but Countrywide has been very painful. The issue at Countrywide is not so much losses on mortgage loans, but litigation. Other banks find themselves in similar positions, including Wells Fargo which acquired Wachovia (which itself had acquired troubled mortgage lender Golden West Financial) and JPMorgan Chase which acquired Bear Stearns and WaMu.

B of A has been defending tens of billions dollars of legal claims arising primarily from real estate loans at Countrywide and Merrill. Even the Federal Reserve Bank of New York joined the fray, claiming to be duped in its purchase of mortgages.

Having to defend litigation by private parties is unavoidable. B of A's management might be forgiven for assuming that the government would be grateful enough for B of A's acquisition of these two giant problems to go easy on asserting claims against Countrywide and Merrill.

But no good deed goes unpunished. A recent suit against 17 large banks by the Federal Housing Finance Agency involves some $200 billion of loans purchased from the banks by Fannie Mae and Freddie Mac. B of A’s share is $57 billion, mostly related to Countrywide and Merrill. The suit is particularly egregious in that Fannie and Freddie virtually abandoned underwriting standards and embarked on a two-decade long lending binge that was a major contributor to the real estate bubble and collapse.

In addition, B of A and other major banks are facing suits by 50 state attorneys general seeking to reform their foreclosure policies. This has slowed foreclosures to crawl and delayed cleaning up the housing mess.

Bank regulatory agencies have taken enforcement actions against the banks requiring them to conduct massive reviews of their mortgage loan files and foreclosure processes. The banks are spending billions and chewing up scarce personnel resources.

The government says creating jobs and turning around the housing industry and the economy are its highest priorities, but its actions indicate very high priority is being given to punishing the banking industry.

We cannot have a strong economy without a strong banking system. Punishing the banks for political purposes brings to mind a remark credited to Churchill: "Holding a grudge is like drinking poison and expecting the other person to die." It's noteworthy that B of A recently announced it will reduce its workforce by 35,000 people.

We have wasted the past couple years pursuing a mindless vendetta against the banking industry, even though very few banks had anything to do with creating the crisis and most are victims of it. It's past time for government to put the crisis behind and make job number one helping the private sector get back to work.

William M. Isaac, former chairman of the Federal Deposit Insurance Corporation, is senior managing director and global head of financial institutions at FTI Consulting, chairman of Fifth Third Bancorporation, and author of "Senseless Panic: How Washington Failed America." The views expressed are his own.

Fannie Mae Mortgage Servicing Explained

2011-09-23T10:05:00.001-04:00

Understanding the terminology involved in mortgage financing will go a long way toward helping you get the best mortgage for your situation. If you need help finding a mortgage for your first or second home, a refinance, or any other kind of real estate financing situation, contact the mortgage experts at Miller Mortgage at 877-538-7967 or use our contact form HERE for more information.

Six Questions on Fannie’s ‘Mortgage Servicing’ Deal

By Nick Timiraos

Rep. Darrell Issa (R., Calif.) accused Fannie Mae of providing a “backdoor bailout” of Bank of America when it purchased certain mortgage assets from the Charlotte, N.C.-based lender last month.

Mr. Issa issued a press release announcing an investigation last week and fired off a letter to the regulator of Fannie Mae, the Federal Housing Finance Agency. After all, why would Fannie Mae have spent about $500 million, according to last month’s WSJ report, to buy what are known as “mortgage servicing rights” from Bank of America?

Here are six questions to help break down a complex transaction that is poorly understood:

What is mortgage servicing?

If you take out a mortgage from Wells Fargo or Citi, you’ll receive a monthly bill from that bank and mail in regular payments to Wells or Citi. But Wells and Citi don’t usually hold onto those loans after they make them. Instead, they’re often resold to a company like Fannie Mae or another firm that will package the loan with others that are then sold off to investors as securities. Wells and Citi are what’s known as mortgage servicers—middleman that collect payments from borrowers and set aside taxes and insurance premiums in escrow.

Just as Fannie doesn’t originate loans, it also doesn’t handle the day-to-day loan processing, or what is known as “servicing.” Instead, Fannie relies on hundreds of companies, but particularly a few big banks like Wells and Citi, to handle this loan servicing.

