Thinking about moving to Stratford?

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by Paul Mulligan

If you are looking to purchase a home in Stratford, CT, you would not be alone! This gem of a town is continually growing in population with 51,384 residents and 19,276 households, according to the Town of Stratford. So how do you go about finding affordable mortgages in Stratford, CT so you can start your Stratford life today? Here’s what you need to know:

• The median cost of a house is $250,000 in Stratford, CT, according to the aforementioned report. To determine a mortgage amount that will fit comfortably within your budget, take a look at your income, recurring monthly debts, and the percentage of a down payment that you can make on your purchase. One of our friendly bankers can help you calculate a payment that should be affordable for you.

• Set a realistic target date for purchasing your next home. Living the American Dream is possible, but it doesn’t come without laying the groundwork for a savings and budgeting plan. As you begin your quest for mortgages in Stratford, CT, take a look at your current financial standing to determine when you are ready to make your purchase a reality. If you can’t financially make it work until six months from now, that’s OK—just start saving today.

• Determine what type of mortgage you will need. For instance, are you looking for a fixed-rate home loan, which means you pay the same interest rate for the life of the loan and steadfast payments each month? Or do you want an adjustable-rate mortgage that comes with a changing interest rate over the life of the loan? We can help you determine which mortgage loan program might work best for you.

You can be moments away from securing your home mortgage; you just have to make sure to do your research first. For more on securing mortgages in Stratford, CT, click here. At Milford Bank, we are always a phone call away and ready to help you live the American Dream today.

How to Turn Your Hobby into a Home Business

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by Janet Harrison

If you had all the money in the world, what would you choose to do for work?
That’s the question we’re supposed to ask ourselves to identify what we’d prefer to do for a living. Maybe your response to that question indicates that you’d like to become a photographer, for example, or that you’d like to make jewelry. Identifying your dream job is surely encouraged; there’s a good chance, however, that you’re not quite ready to quit your job and pursue your hobby full time. That’s because you likely don’t have all the money in the world to do so.

But there’s no reason why you shouldn’t at least consider whether the possibility exists that you could make money by turning your hobby into a home business. Sure, you can’t expect that such a business would take off overnight. But who knows? Maybe after a few years, you’ll actually be able to quit your proverbial day job and focus your efforts on making a living while doing something you love.

Before you make a decision, you must ask yourself an important question: Are people willing to pay for what I make?

Prior to launching a home business, you have to be sure that there’s a market for the items you make or the services you offer. Ask your friends how much they’d pay for a bracelet you made, for example. Once you’re comfortable with their responses, it’s time to ask a stranger how much he or she would pay. Satisfied with that answer? It might be time to begin looking into starting a business on the side.

In order to establish your business, you need to be able to prove that you’re trying to make a profit. If you lose money year-after-year and aren’t turning a profit, the IRS could very well view your business as a hobby, limiting your deductions as a result. Here are some tips to help establish your profit motive:

• Create a business plan that clearly defines the fact that you are indeed trying to make money.
• Run your business like a business. That is, keep records of all your expenses and all of your sales.
• Make decisions to increase profits. After all, the goal of a business is to make money, so make sure your actions work toward that goal.

If you begin to realize some level of success, you might want to consider incorporating your business or establishing an LLC so as to reduce your personal liability. In doing so, you’re able to protect your personal assets—like your home, your car and your investment accounts—from creditors.

On top of that, you’ll also appear more serious to those on the outside. The IRS will see that you mean business and might be more inclined to view your operation as a business than a hobby. Customers might think the fact that you’ve incorporated or started an LLC lends you more credence. Additionally, it might be easier for you to get business loans, as banks and other investors might also take you more seriously.

Turning your hobby into a business might be a fun way for you to bring in some extra cash. After that, who knows? The sky could very well be the limit.

What is the difference between the mortgage rate and APR?

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By Paul Mulligan

You are eyeing a 15-year fixed mortgage rate of 3.125 percent. But next to the mortgage rate there is another number that says 3.17 percent annual percentage rate (APR).

So what’s the difference between the two numbers, and how does it affect you?

Your mortgage rate is the baseline interest that you can expect to pay every month if you qualify for the loan. Mortgage rates are offered in increments of eighths (for instance, a sequence would go 3 percent, 3.125 percent, 3.25 percent, 3.375 percent, etc.).

