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1:00

Jason Lilly, CFA, CFP -

Hello and welcome to today’s financial chat. I'm looking forward to taking your questions this afternoon. I am a Chartered Financial Analyst and a Certified Financial Planner practitioner. I have been in the investment management and financial planning field for more than ten years, working with individuals, families, endowments, non profits and municipalities. We can discuss any topics, or questions you may have regarding personal finance. For more information visit www.rocklandtrust.com I can be reached at jason.lilly@rocklandtrust.com

Disclaimer:

Comments made during this program are not intended as specific investment advice. Please consult with your investment professional before making any investment decisions. Opinions expressed in today’s program are the sole opinions of Jason Lilly and not Rockland Trust.

In an effort to answer as many questions as possible spelling, grammar and sentence structure may suffer. My apologies in advance…

1:00	[Comment From Chris] Does this make good sense to do? Home Value = $400K. We have $261K left and 24 years at 5 3/8. I can go down to 4.87% and 20 years. I'd add a little on the monthly bill. But end payout is between $30-$40K. No brainer, right? PS - planning on staying for the long haul.

1:04	Jason Lilly, CFA, CFP - Hi Chris, your right no brianer, as long as the additional monthly payment does not cause cash flow issues. Also, a higher monthly housing cost, may limit borrowing capacity in the future - if that is a consideration.

1:05	[Comment From LIZ`] I HAVE A FIRST MORAGE AT 4.85% 91000 8 YEARS LEFT.AND A SECOND AT 7.50% 66000. 10 YEARS LEFT WHAT WOULD BE THE SAVING BE $ WISE IF I RE FI TO A 15 YEAR NO TAX OR INSURANCE INCLUED ..

1:09

Jason Lilly, CFA, CFP - Hi Liz, your actual payment and intial term would help, but based on the numbers you provided you would pay approximately $20,000 more in interest payments, based on a new 15 year at 5%. This is because your extending your payment term out. However, you could save approximately $650/mth in payments - If you reinvested the difference, using a 8% return, over the 15 year period you would have a retirement nest egg of about $225,000.

1:11	[Comment From marco] How do I refinance if my house is currently valued less than the outstanding mortgage amount?

1:15

Jason Lilly, CFA, CFP - Marco, you have options. If your current mortgage is owned by Fannie Mae or Freddie Mac, you could qualify under the MHA (Making Home Affordable) for up to 105% of your value, but there are some criteria you need to meet. I have attatched a link for more information. Another option is to, put down more cash.
http://makinghomeaffordable.gov/

1:15	[Comment From Tony (watertown)] Hi Jason, thanks for offering your help! My wife and I purchased a condo a few years ago, we have a 30-year fixed mortgage at 6.675%. We plan to buy a home within the next 5 years, would it be advantageous for us to refinance our mortgage now at the lower rate?

1:18	Jason Lilly, CFA, CFP - Tony, If you refinanced to a 5% rate you would save approx. $107 per month per $100,000. So, if the outstanding balance is $300k and closing costs totaled $3,000, it would take you approx. 10 months to breakeven. After that you are saving money.

1:19	[Comment From jeff] can you explain 12b-1 fees on Mutual funds. Are these fees included in the expense ratio?

1:21	Jason Lilly, CFA, CFP - The best way to think about 12B-1 fees are as a regular reaccuring commission's to the investment advisor. Typically they are around .25% and are part of the expense ratio. They are not necessarily "bad", but you should know exactly how your advisor is being compensated.

1:23	[Comment From Stacy] Hi Jason, I'm 34, planning on buying a home this year, and setting my finances up for the next phase in my life - house, family, etc. Would enlisting a financial planner help? And if so, where do I find one?

1:27

Jason Lilly, CFA, CFP -

Stacy, You may not have the expertise, the time or the desire to actively plan and manage certain financial aspects of your life. A financial planner can provide the expertise and objectivity to meet your goals. In today's hectic world, it can be beneficial just to have a financial expert looking over your shoulder to double-check your planning efforts and make sure you stay focused and follow through with your financial plans. A link to the MA Financial Planning Association is below. Make sure the advisor is experienced and qualified. Look for the CFP designation.

FPA of Massachusetts: www.fpama.org

Local Toll-Free Referral Telephone Number
866-804-0484

1:28

[Comment From Pete]
If you are upside down on a mortgage on a house that is not meeting your size needs, would you recommend a deed-in-lieu of forclosure or short sale, renting for 2 years and then re-enter the market to take advantage of the lower prices on bigger homes? How does a plan like this effect you credit-wise moving forward and is what is the better move (short-sale or deed-in-lieu)?

1:30

Jason Lilly, CFA, CFP -

Pete, A deed in lieu of foreclosure requires the borrower to relinquish his or her rights in a property to the lender in exchange for being released from liabilities specifically named in the loan documents; a deed in lieu of foreclosure can often be the result of a settlement. The borrower is freed from having a foreclosure on his or her credit history. It also can eliminate public disclousure, but it has to be voluntary by both parties.

1:31

[Comment From rebeccca]
My question is in regarding to the new stimulus housing plan Obama passed. My mortgage is with Freddie Mac so I am able to refi with owing more than 80% on my mortgage. My question is, will I still have to pay PMI? If that is the case, what makes the new stimulus package beneficial to homeowners wanting to refi?

1:34

Jason Lilly, CFA, CFP - Hi Rebecca, under the MHA, which is part of the stimulus package, you do not need to pay PMI. However you need to be current on your mortgage, have been late no more than once in the last 12 months and qualify for a conforming loan based on typical criteria (income, credit score, etc.). For more info check out the MHA website I sent earlier.

1:37	[Comment From Guest] what are the current rates for a 30 year fixed rate mortgage?

1:40	Jason Lilly, CFA, CFP - Rates bounce around, but currently the 30 year fixed is in the 5% range. There are many websites that provide current rate information try these two: bankrate.com http://www.mtgprofessor.com/

1:40	[Comment From mom23] I have had my house on the market with no bites, I would like to refinance, possible?

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