Why does mortgage servicing have value?

Wells, Citi and other servicers collect a small fee every month for all the loans they service. That means the “right” to service these loans—or the “mortgage servicing rights”—have some value to the bank. It’s an asset that can be bought and sold on the open market. Beyond that, banks can cross sell other products to customers whose mortgages they service.

What did Fannie buy from Bank of America?

Fannie didn’t buy any actual mortgages in this transaction. Instead, it bought the rights to service around $73 billion in mortgages that it already guarantees.

Why would Fannie pay Bank of America for the rights to service mortgages that it already guarantees?

Simple: to sell them to a servicer that will do a better job collecting payments. Fannie facilitated the transfer of those servicing rights—buying them from BofA in order to finance the sale to one or more specialty servicers that are specifically set up to process more troubled loans. Fannie Mae can make up the cost of the servicing transfer if the new servicers do a better job minimizing losses on those mortgages.

Since the mortgage bust, some servicers have been overwhelmed by the volume of defaulted loans, which can be harder and more expensive to manage than loans that regularly make payments. If servicers don’t do a good job servicing those loans for Fannie, that’s bad for Fannie because it may lead to bigger losses.

Mr. Issa, in his letter to the regulator that oversees Fannie, warned that the transaction shifted more risk onto Fannie. Why would that be the case?

It’s hard to see how Fannie could take on much more risk here. The company already owns the risk on these mortgages if they default. If the quality of servicing on these loans is poor, Fannie loses. (And since Fannie is being supported by massive government aid, taxpayers lose, too.)

Edward DeMarco, the acting director of the FHFA, said Monday that the “business transaction made sense for both companies” and that there was “adequate and appropriate” review of the deal.

A Fannie spokeswoman wouldn’t discuss the particulars of last month’s servicing transfer, but said in a statement, “Fannie Mae does not directly service loans but has a history of facilitating transfers of portfolios to high touch servicers in an effort to mitigate credit losses.”

Why is there political outrage over this?

Fannie and its sibling, Freddie Mac, are backed by taxpayers, and everything they do is therefore subject to extra scrutiny. This isn’t the first time that lawmakers have inveighed against a potential “backdoor” bailout of BofA courtesy Fannie.

Rep. Issa posed a dozen questions to Mr. DeMarco, but many of them miss the mark. More reasonable questions to ask regulators here might be these: Did Fannie get a fair deal when it paid to move the servicing of loans it already guarantees? Fannie has contracts with its servicers that govern how they must approach the day-to-day collection of loan payments—at what point can Fannie simply take the servicing from BofA (without inviting a lawsuit)? Were those initial contracts between Fannie and BofA (or Countrywide, which BofA acquired in 2008) written in a way that put Fannie at a disadvantage once mortgage defaults mushroomed?

Believe it or not, home sales are up

2011-09-21T13:26:00.003-04:00

If you are interested in buying a home in MA or CT, and would like help from a professional with mortgage financing, contact us at 877-538-7967, or use the contact form HERE for more information.

Sales of U.S. Existing Homes Rise 7.7%, Beat Forecasts
Shobhana Chandra
September 21, 2011

Sales of previously owned U.S. homes rose more than anticipated in August as investors used cash to buy distressed properties.

Purchases of existing houses, which are tabulated when a contract closes, increased 7.7 percent to a five-month high 5.03 million annual rate, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 4.75 million rate.

While foreclosure-driven price declines and record-low mortgage rates are preventing a renewed slump in sales, companies like Lennar Corp. (LEN) say weaker consumer confidence and limited access to financing are restraining demand. Concern over housing and the economic slowdown may prompt the Federal Reserve today to propose new measures to shore up the recovery.

“Housing’s been down for so long, we should take whatever good news we can get,” said Brian Jones, an economist at Societe Generale in New York, whose forecast was among the highest in the Bloomberg survey. “Interest rates are low and pricing is attractive and people are responding.”

Forecasts in the Bloomberg survey of 74 economists ranged from 4.5 million to 4.99 million.