This number can vary depending on several different factors including the health of the housing market and your risk as a borrower. Your risk can include the amount of the loan you are requesting, your credit score, the purpose of the loan and the property type. Other factors could include whether the loan is full, limited or stated, as well as the loan-to-value ratio.

Your APR is what you will actually pay once you factor in all of your third-party and closing fees like loan origination fees, processing fees, underwriting and premiums. It could also contain mortgage “points,” which are percentages of the loan that the bank can request. Different rates will come with different points that you as a borrower could have to pay.

All of these fees are typically bundled into a single APR. Banks are required to disclose the APR on their loans so that consumers can compare apples to apples.
So what can you do to secure the best mortgage possible?

Finding the best mortgage rate could mean saving thousands of dollars in the long run. A good place to start is to look at your bank’s standard mortgage rates to get an idea of what to expect prior to scheduling a meeting. Also, spend some time comparing mortgage lender rates, which will let you find the best deals in the region where you are looking.

Still have questions about mortgage rates and terms? Ask us. We are here to help.

Protecting your finances following divorce

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By Celeste Lohrenz

Separating from a spouse is not an easy time. Still, important decisions need to be made related to your finances.

Following a separation, you should figure out how to live on your own income. You also should learn about what is going to become of your retirement assets, what Social Security benefits you might be entitled to and whether you are properly insured.

During such time, it’s important that you make informed decisions relating to your finances. Consider the following tips:

  • First thing is first: You’re going to need to make sure your financial accounts are registered in your name. That may mean closing previously shared accounts and opening new accounts in your name alone. You may want to consider consulting a tax professional to understand your tax responsibilities to avoid any unanticipated surprises.
  • You always need to look at your credit score. The financial burden of divorce may have impacted your credit. Be sure to review your credit history and take measures to repair your credit, if necessary.Chances are you’ll have to figure out how to live on one income. Figure out which expenses you can’t avoid paying every month—like food, utilities, transportation and housing—and then determine how much discretionary spending you can afford on top of that.
  • Try to live within your means, as you don’t want to find yourself accumulating more debt.
  • It’s probably time to update your estate planning as well. Have your beneficiaries changed following a divorce? Have you designated legal guardians for your children? It is likely time to update your will, as well.
  • You should also review your retirement planning. Following a divorce, IRAs are often split via a one-time distribution without early withdrawal penalties. You need to make sure that you’re financially secure over the long haul, so you might want to consider making use of investment services to begin planning for your future.
  • You still may be entitled to Social Security benefits. Under the government assistance program, you may be entitled to half of your former spouse’s benefits, assuming those benefits are greater than what you’d be able to get through your own benefits.

Separating from a spouse is never an easy thing for a variety of reasons. But by being aware of various monetary considerations that result from such a separation, you can thus begin making better-informed financial decisions.

Homeowners: Is it Time for You to Refinance?

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Buying a house is a major decision for anyone. But over time, that decision—no matter how complex—pays dividends as your house becomes your home.

For many Americans, home ownership is most likely the greatest expense they will undertake during their lives. Although the market has shown vast improvement—recent research shows that only 4 percent of homeowners are behind on their mortgages—there is still room for progress. For instance, some homeowners may have all their money tied up in the walls, meaning they are stuck when it comes to figuring out how to pay for life’s other great expenses such as college tuition, vacations, and that new car, to name a few.

A number of situations may mean that it’s time for you to consider refinancing your mortgage, or replacing your current mortgage with a new one. After all, the last thing you want is to risk losing your home or be unable to fund your daughter’s wedding. But before you take that next step, you should know precisely what it means to refinance so that you end up in a better position financially when all is said and done.

Refinancing is the process of replacing a current mortgage in order to reduce monthly payments by obtaining lower interest rates. Nobody likes paying more than they have to for anything, and lower rates usually translate to lower monthly payments. For example, if you took out a $100,000 loan with a 6.75 percent interest rate, you’d have a monthly principal and interest payment of $649. If you were to refinance that loan at 4.5 percent, your monthly payment would shrink to $507.

The price of your home is likely to increase in value over time, generally speaking. If you’re about to send the kids off to college or want to pay for that long-awaited retirement trip, for example, you can take out a home equity loan while refinancing as well.

Would you like to lower your monthly payment? Are your interest rates too high? Is it time for you to take some equity out of your home?

We at The Milford Bank will answer all of your questions regarding mortgages and home equity loans and help you get the financial security you and your family deserve. Click here to meet our mortgage specialists or to access our free prequalification form.