Stocks and Treasuries were little changed after the figures, with the Standard & Poor’s 500 Index rising less than 0.1 percent to 1,202.88 at 10:14 a.m. in New York. The benchmark 10- year note yielded 1.94 percent.

The median price of a previously owned home dropped 5.1 percent to $168,300 from $177,300 in August 2010, today’s report showed.

Compared with a year earlier, purchases increased 19 percent.
Housing Inventory

The number of previously owned homes on the market declined 3 percent to 3.58 million. At the current sales pace, it would take 8.5 months to sell those houses, down from 9.5 months at the end of the prior month.

Month’s supply in the seven months to eight months range is consistent with stable home prices, the group said.

Of all purchases, cash transactions accounted for about 29 percent, the same as in July, Jed Smith, managing director of research at the NAR, said in a news conference today as the figures were released.

Distressed sales, comprised of foreclosures and short sales, in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 31 percent of the total in August, up from 29 percent in the prior month.
Foreclosed Properties

“Investors were more active in absorbing foreclosed properties,” Lawrence Yun, the group’s chief economist, said in a statement. Investors accounted for 22 percent of purchases in August, up from 18 percent the previous month.

Contract cancelations were reported by 18 percent of the group’s members in August, up from 16 percent a month earlier. The cancelations reflected mortgage applications that were refused or because appraised home values were coming in below the sales price, the group said.

Sales of existing single-family homes increased 8.5 percent to an annual rate of 4.47 million, the highest since January. Purchases of multifamily properties, including condominiums and townhouses, rose 1.8 percent to a 560,000 pace.

Purchases climbed in all four regions, led by an 18 percent jump in the West. Demand increased 5.4 percent in the South, 3.8 percent in the Midwest and 2.7 percent in the Northeast.
Housing Starts

The residential real estate industry, which helped trigger the recession, is struggling more than two years into the economic recovery that began in June 2009. Housing starts in August dropped 5 percent to a 571,000 annual rate, the slowest in three months, Commerce Department figures showed yesterday.

Miami-based Lennar, the third-largest U.S. homebuilder by revenue, reported a 31 percent drop in profit in the quarter ended Aug. 31 as sales fell. The housing market remains “challenging,” with “already skittish customers” being driven away by burdensome mortgage-qualification rules, Chief Executive Officer Stuart Miller said on a conference call.

At the same time, home prices that have decreased to attractive levels and interest rates on 30-year loans at record lows are reviving interest among potential buyers, he said.

“Demand remained constrained however by the availability of financing and general consumer confidence,” Miller said on the Sept. 19 conference call. There’s also “evidence that the consumer is beginning to return in earnest to the homebuilding market.”
Builder Pessimism

Most builders remain pessimistic. The National Association of Home Builders/Wells Fargo sentiment index dropped to 14 in September, a three-month low, from 15 in August, the Washington- based group reported this week. Readings less than 50 mean more respondents said conditions were poor. Gauges of prospective buyer traffic, current sales and purchase expectations declined.

Fed Chairman Ben S. Bernanke this month said while the housing sector was a significant driver of recovery from most U.S. recessions since World War II, this time it has fallen short. He cited an overhang of distressed and foreclosed houses, tight credit conditions for builders and potential homebuyers, and concerns by borrowers and lenders about price declines.

“The weakness of the housing sector and continued financial volatility are two key reasons for the frustratingly slow pace of the recovery,” Bernanke said in a speech in Minneapolis on Sept. 8.

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Miller Mortgage, LLC is an independent mortgage refinancing, mortgage conversion loans, jumbo mortgages, up to 95% financing and some of the lowest mortgage rates in New England.

For more information visit Miller Mortgage LLC or contact us at (978) 535-1822 in MA, or Toll Free at 877-538-7967

How can I make getting a mortgage easier?

2011-09-17T07:02:00.000-04:00

Getting a mortgage in today's economy may seem like a wasted effort if you listen to the news or the media at all. While it isn't really any harder than it was say a year or two ago, there are some standard guidelines that will help make the process a lot smoother overall.

The one most important fact that many people looking for a mortgage seem to forget, is that every lender will want to see a substantial amount of financial information and documentation. Going into the lending process without extensive financial documentation, is asking for all kinds of delays, and possibly denial of your mortgage application.

Having a great mortgage professional to help walk you through the process is invaluable. The mortgage team at Miller Mortgage has extensive experience in all kinds of mortgage finance options and can help you locate the best mortgage financing for your unique situation.

Before attempting to obtain your mortgage however, there are some basic documents that you should have pulled together, in a folder, specifically for use in applying for your mortgage.

Legal identification or proof of citizenship, and copy of social security card for all applicants
Proof of employment for at least 3 years, with a career history and income report for a minimum history of 2 years
Self employment two year history and two year business tax returns
Most recent year to date pay stub copy
Two years of tax returns, or two years of W2 forms
Name and address of landlords for the past 2 years, and address of your residence for the same amount of time
Current debt account information including installment loans, revolving charges, student loans, mortgages, and car loans
Current account information for checking and savings accounts, stocks, bonds, etc. with bank statements for at least 3 months

If you are looking for a mortgage in RI, MA or CT, contact Miller Mortgage at (877-538-7967) or use our contact form HERE and one of our helpful sales staff will contact you with more information.

Homes Styles in Salem MA

2011-09-03T11:10:00.001-04:00

Lots of people know all about Salem, Massachusetts as the place where the ‘witch trials’ occurred in the late 1600s, and where there is now a thriving commercial interest in all things ‘witchy’. And while Salem MA is a very beautiful place to live, the entire historic aspect is sometimes overlooked because of the town’s typecast as a witch-haven.

In addition to beautiful 17th century architecture and planning, the homes in Salem MA have historic value beyond the aesthetic. Salem has a growing population of residents in the 30 to 40 year old range with a total population of approximately 42,000, and a median household income of $55,639.

The average home price in Salem MA starts at $150,000 upwards to $300,000 depending upon location, size, and age of the property. Historic homes in Salem however, will sell for much more than that.

Having the right home loan for your new purchase can mean the difference between years of enjoyment and foreclosure; which is particularly important during the first few years of your mortgage, when most homeowners falter. The reasons for this can be varied, but the largest single factor points to having too much mortgage or the wrong mortgage for your financial situation.

The mortgage experts at Miller Mortgage LLC can help you find the right mortgage for your new home purchase in MA or CT, and help you avoid foreclosure later on.

Some very famous historic homes are located in Salem MA, and it is well worth the visit to see the fall foliage or tour a historic home in this area in the fall. Some great resources for tourist information about Salem MA are located HERE

If you find yourself thinking of relocating to Salem MA, or live nearby and are ready to buy your first, or second, home in MA or CT, contact Miller Mortgage LLC at 877-538-7967 or use our contact form HERE for more information.

What is it like to live in Peabody, MA?

2011-08-19T09:25:00.002-04:00

Peabody Massachusetts is a small community of approximately 53,000 residents that rests just outside of Boston, MA. The crime rate for Peabody is nearly half the national average, with nearly two full time officers per resident on the police force.

Unemployment dropped to below 7% with most of the workforce employed in occupations in management and dispatching. Almost 89% of Peabody residents are Caucasian, with the next nearest group of residents at 5% Hispanic nationalities.

The school systems in Peabody, MA have all been ranked at 4 to 5 stars by parents and faculty involved in running the schools. If you are considering a move to Peabody MA, it would be best to research the desired area for school system rankings and test scores on your own. This will give you a clear idea of where the school in the area of your new home will score on several levels.

If you are in the process of moving to Peabody, MA and need temporary lodgings, there are great hotels and lodging all over the city, and of course Boston is less than 20 miles away. If you haven't made a decision about where to buy your first or second home, and need financing, or which areas of Massachusetts and Connecticut would be best for home or vacation residences, contact Miller Mortgage LLC at (978) 535-1822, by email at cmiller@millerhomelending.com, or visit us on the web and use our contact form HERE for more information about your next mortgage.

Length of Employment and Getting a Mortgage

2011-07-27T11:50:00.000-04:00

Many who are interested in buying their first home have questions regarding whether or not the length of their employment is going to make a difference in getting their mortgage. We would say that the length of time you have been in a particular job does have some minor importance, however, a more important consideration is the amount of time you have been in your specific field of work.

There are other criteria that come into play in this situation as well. They are:

How and when are you compensated or paid for the work that you do?

Are you paid sporadically as in a self-employed situation, or consistently under a salary arrangement? The structure of your compensation has everything to do with lenders being able to rely upon your steady income and therefore, steady payments on your mortgage. If you are in a commission based or self-employed situation, you will need to provide more income documentation than under any other circumstance to establish a solid pattern of income over a period of time - typically two years of income verification will be required.

What kind of future prospects do you have?

Whether you are just out of college and starting your new career, or are seasoned and established in your field, the details of your situation will count toward obtaining your mortgage. If you are entering into a field that has a great outlook, or have been offered a solid contractual obligation for employment, you will have a much easier time securing financing than someone who is in a troubled field or has few offers of substance.

What else are you bringing to the table?

If you are carrying little to no debt and have perfect credit, these can be considered 'off-setting' factors. When you can offer something like this to lenders by way of compensation for a change in jobs, or being new to an industry, you will have an easier time obtaining home financing than if you were well established in your field and position with less than stellar credit, and a heavy debt to income ratio.

Refinancing Your Home After a Divorce

2011-07-22T11:48:00.000-04:00

The time following a divorce is often a difficult one financially as what used to be a two-income home, becomes two one-income homes. This can be particularly hard if there is a mortgage involved and it was held jointly by both parties.

The standard procedure of most divorcing couples is to quitclaim the property to the party who will stay in the home. This effectively removes the absent person as an owner of the asset, however, this does nothing to remove them as a joint-owner of the mortgage liability.

The party who will live in the house and pay for it, must then refinance the mortgage to remove the absent party from any further liability associated with the mortgage. This is where most couples have difficulty however, as lenders want to see 18 months at least of clean, on time payments; a great credit history (not a shared history, but an individual history - which is often a problem for married couples as one person's credit suffers while the other keeps the family afloat); and your mortgage must not account for more than 33% maximum of your income.

Because of these criteria, many divorcing couples cannot afford to transfer the ownership and refinance the mortgage immediately following the divorce, and opt instead to leave everything as it is and let the party living in the home pay the mortgage, or put the home up for sale leaving both parties free of the debt and able to buy their own homes in the future. If you have enough equity built-up in your home however, good credit, steady income, and a history of paying on time, you will have no trouble obtaining a refinance loan after your divorce.

For Sale By Owner Financing

2011-06-30T11:32:00.002-04:00

Not all home financing situations come with a clear-cut dotted line to the mortgage lender or financial institution. In these times of foreclosures, and mortgage default, lending needs to be twice as creative to offer home-buyers more than just the standard fare for financing options.

The article below offers some insight into why seller-financing isn’t more popular, and what to expect if you are considering this option.

When the Seller Is the Lender
By MARYANN HAGGERTY
Published: June 2, 2011

MORTGAGE underwriting is tight, and home sellers are anxious to unload properties into a stagnant market — it sounds as if it could be time to consider seller financing.

But such transactions remain rare, according to market participants, largely because of eroding home equity.

In seller financing, the owner of a property holds the mortgage for the buyer, usually for about five years, with a balloon payment after that. For individuals who don’t need all the cash from a sale up front, the arrangement provides interest income, can delay or reduce capital-gains taxes, and gets a property off their hands.

For the buyer without a bank loan, it makes a purchase possible. Such deals were popular in the 1980s when mortgage rates topped 17 percent. (In New York, there have been recent instances of developers’ offering financing, especially in newer condominiums, but that’s a different market dynamic.)

Because a seller who acts as a bank has to be able to clear his own mortgage without the buyer’s cash, he needs equity — that is, he needs to own most or all of the property. Falling home prices in recent years have cut equity dramatically, said Mike Litzner, the owner/broker of Century 21 American Homes, which has 12 offices on Long Island. In this market, “the average seller lost 25 percent of equity from the peak of the market to today,” he said. “That loss of equity makes it harder for the average person to even consider financing.”

Century 21 recently released a survey of its franchisees and salespeople nationally; it found that 89 percent reported some customers’ having difficulty obtaining loans in the last six months.

Seller-financed deals do sometimes pop up, said Neil B. Garfinkel, a Manhattan real estate lawyer. His firm is handling a co-op purchase for a buyer whose mortgage from an institutional lender fell through. There was a quirk in the building’s finances that meant it didn’t meet underwriting standards. The seller stepped in, and it appears the deal will close.

That situation, he said, underlines a question that both buyers and sellers should ask as they consider owner financing: Why won’t the bank put up the money?

For the buyer, that may mean weighing whether the discovery of an environmental problem cools ardor for a house, or whether a low appraisal signals that an offer merits renegotiation.

For a seller who is in a position to provide financing, the biggest concern is whether the buyer is truly creditworthy. “Presumably the seller does not want to end up with the property back,” Mr. Garfinkel said.

Keep in mind that although such a transaction might seem less formal than bank financing, it shouldn’t be treated that way, said Ilona Bray, a lawyer and the co-author of “Selling Your House in a Tough Market,” published by Nolo.com.

“Get ready to really delve in and investigate” the buyer’s finances, she advises would-be sellers. Self-employed people are having a tough time getting mortgages now, even though they might otherwise be good risks. The seller should ask for several years of financial records, plus explanations for any less-than-perfect credit report.

Make sure deeds and other legal papers are filed according to local laws, Ms. Bray said, and ensure that documents lay out exactly how and when payments are due and what the penalties will be for late payments. “This is the kind of relationship where people could feel it’s casual,” she said. It’s not, and everyone involved must understand that defaults can lead to foreclosure.

From the buyer’s perspective, she said, if you’re considering such a deal, it’s probably because you realize you might have trouble securing a conventional loan. If that’s so, get your financial documents in order, and be prepared to ask sellers if they have flexibility. “Everything’s open to negotiation in the real estate world,” she added.

Mortgage Insurance Information

2011-06-30T10:28:00.002-04:00

No buyer wants to have to pay for private mortgage insurance when they buy a new home. Are there ways to get out of mortgage insurance safely? The following article offers some clear and useful advice for dealing with mortgage insurance on your home.

Mortgage Insurance Cancellation: The Myths and Realities

By Brien McMahon
RISMedia, June 3, 2011—When it comes to private mortgage insurance (MI), there are several myths that exist that make buyers reluctant to consider a conventional loan with MI as an option when purchasing a home. One of the more common misconceptions is that cancelling MI is a difficult—not to mention time-consuming—process.

The irony is that the majority of buyers don’t harbor those same beliefs or reservations about an FHA insured loan when, in reality, FHA coverage may be less easily cancelled, or take longer to cancel, than MI.

HPA Makes Cancellation Clearer
When it went into effect as a new federal law, the Homeowners Protection Act (HPA) of 1998—which applies to both FHA and MI insured loans—required lenders and servicers to provide disclosures regarding MI for residential loans obtained on or after July 29, 1999. Prior to this, consumers were responsible for requesting MI cancellation if they met two factors: one, their loan balance was paid down to 80 percent of the property; and two, they had a good payment history.

While many lenders obliged consumer requests to drop MI coverage, consumers had sole responsibility for keeping track of their loan balance.

The HPA established three different times when a lender or servicer must notify consumers of their rights.

At loan closing, lenders must disclose:
• The right to request MI cancellation and the date on which the request can be made
• The requirement that MI be automatically terminated and the date on which this will occur
• Any exemptions to the right to cancellation or automatic termination
• A written initial amortization schedule for fixed-rate loans only

Each year, loan servicers must send borrowers a written statement that discloses:
• The right to cancel or terminate MI
• An address and telephone number to contact the loan servicer for determining when MI may be cancelled

When MI coverage is cancelled or terminated, lenders must send a notification to borrowers stating:
• MI has been terminated, and the borrower no longer has MI coverage
• No further MI premiums are due

Termination of Coverage
Under the terms of the HPA, mortgage lenders or servicers must automatically cancel borrower-paid MI coverage when the mortgage has amortized to 78 percent of the original property value, with all unearned premiums returned to the borrower within 45 days of the cancellation or termination date. This provision also requires that the borrower be current on mortgage payments required by the terms of the loan, and if the loan is delinquent on the date of automatic termination, a lender must terminate the coverage as soon as the loan becomes current.

Cancellation of Coverage
Also under the HPA, a homeowner has the right to request MI cancellation when the mortgage balance reaches 80 percent of the original property value. All payments must be current, meaning a homeowner must not be 30 days late on a mortgage payment within one year of their request, or 60 days late within two years.

However, a borrower can only initiate a cancellation request for FHA based on their prepayment of the loan, and even then, it can only be requested beginning five years after the loan origination date.

With MI, homeowners can request cancellation based on prepayment of the loan, as well as an appraisal. Despite falling property values, it’s possible for homeowners to gain enough equity in their home to request cancellation in less than five years based on a home appraisal.

Why This Matters to Agents
By understanding these rules and what they mean for homeowners, real estate agents can educate their buyers to help them better evaluate all of their home financing options based on facts rather than myths.

This is even more important considering the FHA’s recent price increase, which has reduced buyers’ purchasing power and increased monthly mortgage payments.

First Time Home Buyers Seeing Advantages to Buying Now

2011-06-29T08:19:00.001-04:00

The housing crisis in America has certainly seen its share of ups and downs. Buyers have been cautious, watching homes bought in one month, dropping by tens and even hundreds-of-thousands of dollars in another. Understandably, you may want to ‘wait’ a little longer before making the choice to buy a home in your area, however experts feel that if you are ready financially, have done plenty of research and crunched the numbers consistently, and are ready to choose a solid home in a great area, helping to secure little chance of depreciation, then now is as good a time as any to take the plunge and buy your first house.

It's a buyers' market for homes, but buyer beware
This may be a good time to purchase, but you need to do the math first
By DAVID PITT

Why are so few people buying houses? One of the key reasons is falling prices.

Although lower prices encourage true bargain hunters to look for deals, they can also scare off homebuyers. And, between the two, anxiety is winning.

This spring, home prices in major cities were back to the same levels reported in the summer of 2003. Although prices in several locations are beginning to rise again, even with the increases, housing remains the weakest part of the U.S. economy. Prices won't fully recover until the glut of foreclosures for sale is reduced, companies start hiring in greater numbers, banks ease lending rules and more people get comfortable again with buying a house.

Laura Young and her husband, Andre Gjerde, wrestled with whether a weak housing market was a great opportunity or a serious risk.

"We were keeping an eye on prices hoping to hold out a couple of years to see if they hit bottom," says Young. They were particularly cautious after seeing a relative buy a condo in 2008 only to see its value drop by $100,000.

After sitting on the sidelines the Seattle-area couple took stock of their financial situation: Gjerde, a freelance foreign-language translator, was able to maintain a consistent income during the recession; and Young's job at a public relations agency remained secure. They decided a few months ago to meet with a mortgage banker and start the process.

Ultimately the couple settled on a newly built home in Bothell, Wash., a suburb about 15 miles northeast of Seattle.

They were impressed by the 3-bedroom, 2½-bath home on a corner lot. There had been an outstanding offer on the home but, in a sign of the times, the financing fell through. Young and Gjerde then jumped at the opportunity to make an offer of $325,000, about $5,000 lower than the home's appraised value.

"We felt really fortunate," Young says. "We were just shocked we were able to get that."

Buyers who are ready to enter the market are likely to be hard-pressed to find a better time.

The national median existing-home price for all housing types was $166,500 in May, which was almost 5 percent below the comparable price in May 2010, according to the National Association of Realtors.

Financing is cheap: The average interest rate for a 30-year fixed-rate mortgage is 4.5 percent, slightly above the four-decade low of 4.17 percent reached in November.

What's more, the number of existing homes available for sale remains high with 3.72 million homes on the market in May. A large inventory of homes tends to suppress prices.

Here are some factors you need to think about as you ponder taking the leap: