Retail lender Guild Mortgage announced Monday that Mary Ann McGarry is retiring from the CEO position in late June, remaining on the California-based lender’s board of directors after retirement. Terry Schmidt, Guild’s current president, is the successor.
McGarry joined Guild in 1984 as a supervisor in internal audit and held several leadership positions until promoted to president in 2005 and CEO in 2007. She led the company from its base in the western U.S. to become a nationwide lender with operations in 49 states.
In 2016, McGarry was recognized as one of HousingWire’s Women of Influence, and honored as a HousingWire Vanguard in both 2017 and in 2022. Under her leadership, Guild developed a specialty in serving first-time homebuyers, introducing innovative low down-payment programs and helping active duty and retired military personnel secure VA loans.
McGarry has also led the lender through several acquisitions of late, including Cherry Creek Mortgage, Inlanta Mortgage and Legacy Mortgage. In an interview with HousingWire in October, she said the shift from a refinance boom to a purchase market will leave some mortgage lenders and loan officers with only two options: “Consolidate or exit the business.”
McGarry, who started at Guild when female mortgage executives were rare, rapidly became a leader in the company, going from managing six people to 90 by the time she was in her late 20s. She became adept at spotting and growing talent, including Schmidt, her successor.
“My first hire at Guild, more than 38 years ago, is now the president and a partner,” McGarry said at HW Annual in October. “She’s amazing and everyone in my internal audit group is still with the company today in a leadership position. Three of them are partners. It’s proof that empowering your colleagues and having confidence in them as well as yourself is important.”
In 2010, McGarry worked with her team to create the Guild Giving Program, which encourages employees to donate their time to worthy causes in their own communities. Beneficiaries have included domestic violence shelters, Habitat for Humanity, the Navy SEAL Foundation and the Children’s Cancer Association.
In addition, Guild became one of the first IMBs to support the Mortgage Bankers Association‘s Open Doors Foundation, which provides mortgage and rental assistance to parents of critically ill or injured children.
McGarry will continue to receive her current base salary and other benefits until the effective retirement date. It includes the eligibility for a cash bonus with a target amount of 150% of her salary, prorated for a partial year of service as CEO, according to filings with the Securities and Exchange Commission (SEC).
McGarry’s salary for 2021 was $600,000, and her total compensation reached $3.2 million. (There’s no public information about 2022.) As a non-employee member of Guild’s board of directors, she will receive cash and equity compensation, including a $50,000 annual cash retainer, according to a 14A filing.
Schmidt, president since August 2020, will be the CEO effective July 1. The SEC filings show her base salary will increase from $600,000 to $675,000, and her target bonus will go from 125% to 150% of her base salary. Schmidt will also receive an award of restricted stock units valued at $500,000 on July 1, 2023.
Guild’s executive vice president David Neylan, who joined the company in 2007, will replace Schmidt as president. He will continue as Guild’s chief operating officer.
“Guild has been a remarkable growth story since McCarthy Capital invested alongside Mary Ann, Terry, and other Guild partners in a management buyout of the company from its founder in 2007,” said Patrick Duffy, chairman of the board, in a statement.
Guild posted a net income of $328 million in 2022 despite posting a loss of $15 million in the fourth quarter of the year. Net income rose 16% from the previous year’s $283.8 million.
Whoa, have you seen what just happened to interest rates!?
Suddenly, after at least fourteen years of our financial world being mostly the same, somebody flipped over the table and now things are quite different.
Interest rates, which have been gliding along at close to zero since before the Dawn of Mustachianism in 2011, have suddenly shot back up to 20-year highs.
–
Which brings up a few questions about whether we need to worry, or do anything about this new development.
Is the stock market (index funds, of course) still the right place for my money?
What if I want to buy a house?
What about my current house – should I hang onto it forever because of the solid-gold 3% mortgage I have locked in for the next 30 years?
Will interest rates keep going up?
And will they ever go back down?
These questions are on everybody’s mind these days, and I’ve been ruminating on them myself. But while I’ve seen a lot of play-by-play stories about each little interest rate increase in the financial newspapers, none of them seem to get into the important part, which is,
“Yeah, interest rates are way up, butwhat should I do about it?”
So let’s talk about strategy.
Why Is This Happening, and What Got Us Here?
Interest rates are like a giant gas pedal that revs the engine of our economy, with the polished black dress shoe of Federal Reserve Chairman Jerome Powell pressed upon it.
For most of the past two decades, Jerome’s team and their predecessors have kept the pedal to the metal, firing a highly combustible stream of easy money into the system in the form of near-zero rates. This made mortgages more affordable, so everyone stretched to buy houses, which drove demand for new construction.
It also had a similar effect on business investment: borrowed money and venture capital was cheap, so lots of entrepreneurs borrowed lots of money and started new companies. These companies then rented offices and built factories and hired employees – who circled back to buy more houses, cars, fridges, iPhones, and all the other luxurious amenities of modern life.
This was a great party and it led to lots of good things, because we had two decades of prosperity, growth, raising our children, inventing new things and all the other good things that happen in a successful rich country economy.
Until it went too far and we ended up with too much money chasing too few goods – especially houses. That led to a trend of unacceptably fast Inflation, which we already covered in a recent article.
–
So eventually, Jay-P noticed this and eased his foot back off of the Easy Money Gas Pedal. And of course when interest rates get jacked up, almost everything else in the economy slows down.
And that’s what is happening right now: mortgages are suddenly way more expensive, so people are putting off their plans to buy houses. Companies find that borrowing money is costly, so they are scaling back their plans to build new factories, and cutting back on their hiring. Facebook laid off 10,000 people and Amazon shed 27,000.
We even had a miniature banking crisis where some significant mid-sized banks folded and gave the financial world fears that a much bigger set of dominoes would fall.
All of these things sound kinda bad, and if you make the mistake of checking the news, you’ll see there is a big dumb battle raging as usual on every media outlet. Leftists, Right-wingers, and anarchists all have a different take on it:
It’s the President’s fault for printing all that money and running up the debt! We should have Fiscal Discipline!
No, it’s the opposite! The Fed is ruining the economy with all these rate rises, we need to drop them back down because our poor middle class is suffering!
What are you two sheeple talking about? The whole system is a bunch of corrupt cronies and we shouldn’t even have a central bank. All hail the true world currency of Bitcoin!!!
The one thing all sides seem to agree on is that we are “experiencing hard economic times” and that “the country is headed in the wrong way”.
Which, ironically, is completely wrong as well – our unemployment rate has dropped to 50-year lows and the economy is at the absolute best it has ever been, a surprise to even the most grounded economists.
The reality? We’re just putting the lid back onto the ice cream carton until the economy can digest all the sugar it just wolfed down. This is normal, it happens every decade or two and it’s no big deal.
Okay, but should I take my money out of the stock market because it’s going to crash?
This answer never changes, so you’ll see it every time we talk about stock investing: Holy Shit NO!!!
The stock market always goes up in the long run, although with plenty of unpredictable bumps along the way. Since you can’t predict those bumps until after they happen, there is no point in trying to dance in and out of it.
But since we do have the benefit of hindsight, there are a few things that have changed slightly: From its peak at the beginning of 2022 until right now (August 2023 as I write this), the overall US market is down about 10%. Or to view it another way, it is roughly flat since June 2021, so we’ve seen two years with no gains aside from total dividends of about 3%.
Since the future is always the same, unknowable thing, this means I am about 10% more excited about buying my monthly slice of index funds today than it was at the peak.
Should I start putting money into savings accounts instead because they are paying 4.5%?
This is a slightly trickier question, because in theory we should invest in a logical, unbiased way into the thing with the highest expected return over time.
When interest rates were under 1%, this was an easy decision: stocks will always return far more than 1% over time – consider the fact that the annual dividend payments alone are 1.5%!
But there has to be some interest rate at which you’d be willing to stop buying stocks and prefer to just stash it into the stable, rewarding environment of a money market fund or long-term bonds or something else similar. Right now, if a reputable bank offered me, say, 12% I would probably just start loading up.
But remember that the stock market is also currently running a 10% off sale. When the market eventually reawakens and starts setting new highs (which it will someday), any shares I buy right now will be worth 10% more. And then will continue going up from there. Which quickly becomes an even bigger number than 12%.
In other words, the cheaper the stocks get, the more excited we should be about buying them rather than chasing high interest rates.
As you can see, there is no easy answer here, but I have taken a middle ground:
I’m holding onto all the stocks I already own, of course
BUT since I currently have an outstanding margin loan balance for a house I helped to buy with several friends (yes this is #3 in the last few years!), I am paying over 6% on that balance. So I am directing all new income towards paying down that balance for now, just for peace of mind and because 6% is a reasonable guaranteed return.
Technically, I know I would probably make a bit more if I let the balance just stay outstanding, kept putting more money into index funds, and paid the interest forever, but this feels like a nice compromise to me
What if I want to Buy a House?
–
For most of us, the biggest thing that interest rates affect is our decisions around buying and selling houses. Financing a home with a mortgage is suddenly way more expensive, any potential rental house investments are suddenly far less profitable, and keeping our old house with a locked-in 3% mortgage is suddenly far more tempting.
Consider these shocking changes just over the past two years as typical rates have gone from about 3% to 7.5%.
Assuming a buyer comes up with the average 10% down payment:
The monthly mortgage payment on a $400k house has gone from about $1500 at the beginning of 2022 last year to roughly $2500 today. Even scarier, the interest portion of that monthly bill has more than doubled, from $900 to $2250!
For a home buyer with a monthly mortgage budget of $2000, their old maximum house price was about $500,000. With today’s interest rates however, that figure has dropped to about $325,000
Similarly, as a landlord in 2022 you might have been willing to pay $500k for a duplex which brought in $4000 per month of gross rent. Today, you’d need to get that same property for $325,000 to have a similar net cash flow (or try to rent each unit for a $500 more per month) because the interest cost is so much higher.
And finally, if you’re already living in a $400k house with a 3% mortgage locked in, you are effectively being subsidized to the tune of $1000 per month by that good fortune. In other words, you now have a $12,000 per year disincentive to ever sell that house if you’ll need to borrow money to buy a new one. And you have a potential goldmine rental property, because your carrying costs remain low while rents keep going up.
This all sounds kind of bleak, but unfortunately it’s the way things are supposed to work – the tough medicine of higher interest rates is supposed to make the following things happen:
House buyers will end up placing lower bids which fit within their budgets.
Landlords will have to be more discerning about which properties to buy up as rentals, lowering their own bids as well.
Meanwhile, the current still-sky-high prices of housing should continue to entice more builders to create new homes and redevelop and upgrade old buildings and underused land, because high prices mean good profits. Then they’ll have to compete for a thinner supply of home buyers.
The net effect of all this is that prices should stop going up, and ideally fall back down in many areas.
When Will House Prices Go Back Down?
This is a tricky one because the real “value” of a house depends entirely on supply and demand. The right price is whatever you can sell it for. However, there are a few fundamentals which influence this price over the long run because they determine the supply of housing.
The actual cost of building a house (materials plus labor), which tends to just stay pretty flat – it might not even keep up with inflation.
The value of the underlying land, which should also follow inflation on average, although with hot and cold spots depending on which cities are popular at the time.
The amount of bullshit which residents and their city councils impose upon house builders, preventing them from producing the new housing that people want to buy.
The first item (construction cost) is pretty interesting because it is subject to the magic of technological progress. Just as TVs and computers get cheaper over time, house components get cheaper too as things like computerized manufacturing and global trade make us more efficient. I remember paying $600 for a fancy-at-the-time undermount sink and $400 for a faucet for my first kitchen remodel in the year 2001. Today, you can get a nicer sink on Amazon for about $250 and the faucet is a flat hundred. Similarly, nailguns and cordless tools and easy-to-install PEX plumbing make the process of building faster and easier than ever.
On the other hand, the last item (bullshit restrictions) has been very inflationary in recent times. I’ve noticed that every year another layer of red tape and complicated codes and onerous zoning and approval processes gets layered into the local book of rules, and as a result I just gave up on building new houses because it wasn’t worth the hassle. Other builders with more patience will continue to plow through the murk, but they will have less competition, fewer permits will be granted, and thus the shortage of housing will continue to grow, which raises prices on average.
Thankfully, every city is different and some have chosen to make it easier to build new houses rather than more difficult. Even better, places like Tempe Arizona are allowing good housing to be built around people rather than cars, which is even more affordable to construct.
But overall, since overall US house prices adjusted for inflation are just about at an all-time high, I think there’s a chance that they might ease back down another 25% (to 2020 levels). But who knows: my guess could prove totally wrong, or the “fall” could just come in the form of flat prices for a decade that don’t keep up with inflation, meaning that they just feel 25% cheaper relative to our higher future salaries.
–
When Will Interest Rates Go Back Down?
The funny part about our current “high” interest rates is that they are not actually high at all. They’re right around average.So they might not go down at all for a long time.
Remember that graph at the beginning of this article? I deliberately cropped it to show only the years since 2009 – the long recent period of low interest rates. But if you zoom out to cover the last seventy years instead, you can see that we’re still in a very normal range.
–
But a better answer is this one: Interest rates will go down whenever Jerome Powell or one of his successors determines that our economy is slowing down too much and needs another hit from the gas pedal. In other words, whenever we start to slip into a genuine recession.
In order to do that however, we need to see low inflation, growing unemployment, and other signs of an economy that’s not too hot. And right now, those things keep not showing up in the weekly economic data.
You can get one reasonable prediction of the future of interest rates by looking at something called the US Treasury Yield Curve. It typically looks like this:
–
What the graph is telling you is that as a lender you get a bigger reward in exchange for locking up your money for a longer time period. And way back in 2018, the people who make these loans expected that interest rates would average about 3.0 percent over the next 30 years.
Today, we have a very strange opposite yield curve:
–
If you want to lend money for a year or less, you’ll be rewarded with a juicy 5.4 percent interest rate. But for two years, the rate drops to 4.92%. And then ten-year bond pays only 4.05 percent.
This situation is weird, and it’s called an inverted yield curve. And what it means is that the buyers of bonds currently believe that interest rates will almost certainly drop in the future – starting a little over a year from now.
And if you recall our earlier discussion about why interest rates drop, this means that investors are forecasting an economic slowdown in the fairly near future. And their intuition in this department has been pretty good: an inverted yield curve like this has only happened 11 times in the past 75 years, and in ten of those cases it accurately predicted a recession.
So the short answer is: nobody really knows, but we’ll probably see interest rates start to drop within 18-24 months, and the event may be accompanied by some sort of recession as well.
The Ultimate Interest Rate Strategy Hack
–
I like to read and write about all this stuff because I’m still a finance nerd at heart. But when it comes down to it, interest rates don’t really affect long-retired people like many of us MMM readers, because we are mostly done with borrowing. I like the simplicity of owning just one house and one car, mortgage-free.
With the current overheated housing market here in Colorado, I’m not tempted to even look at other properties, but someday that may change. And the great thing about having actual savings rather than just a high income that lets you qualify for a loan, is that you can be ready to pounce on a good deal on short notice.
Maybe the entire housing market will go on sale as we saw in the early 2010s, or perhaps just one perfect property in the mountains will come up at the right time. The point is that when you have enough cash to buy the thing you want, the interest rates that other people are charging don’t matter. It’s a nice position of strength instead of stress. And you can still decide to take out a mortgage if you do find the rates are worthwhile for your own goals.
So to tie a bow on this whole lesson: keep your lifestyle lean and happy and don’t lose too much sweat over today’s interest rates or house prices. They will probably both come down over time, but those things aren’t in your control. Much more important are your own choices about earning, saving, healthy living and where you choose to live.
With these big sails of your life properly in place and pulling you ahead, the smaller issues of interest rates and whatever else they write about in the financial news will gradually shrink down to become just ripples on the surface of the lake.
In the comments:what have you been thinking about interest rates recently? Have they changed your decisions, increased, or perhaps even decreased your stress levels around money and housing?
—
* Photo credit: Mr. Money Mustache, and Rustoleum Ultra Cover semi gloss black spraypaint. I originally polled some local friends to see if anyone owned dress shoes and a suit so I could get this picture, with no luck. So I painted up my old semi-dressy shoes and found some clean-ish black socks and pants and vacuumed out my car a bit before taking this picture. I’m kinda proud of the results and it saved me from hiring Jerome Powell himself for the shoot.
“The Last Frontier,” Alaska, is defined by its unparalleled natural beauty. From the Denali National Park, and colorful Northern Lights, to Glacier Bay National Park and outdoor activities like fishing, hiking, and wildlife viewing create a one-of-a-kind state. If you’ve been considering moving to Alaska or are hoping to buy your first home there, you also probably have a budget you’d like to stay under as you look for a place to live. As of August, the median home sale price in Alaska is $382,700.
If that price is out of your budget, don’t worry. We’ve got options to help you find a home. Redfin has collected a list of the 4 most affordable places to live in Alaska. And they all have a median home sale price under $382,700. From Kodiak to Fairbanks, read on to see what cities you may want to consider moving to.
#1: Kodiak
Median home price: $170,000 Average sale price per square foot: $265 Median household income: $67,391 Nearest major metro: Anchorage (415 miles) Kodiak, AK homes for sale Kodiak, AK apartments for rent
With a median home sale price of $170,000, Kodiak takes the number one spot on our list of affordable places to live in Alaska. It’s the main city on Kodiak Island which has six other small communities. About 5,900 people live in Kodiak and is roughly 415 miles from the nearest metropolitan city, Anchorage. Living in Kodiak, you can hike the South End Trail, explore the Kodiak History Museum and the Alutiiq Museum, take the ferry to Port Lions, and check out Fort Abercrombie State Historic Park.
#2: Nikiski
Median home price: $285,000 Average sale price per square foot: $199 Nearest major metro: Anchorage (170 miles) Nikiski, AK homes for sale Nikiski, AK apartments for rent
Coming in as the second most affordable city to live in Alaska is Nikiski, located on the Kenai Peninsula. It’s about 170 miles southwest of Anchorage, the nearest major city. When living in this town of 4,500 people, you can explore the East Foreland Lighthouse Reserve, take in the views of Cook Inlet at Captain Cook State Recreation Area, and picnic at Stormy Lake.
#3: Fairbanks
Median home price: $299,900 Average sale price per square foot: $143 Average rent for a 1-bedroom apartment: $1,350 Median household income: $66,572 Fairbanks, AK homes for sale Fairbanks, AK apartments for rent
Next is the city of Fairbanks, which has about 31,500 residents and is the second largest city in Alaska. The median home sale price is $299,900 which is about $80K less than the median home sale price in the state. If you find yourself moving to the third most affordable place in Alaska, explore downtown Fairbanks where you’ll find restaurants and museums like Fairbanks Ice Museum, check out Wedgewood Wildlife Sanctuary, and spend the day at Pioneer Park.
#4: Kenai
Median home price: $306,000 Average sale price per square foot: $176 Nearest major metro: Anchorage (160 miles) Kenai, AK homes for sale Kenai, AK apartments for rent
A little more expensive than Fairbanks is the city of Kenai, also located on the Kenai Peninsula just south of Nikiski. About 7,800 people live in Kenai, where there are plenty of unique activities to do. Be sure to take in the scenery at Kenai Beach, hike Meek’s Trail, explore the quaint downtown, or take a trip to the nearby Kenai Fjords National Park.
Methodology: All cities must have over 4,000 residents per the US Census and have a median home sale price under the average median home sale price in Alaska. Median home sale price and median sale price per square foot from the Redfin Data Center during August 2023. Average rental data from Rent.com August 2023. Population and median household income data sourced from the United States Census Bureau.
The FHFA has announced details of a streamlined loan modification program similar to the one in place at Indymac Federal Bank, aimed at helping seriously delinquent borrowers.
The aptly named “Streamlined Modification Program” is a collaboration of the FHFA (Fannie and Freddie’s new regulator), FHA, Treasury, and Hope Now (along with its 27 servicer partners), but does not provide any direct government assistance.
To be considered for the program, borrowers must own and occupy the subject property as their primary residence, be 90 days or more behind on their mortgage payments, and must not have filed for bankruptcy protection.
They must also prove that they have experienced a “hardship or change in financial circumstances” and did not purposely default on the mortgage to receive assistance.
Eligible mortgages include Freddie Mac, Fannie Mae or portfolio loans with participating investors.
Under the program, borrowers will work with their servicers to establish an affordable monthly mortgage payment, determined as no more than 38 percent of the household’s monthly gross income (debt-to-income ratio).
The affordable payment will be achieved by reducing the mortgage rate on the loan, extending the life of the loan, or deferring payment on part of the principal, but no principal reductions will be permitted.
While no foreclosure moratorium has been put in place, borrowers who remain in contact with their servicers during the modification process may have any planned foreclosure sale suspended.
To encourage participation, servicers who take part will receive $800 for each loan modified through the program.
FHFA director James B. Lockhart noted that Fannie Mae and Freddie Mac own or guarantee nearly 31 million mortgages, representing almost 60 percent of all single-family mortgages in the U.S., but account for just 20 percent of serious delinquencies.
Private-label securities, those sliced and diced on Wall Street, account for 60 percent of serious delinquencies, despite their 20 percent share of the mortgage market.
The program is expected to be launched by December 15th.
The latest buzzword on the street is “shutdown,” and apart from being buzzworthy, it’s actually very real. National parks are closed and hundreds of thousands of government workers have been told to stay at home.
Fortunately, active military continues to serve and air traffic controllers, prison guards, and border patrol agents remain on the job.
But how does the shutdown affect the mortgage industry? Well, it depends on the type of loan involved, though just about everything will be impacted to some degree.
FHA Loans
The most popular government loans are insured by the Federal Housing Authority (FHA), which operates under the Department of Housing and Urban Development (HUD).
HUD noted that it has 8,709 employees “on board as of pay period ending September 7, 2013.”
In the event of a shutdown, limited staff will remain on hand to handle certain business activities, including FHA loan processing.
Take a look at the chart above to see how few employees would be working during a shutdown…not very many.
In other words, while FHA loans will still continue be processed, there will definitely be delays.
Fortunately, FHA lending has become a lot less popular due to higher premiums, which should offset some of the carnage.
Also note that Ginnie Mae, which guarantees mortgage-backed securities (MBS) backed by federally insured or guaranteed loans, will see its staff slashed, though it said it will “continue to perform its critical and essential functions.”
VA Loans
Despite the U.S Department of Veteran Affairs (VA) being very much a government agency, it will continue to operate many of its operations, including its core medical facilities and home loan processing.
So borrowers looking to obtain a VA loan should expect business as usual, barring any delays that result from the overall shutdown.
If you’re attempting to get a VA loan, patience should probably be exercised as precautionary measure.
USDA Loans
The USDA, while seemingly an agency dedicated to agriculture, also operates a popular zero down home loan program reserved for rural locations.
As a result of the shutdown, the entire USDA website is currently down. Well, there’s a nice little message about the shutdown, but you can’t access any key information.
Additionally, the USDA Rural Development Guaranteed Housing Loan Program appears to be on hold during the shutdown. In other words, nothing is doing at the USDA until politicians learn to get along.
However, the USDA will continue to handle existing customers funds, such as processing escrow accounts to avoid tax penalties.
Fannie Mae and Freddie Mac
While Fannie and Freddie aren’t technically government entities, despite being in government conservatorship (don’t ask), these conventional loans are also being impacted by the shutdown.
First off, government workers whose employment is directly affected by the shutdown could run into snags during the loan underwriting process, seeing that lenders need to verify employment in order to sell their loans to Fannie and Freddie.
As a result, Fannie Mae released guidance on a few workarounds, advising lenders that they can obtain verification of employment (VOE) after the loan closes, but before it is sold. This is actually already permitted, so perhaps just a reminder.
The pair also require lenders to complete requests for borrower tax returns (IRS) and social security numbers, both of which will be difficult to obtain in light of the government shutdown.
Fannie is revising its policies temporarily to allow lenders to obtain the transcripts and complete validation after loan closing, but before loan delivery. In other words, buying some time.
So the hope is that lenders who sell their loans off to Fannie and Freddie will continue to underwrite and process loans on the basis that the shutdown won’t last long enough for them to be stuck with the loans.
Additionally, loan servicers have been advised to waive late payment fees if the borrower’s mortgage payment is late because of a government furlough.
Servicers are also being encouraged to offer Unemployment Forbearance to employees affected by the shutdown, assuming they’re unable to make housing payments.
For the record, even non-conforming loans and jumbo loans will be affected by the shutdown, seeing that lenders may still need to call on government agencies for certain information, so no loans are entirely exempt.
At the end of the day, patience is the name of the game here. Ideally, the shutdown won’t last too long and none of this will matter. But in the meantime, expect delays if you’re attempting to get a mortgage. And pray mortgage rates don’t spike in the process.
It’s important to understand your rights as a renter.
The landlord-tenant relationship is complex. Each party’s responsibilities can vary by city, state and lease agreement. But federal, local and state laws secure renters’ rights.
The first step in exercising your tenants’ rights is to understand what those rights (and the laws that protect them) actually are. The second is to learn how to take action if someone violates your rights.
In this guide:
The right to fair housing
The Fair Housing Act of 1968 makes it illegal for landlords to discriminate based on race, sex, age, religion, nationality, family status or mental or physical disability. The Fair Housing Act applies to most rental units. There are exceptions for small rental properties, private clubs and religious organizations.
The law protects current renters and prospective tenants from discrimination for any of the reasons listed above. This discrimination can take many forms.
Federal Fair Housing Act protections
Sex, race, family status, age, religion, disability or national origin are examples of protected classes under the FHA. Landlords can’t refuse to rent to or negotiate with someone because of their protected status. They can’t set different terms or conditions, ask a renter to move out or force them to pay different fees or higher rent.
It’s against the law to state that only renters with particular physical and mental abilities or familial status can rent an apartment. The same goes for people of a certain age, race, sex or nationality. This applies to verbal statements and advertising, too. It’s also illegal for landlords to harass, intimidate, bribe or interfere with a renter’s right to equitable accommodation.
Definition of familial status
A landlord can’t refuse to rent to families with kids under 18 or discriminate against people seeking custody of children under 18. Landlords can’t deny legal guardians or pregnant women a home unless there’s a legal reason to do so.
Definition of sex
It’s against the law to only rent to men or women. Landlords also can’t discriminate because of a renter’s sexual orientation or gender identity. The U.S. Department of Housing and Urban Development (HUD) offers resources, especially for LGBTQ+ renters.
Other protected classes
Certain state laws extend additional protections. Some make it illegal to discriminate because a renter receives alimony, child support or public assistance. Others ban discrimination based on physical characteristics like tattoos and piercings.
Search by state to learn about the laws in your area. If someone violates your rights, contact an organization on this list, reach out to an attorney or law firm or file a claim with HUD.
Rights for disabled tenants
The FHA and the Americans with Disabilities Act (ADA) protect renters with physical and mental disabilities. Under these laws, landlords must provide safe and accessible rental homes to residents with disabilities.
The ADA requires that common spaces are accessible. The FHA requires that most apartments, rental homes and condos built after March 13, 1991, include wheelchair-accessible doors, hallways and living spaces. Homes built before that date must have grab rails, accessible outlets and light switches, TTY phone systems, visual alarms and other accessible features put in place. Learn more about your rights in our accessible apartment guide.
If a landlord won’t rent to you or refuses to make reasonable accommodations so you can live in your home, you could file a complaint. Contact a Fair Housing Assistance Program (FHAP) or file a claim with HUD. Hiring an attorney with experience in discrimination claims can increase your chance of success.
The right to a habitable home
You have the right to a habitable home. That means the home you rent is a clean, safe space with access to heat and water. It’s structurally sound and free from pests.
A habitable home isn’t a threat to your physical health. A landlord must provide working safety measures like fire extinguishers, carbon monoxide and smoke detectors and fire alarms in your apartment. Most states require landlords to tell renters about environmental hazards like asbestos or mold before signing a lease.
The Environmental Protection Agency (EPA) and HUD also require landlords to tell prospective renters about lead paint in buildings built before 1978. Both parties must acknowledge the presence of lead paint in writing before the tenants move in. Landlords aren’t obligated to remove lead-based paint, just acknowledge it.
In most other cases, the landlord or property management team is responsible for removing toxins and making the rental home safe to live in. This doesn’t apply to damage caused by the current tenant.
Tenant rights include access to timely repairs and maintenance. A landlord will often include a timeframe for completing repairs. The lease may provide additional details about timing.
The right to privacy and notice for landlord visits
This is one of the most common landlord-tenant issues. Thankfully, renters’ rights are quite clear on the subject.
A landlord or property owner might own your apartment, but they can’t just barge in whenever they want. Landlords can only enter under certain circumstances. These include making or assessing repairs and showing rental units to insurance or mortgage professionals and prospective renters.
Landlords don’t need permission to enter during emergency situations like a fire or natural disaster. They can also come in if they think a tenant abandoned an apartment.
Most states require a landlord to give advance notice before entering an apartment, usually 24-48 hours. Rental agreements may provide more details.
Tenants have the right to request another date or time for a landlord’s visit. But they can’t deny them access if they have a valid reason to enter.
The right to fair credit reporting
The Fair Credit Reporting Act of 1970 gives renters the right to know what’s in their credit reports. If a property manager or landlord rejects your application, they have to disclose where they got the information. They also have to tell you how to contact the issuer. You just need to request this information from your landlord in writing.
This protects tenant rights because landlords have to provide evidence of bad credit. They can’t just deny your application for no reason. It can also catch clerical errors and alert you to possible identity theft.
Rights regarding notice of evictions
Evictions are one of the most difficult landlord-tenant issues. Landlords can legally evict a tenant for several reasons. These include nonpayment of rent, violating the terms of the rental agreement, significant property damage and failing to move out after a lease ends. The eviction process and eviction laws vary from state to state.
A landlord must follow the law in their state. Renters have the right to receive an eviction notice that details the reason for eviction. It must also provide a time frame for the eviction process. Residents should respond in writing and offer a solution that resolves the problem, if possible. (Eviction resources are available.) Once an eviction goes to court, the process is more difficult to stop.
If landlord-tenant communication breaks down and the issue isn’t resolved, the case goes to eviction court. If bad landlords try to evict tenants without an eviction court order, renters can get damages. Contact a lawyer or law firm immediately.
An eviction can damage your credit and make it hard to find a home in a safe location. Hiring a lawyer can help.
“Nationwide, only 10 percent of tenants are able to secure representation in eviction cases, compared to 90 percent of landlords,” Emily Benfer of the Princeton University Eviction Lab explains. “Where tenants are not represented, the vast majority lose their case.”
The right to recover a security deposit
Renters also have the right to have their security deposit returned at the end of a lease. Many rental agreements require security deposits to fix damage caused by residents or a pet. Security deposits are also used to cover incomplete rent payments.
Landlords can use a security deposit to fix the damaged rental unit or to pay off unpaid rent. But they need to provide the renter with an itemized list of expenses for which the landlord used the security deposit. They also need to return the unused portion of the security deposit to the tenant.
A renter should know local laws since some states limit how you can use security deposits and how large they are. Certain security deposits (like pet security deposits) aren’t refundable. Check your lease for the details.
The right to quiet enjoyment
Residents have the right to quiet enjoyment, called “Covenant of Quiet Enjoyment” in a lease. It guarantees residents the right to enjoy their rental property without “substantial interference” from a landlord.
If a landlord starts hammering nails in the middle of the night or fails to enforce quiet hours or no-smoking rules, they could be in violation. Refusing to repair a rental unit until it becomes uninhabitable, revving engines or throwing loud parties would be a violation, too.
A renter who can prove their landlord acted in bad faith could earn monetary damages or a full or partial rent refund. A lawyer who specializes in landlord-tenant issues will be an important ally.
Protect your rights
Now that you’ve reviewed your rights, you understand the protections provided by the law and your lease. If you’re a victim of discrimination or another legal issue, there’s more work ahead.
You may need to report a renters’ rights violation or file a landlord-tenant dispute. You might need to file a claim, challenge an eviction or take legal action.
Read the rental agreement
If you’re not sure if your landlord has violated your tenants’ rights, re-read your lease carefully. It can provide evidence to support your case or clarify a legal issue.
In a perfect world, you received a copy of your lease when you signed it. Some states must provide a copy of your lease agreement after you move in and after every annual renewal.
Otherwise, you can request a copy of your rental agreement from your landlord or management company in writing. That’s a good habit to get into for all landlord-tenant communications.
Document everything
Get everything in writing when documenting a legal issue. You need clear evidence and an organized system for keeping track of all the details.
“Documentation is important, whether you’re talking to a lawyer, going through the court system or going through a housing discrimination case,” says Kelly Gorz, Associate Director of High Plains Fair Housing Center in Grand Forks, North Dakota.
“Keep track of any kind of communication you have with your landlord — any emails, texts, receipts. Keep a notebook. If you talk to them in person, write down the date, what you asked for and what they said. Take pictures at move-in and walk-out. Take videos. Definitely don’t pay in cash. Make sure you have some kind of record of payment, whether that’s a check or certified mail.”
Study tenant rights in your state
Legal protections for renters vary widely by state and territory. They can even vary from city to city, so research the laws in your location thoroughly.
“Contact local fair housing offices and your city planning and development offices, too,” suggests Gorz. “They are very connected to their local community resources.”
Renters in HUD housing can call 1-800-MULTI-70 (1-800-685-8470). Assistance is available in English and Spanish. HUD also details tenant rights organizations and services by state and territory.
Some state attorney general websites also have information for renters. Enter your state to learn if yours is one of them.
Report discrimination to a partner agency
Reporting discrimination can feel overwhelming. Filing a claim with a community organization that specializes in FHA issues can make the process feel more manageable.
A renter can usually work directly with an organization in its own state. Staff members serve as advocates for renters who are filing an FHA claim, facing an eviction notice or dealing with another legal issue. Some can provide a lawyer or other legal services, while others provide free education and outreach.
Report FHA violations to HUD on the phone
Renters can also report housing discrimination complaints directly to HUD by calling 1-800-669-9777. The TTY is 1-800-927-9275. It’s always free to call.
Provide your name and address, as well as the name and address of the person who discriminated against you. Include the date the violation occurred, the address of the rental property and a brief description of the incident.
If HUD finds evidence of discrimination against a renter and the case goes to court, HUD will provide a lawyer for free. A renter can also retain their own attorney.
Report discrimination to HUD in writing
Tenants can also provide these details in writing. File an online complaint in Spanish or English on the HUD website.
Or, download this form and mail or email it to the closest regional office. The form is also available in Arabic, Spanish, Chinese, Korean, Russian, Somali, Cambodian and Vietnamese.
Retain an attorney
If you’ve been a victim of discrimination, you’ll need a lawyer that specializes in discrimination cases. If you’re challenging an eviction or you’re in the middle of a landlord-tenant dispute, select an experienced landlord-tenant attorney.
Free legal help is also available. Search by state to find a pro bono attorney or law firm in your area.
Challenge unmade repairs
If a landlord doesn’t make necessary repairs or the apartment is uninhabitable, renters have options. First, submit a request for repairs in writing and document any response.
Next, check your city and state’s maintenance laws. Information is often available at the local housing or building authority office. The health departments or fire stations might also provide help.
If the problem violates building or health codes or the apartment isn’t safe to live in, contact local authorities. Inspectors may order the landlord to fix the problem.
Knowledge is power
Every renter should know and understand their rights. That’s the first step to preserving them. And if your landlord violates your rights are violated, take the necessary steps to resolve the issues so you can enjoy a safe and happy home.
With its Southern comfort food, Gulf Coast beaches, historical significance, music heritage, and welcoming communities, there are plenty of reasons to live in Alabama. If you’re considering moving to Alabama then chances are you also have a budget you’re hoping to stay under in your home or apartment search. When it comes to buying a home in Alabama the median home sale price is $284,900.
If that price is out of your budget, don’t worry, we’ve got options to help you find a home. Redfin has collected 10 of the most affordable places to live in Alabama. And the best part is that they all have a median home sale price under $284,900. From Montgomery to Birmingham, let’s jump in and see what cities are on the list.
#1: Gadsden
Median home price: $176,200 Average sale price per square foot: $105 Average rent for a 1-bedroom apartment: $625 Median household income: $35,776 Nearest major metro: Birmingham (60 miles) Gadsden, AL homes for sale Gadsden, AL apartments for rent
With a median home sale price of $176,200, Gadsden is the most affordable place to live in Alabama. About 60 miles northeast of Birmingham, the nearest major metro, Gadsden is home to roughly 33,900 people. If you’re considering moving to this area make sure to explore Noccalula Falls Park, golf at one of the courses, or explore the downtown Gadsden area.
#2: Montgomery
Median home price: $180,000 Average sale price per square foot: $110 Average rent for a 1-bedroom apartment: $775 Median household income: $49,989 Montgomery, AL homes for sale Montgomery, AL apartments for rent
Coming in as the second most affordable place to live in Alabama is Montgomery. When living in this city of 200,600 people, you can visit the Alabama State Capitol building and explore Montgomery Zoo & Mann Wildlife Learning Museum. Discover some of the other historical museums located throughout Montgomery like the Rosa Parks Museum, The Legacy Museum, and the Freedom Rides Museum.
#3: Birmingham
Median home price: $229,000 Average sale price per square foot: $156 Average rent for a 1-bedroom apartment: $775 Median household income: $39,403 Birmingham, AL homes for sale Birmingham, AL apartments for rent
About 200,700 people live in Birmingham. The median home sale price is $229,000 which is about $55K less than the median home sale price in Alabama. If you find yourself moving here, make sure to visit museums like Birmingham Civil Rights Institute and Birmingham Museum of Art and explore the gorgeous Birmingham Botanical Gardens. You can also take in the scenic views at Vulcan Park and Museum or stroll along the trails at Railroad Park.
#4: Bessemer
Median home price: $245,000 Average sale price per square foot: $136 Median household income: $49,989 Nearest major metro: Birmingham (15 miles) Bessemer, AL homes for sale Bessemer, AL apartments for rent
Only slightly more expensive than Birmingham is the city of Bessemer, located just 15 miles southeast of the big city. With a population close to 26,000, there’s still plenty to do in this city. Plan to visit Alabama Adventure & Splash Adventure during the sunny summer months and check out the downtown area.
#5: Enterprise
Median home price: $250,000 Average sale price per square foot: $131 Average rent for a 1-bedroom apartment: $625 Median household income: $49,989 Nearest major metro: Dothan (30 miles) Enterprise, AL homes for sale Enterprise, AL apartments for rent
Another great affordable city to consider moving to is Enterprise. With 28,700 residents, moving to this affordable city gives you the perks of city-life without living in a major metropolitan area. Living in Enterprise, you can spend the afternoon at Johnny Henderson Park, and check out the downtown area.
#6: Prattville
Median home price: $258,409 Average sale price per square foot: $135 Average rent for a 1-bedroom apartment: $1,195 Median household income: $65,932 Nearest major metro: Birmingham (15 miles) Prattville, AL homes for sale Prattville, AL apartments for rent
The home prices in our next city, Prattville, are about $25K less than the state’s average. Home to roughly 37,800 people, Prattville is a great place to consider moving to this year – and you’ll have easy access to what makes this city stand out. Make sure to explore green spaces like Wilderness Park and Pratt Park, check out the Doster Road Artesian Well House, and grab a meal at one of the local restaurants.
#7: Tuscaloosa
Median home price: $259,900 Average sale price per square foot: $174 Average rent for a 1-bedroom apartment: $865 Median household income: $44,880 Nearest major metro: Birmingham (60 miles) Tuscaloosa, AL homes for sale Tuscaloosa, AL apartments for rent
Next on our list of affordable places to live in Alabama is Tuscaloosa. With a population of close to 99,600, living in Tuscaloosa is a great option for those looking for a mid-sized city to call home. If you find yourself moving to this city make sure to spend the day at Lake Tuscaloosa, watch a show at Tuscaloosa Amphitheater, walk along the Tuscaloosa Riverwalk, or explore the museums and campus grounds at the University of Alabama.
#8: Decatur
Median home price: $260,000 Average sale price per square foot: $140 Average rent for a 1-bedroom apartment: $749 Median household income: $52,539 Nearest major metro: Huntsville (25 miles) Decatur, AL homes for sale Decatur, AL apartments for rent
If you’ve lived in Alabama for a while, it’s likely you know of Decatur. About 57,900 people reside in Decatur. Be sure to explore the expansive Wheeler National Wildlife Refuge, visit museums like Old State Bank and the Cook Museum of Natural Science, or check out the downtown area once living in Decatur.
#9: Northport
Median home price: $272,900 Average sale price per square foot: $171 Average rent for a 1-bedroom apartment: $885 Median household income: $69,921 Nearest major metro: Tuscaloosa (2 miles) Northport, AL homes for sale Northport, AL apartments for rent
Another great place to consider living in Alabama is Northport where the population is about 31,100. Northport is conveniently located just two miles north of Tuscaloosa. Popular things to do in Northport include exploring the Northport Riverwalk and golfing at one of the courses.
#10: Phenix City
Median home price: $279,000 Average sale price per square foot: $125 Average rent for a 1-bedroom apartment: $857 Median household income: $43,296 Nearest major metro: Columbus, GA (5 miles) Phenix City, AL homes for sale Phenix City, AL apartments for rent
The final city on our list is Phenix City, located along the Alabama-Georgia border. This city has a population of 38,800 and you can grab a bite at one of the local restaurants, visit one of the parks like Moon Lake, or drive over to nearby Columbus, GA. There’s always something to check out while living in Phenix City.
Methodology: All cities must have over 50,000 residents per the US Census and have a median home sale price under the average median home sale price in Alabama. Median home sale price and median sale price per square foot from the Redfin Data Center during August 2023. Average rental data from Rent.com August 2023. Population and median household income data sourced from the United States Census Bureau.
Mortgage rates have hit a 20-year record high, but buyers are still eager to purchase homes in South Bend, Indiana.
“People want to buy a house even though the interest rates are up right now,” said Jan Lazzara, a real estate agent who has worked in St. Joseph County for more than two decades. “As long as we’re not overpriced, we’re seeing multiple offers.”
Although mortgage rates are slowing the home market across the country, buyers still face competition in South Bend due to limited inventory.
The South Bend-Mishawaka area placed ninth for best emerging housing markets, according to the Wall Street Journal and Realtor.com. The summer ratings indicate areas with appreciating home prices, a strong local economy and attractive lifestyle amenities.
Many cities which placed in the top of the rankings were affordable Midwestern cities. South Bend is no exception. According to Realtor.com, the median housing price in South Bend was about $188,000 in July 2023, compared with a national median housing price of more than $400,000 this year, as reported by the U.S. Census Bureau.
“Generally speaking, I expect home prices in South Bend to be lower than most of the country,” said John Stiver, a Notre Dame finance professor who teaches macroeconomics.
After a 11-year incline, housing prices in the U.S. began falling on an year-over-year basis this April. In South Bend-Mishawaka, prices are still increasing, though not as quickly as in 2022. Between the second quarter of 2023 and the second quarter of 2022, the South Bend-Mishawaka all-transactions housing price index increased 9.2%, the slowest year-over-year increase since the beginning of 2021, according to data from the U.S. Federal Housing Finance Agency and the St. Louis Federal Reserve.
“It looks like the rate of change of prices is going down,” Stiver said about South Bend-Mishawaka.
The average South Bend home value at the end of July was 4.6% higher than the same time last year, according to a Zillow report. The majority of homes in South Bend were sold for equal to or more than asking price in August, according to a Rocket Homes report.
“It’s been wonderful, one of my busiest years yet,” Lazarra said about the market. “The problem that we’re having is that there’s not a lot of inventory.”
Across the nation, housing inventory is down about 8%, according to data from the St. Louis Federal Reserve. In the South Bend-Mishawaka area, housing inventory decreased about 5% between August 2022 and August 2023.
Due to record-high mortgage rates, many existing homeowners don’t want to put their homes on the market and give up low interest rates.
“People are afraid to list because they have a low interest rate,” Lazzara said.
But the high interest rates aren’t strangling buyer demand.
On a home she listed last week, Lazzarra received three overbid offers in less than a couple days. Another one of her listings received 27 offers.
She said a large portion of demand is from first-time home buyers looking for homes in the $150,000 to $300,000 price range. Many are moving to St. Joseph County for jobs at Notre Dame and the local hospitals.
According to data from the U.S. Census Bureau, the population of South Bend and St. Joseph County remained relatively unchanged between April 2020 and July 2022.
Even though the local population is not increasing and the costs of borrowing are high, limited inventory is keeping prices high. For those who are moving, finding a home near South Bend is difficult.
Tim Travis, chief executive for a local medical foundation, closed on a home in Granger, Indiana in March 2023. Travis, his wife and three sons moved from Louisville, Kentucky because of a job promotion that came with a significant moving package.
“I couldn’t have moved up here and benefited from it for less than $100,000 probably,” Travis said.
Although Travis traded a 3% mortgage rate for a rate of about 5%, he said the promotion justified the higher mortgage payments.
Still, “it would make a huge difference in my mortgage payment if rates came down,” he said. “I’d like to put those couple hundred dollars towards something else.”
Last spring, Travis had a hard time finding homes for sale, especially in his desired school districts. Travis moved to Indiana in November 2022 before his family joined up with him. He spent months looking for the right home.
“I was on it two to three days a week. It was like a second job, looking for housing,” he said. “It’s like going into a department store to look for clothes, and there’s no clothes.”
When he finally found a 5-bedroom, 5,400 square foot home in a school district his family liked, he quickly put in a competitive offer just under $600,000.
Travis got the house. He also gained a deeper understanding of limited housing inventory in St. Joseph County.
“The interesting thing about it all is that the housing supply has gone down because people can’t move,” Travis said. “I wouldn’t want to be looking right now,” he said a few months after his March 2023 closing.
Tags: home market, housing inventory, local economy, Mishawaka, mortgage, mortgage rates, Realtor.com, South Bend, St. Joseph County, Zillow
The average cost of homeowners insurance in Maine is $1,020 per year, or about $85 per month, according to a NerdWallet analysis. That’s less than the national average of $1,820 per year.
We’ve analyzed rates and companies across the state to find the best homeowners insurance in Maine.
Note: Some insurance companies included in this article may have made changes in their underwriting practices and no longer issue new policies in your state. Even if an insurer serves your state, it may not write policies for all homes in all areas.
Why you can trust NerdWallet
Our writers and editors follow strict editorial guidelines to ensure fairness and accuracy in our writing and data analyses. You can trust the prices we show you because our data analysts take rigorous measures to eliminate inaccuracies in pricing data and may update rates for accuracy as new information becomes available.
We include rates from every locale in the country where coverage is offered and data is available. When comparing rates for different coverage amounts and backgrounds, we change only one variable at a time, so you can easily see how each factor affects pricing.
Our sample homeowner had good credit, $300,000 of dwelling coverage, $300,000 of liability coverage and a $1,000 deductible.
The best homeowners insurance in Maine
If you’re looking to buy homeowners insurance from a well-rated national brand, consider one of these insurers from NerdWallet’s list of the best homeowners insurance companies.
More about the best home insurance companies in Maine
See more details about each company to help you decide which one is best for you.
State Farm
Well-established insurer with a lengthy list of coverage options.
Coverage options
More than average
Average set of discounts
NAIC complaints
Fewer than expected
State Farm
Well-established insurer with a lengthy list of coverage options.
Coverage options
More than average
Average set of discounts
NAIC complaints
Fewer than expected
State Farm is a great choice for homeowners who like to work directly with a representative, as the company sells policies through a wide network of agents. And its attention to customer service has paid off; the company has fewer customer complaints to state regulators than expected for a company of its size.
State Farm offers a free Ting device as a perk for home insurance policyholders. Ting is a smart plug that monitors your home’s electrical network to help prevent fires.
Chubb
Perks and high coverage limits for affluent homeowners.
Coverage options
About average
Great set of discounts
NAIC complaints
Far fewer than expected
Chubb
Perks and high coverage limits for affluent homeowners.
Coverage options
About average
Great set of discounts
NAIC complaints
Far fewer than expected
Chubb generally serves affluent policyholders with high-value homes, offering lofty coverage limits and plenty of perks. For example, the company covers water damage from backed-up sewers and drains, and pays to bring your home up to the latest building codes during reconstruction after a claim. (Many insurers charge more for these types of coverage.)
Chubb policyholders may also be able to take advantage of the company’s HomeScan service, which uses infrared cameras to look for problems behind the walls of your home.
Vermont Mutual
4.5
NerdWallet rating
Regional insurer since 1828, selling homeowners insurance in the Northeast through independent agents.
Coverage options
About average
Very few discounts
NAIC complaints
Far fewer than expected
Vermont Mutual
4.5
NerdWallet rating
Regional insurer since 1828, selling homeowners insurance in the Northeast through independent agents.
Coverage options
About average
Very few discounts
NAIC complaints
Far fewer than expected
Founded in 1828, Vermont Mutual sells homeowners insurance through local independent agents. The company stands out for service, drawing far fewer complaints than expected for an insurer of its size.
You may be able to add coverage for major appliances such as water heaters, laundry machines or solar energy systems. Other endorsements may be available to cover identity theft, damage to underground service lines, backed-up drains and theft of expensive jewelry.
Hanover
Best for homeowners looking for many ways to customize their policy.
Coverage options
More than average
Average set of discounts
NAIC complaints
Far fewer than expected
Hanover
Best for homeowners looking for many ways to customize their policy.
Coverage options
More than average
Average set of discounts
NAIC complaints
Far fewer than expected
The Hanover gives homeowners lots of choices. You can opt for an auto/home package, a policy designed for high-value homes or a standalone policy for a standard house. You can further customize your policy with a range of coverage options for things like guaranteed replacement cost coverage, which will pay as much as it takes to rebuild your home after a disaster.
The Hanover sells policies exclusively through local independent agents. That means online quotes aren’t available, but you can get personal service to help you choose the right coverage.
How much does homeowners insurance cost in Maine?
The average annual cost of home insurance in Maine is $1,020. That’s 44% less than the national average of $1,820.
In most U.S. states, including Maine, many insurers use your credit-based insurance score to help set rates. Your insurance score is similar but not identical to your traditional credit score.
In Maine, those with poor credit pay an average of $2,085 per year for homeowners insurance, according to NerdWallet’s rate analysis. That’s 104% more than those with good credit.
Average cost of homeowners insurance in Maine by city
How much you pay for homeowners insurance in Maine depends on where you live. For instance, the average cost of home insurance in Portland is $1,035 per year, while homeowners in Bangor pay $1,000 per year, on average.
Average annual rate
Average monthly rate
Scarborough
South Portland
Waterville
The cheapest home insurance in Maine
Here are the insurers we found with average annual rates below the Maine average of $1,020
NerdWallet star rating
Average annual rate
Vermont Mutual
4.5
NerdWallet rating
Concord Group
4.0
NerdWallet rating
Union Mutual
Patriot Insurance
Patrons Oxford
What to know about Maine homeowners insurance
When shopping for home insurance in Maine, homeowners should consider the risks they could see, including severe winter weather, flooding, coastal storms and wildfire.
Winter weather
Maine’s snowy season can run from October to May, which means heavy snowfall and freezing temperatures. Both of these can spell disaster for homeowners, including roof damage, burst pipes and structural issues caused by the weight of snow and ice.
Homeowners insurance generally covers winter storm-related damages, but some types of winter weather damage may require extra coverage. For instance, you’ll typically need a separate flood insurance policy to cover flood damage caused by snowmelt.
Flooding
Heavy rain or snowmelt can cause flooding across the state of Maine. Significant water damage can result in high repair costs for homeowners, and standard home insurance policies do not cover flooding. As a result, homeowners in flood-prone areas should consider buying separate flood insurance.
To find out your risk, check out the Federal Emergency Management Agency’s flood maps and RiskFactor.com, a website from the nonprofit First Street Foundation. Even if your property is deemed low risk, it may be worthwhile to purchase flood insurance for extra peace of mind.
Remember that while you can purchase flood coverage at any time, there’s typically a 30-day waiting period before the insurance takes effect. Here’s more information about flood insurance and waiting periods.
Hurricanes and coastal storms
Hurricanes are less frequent in Maine than in the more southerly states, but coastal storms of all kinds still damage Maine property. Standard home insurance typically covers damage caused by storms, but read your policy carefully, as you may have separate deductibles for hurricanes and wind.
Hurricane deductibles can be from 1% to 10% of your dwelling coverage, or sometimes they can be a flat fee. For example, your policy may have a $1,000 deductible for most claims and a 2% deductible for hurricane-related claims. If your home has $200,000 of dwelling coverage, you would be responsible for $4,000 before your insurance pays for the rest of the hurricane-related damage.
Remember that you will also need a separate flood insurance policy to protect against flooding due to coastal storms.
Wildfire
Wildfires are common in Maine, especially in wooded and rural areas. While the damage caused by fire is typically covered by standard home insurance, it’s essential to understand the limits of that coverage.
Residents of high-risk areas should read their policies closely to understand any exclusions. Pay particular attention to the dwelling coverage limit, which is how much the insurance company will pay to rebuild your house. Check with your insurer to ensure you have enough coverage to rebuild if necessary.
Maine insurance department
The Maine Bureau of Insurance oversees the state’s insurance industry and maintains a website that provides consumer resources on homeowners insurance.
If you need to file a complaint against your insurer, you can do so online or by mail. Don’t hesitate to contact the bureau with questions or for help with your complaint at 800-300-5000 or [email protected].
Looking for more insurance in Maine?
Frequently asked questions
Is homeowners insurance required in Maine?
Homeowners insurance is not required by Maine state law. However, your lender may require you to purchase homeowners insurance.
Does Maine homeowners insurance cover flooding?
Flooding is not covered under standard Maine homeowners insurance. You will want to purchase a separate flood policy if you live in a high-risk area.
How can I save money on homeowners insurance in Maine?
There are several ways to save money on home insurance in Maine:
Shop around to make sure you’re getting the best rate.
Choose a higher deductible. In case of any claims, you’ll pay more out of pocket, but your premiums will be lower.
DBRS, Inc. (DBRS Morningstar) finalized its following provisional ratings on the Mortgage Pass-Through Certificates, Series 2023-DSC2 (the Certificates) to be issued by J.P. Morgan Mortgage Trust 2023-DSC2 (JPMMT 2023-DSC2):
— $201.2 million Class A-1 at AAA (sf) — $201.2 million Class A-1-A at AAA (sf) — $201.2 million Class A-1-A-X at AAA (sf) — $201.2 million Class A-1-B at AAA (sf) — $201.2 million Class A-1-B-X at AAA (sf) — $201.2 million Class A-1-C at AAA (sf) — $201.2 million Class A-1-C-X at AAA (sf) — $32.0 million Class A-2 at AA (high) (sf) — $32.0 million Class A-2-A at AA (high) (sf) — $32.0 million Class A-2-A-X at AA (high) (sf) — $32.0 million Class A-2-B at AA (high) (sf) — $32.0 million Class A-2-B-X at AA (high) (sf) — $32.0 million Class A-2-C at AA (high) (sf) — $32.0 million Class A-2-C-X at AA (high) (sf) — $34.5 million Class A-3 at A (sf) — $34.5 million Class A-3-A at A (sf) — $34.5 million Class A-3-A-X at A (sf) — $34.5 million Class A-3-B at A (sf) — $34.5 million Class A-3-B-X at A (sf) — $34.5 million Class A-3-C at A (sf) — $34.5 million Class A-3-C-X at A (sf) — $14.8 million Class M-1 at BBB (low) (sf) — $10.8 million Class B-1 at BB (low) (sf) — $7.9 million Class B-2 at B (low) (sf)
Classes A-1-A-X, A-1-B-X, A-1-C-X, A-2-A-X, A-2-B-X, A-2-C-X, A-3-A-X, A-3-B-X, and A-3-C-X are interest-only(IO) exchangeable certificates. The class balances represent notional amounts.
Classes A-1-A, A-1-B, A-1-C, A-2-A, A-2-B, A-2-C, A-3-A, A-3-B, and A-3-C are also exchangeable certificates.
The exchangeable classes can be exchanged for combinations of depositable certificates as specified in the offering documents.
The AAA (sf) ratings on the Certificates reflect 34.70% of credit enhancement provided by subordinated certificates. The AA (high) (sf), A (sf), BBB (low) (sf), BB (low) (sf), and B (low) (sf) ratings reflect 24.30%, 13.10%, 8.30%, 4.80%, and 2.25% of credit enhancement, respectively.
Other than the specified classes above, DBRS Morningstar does not rate any other classes in this transaction.
This transaction is a securitization of a portfolio of fixed- and adjustable-rate, investor debt service coverage ratio (DSCR; 92.0%) and conventional (8%), first-lien residential mortgages funded by the issuance of the Certificates. The Certificates are backed by 950 mortgage loans (representing 1,546 properties) with a total principal balance of $308,148,236 as of the Cut-Off Date (August 1, 2023).
JPMMT 2023-DSC2 represents the third securitization issued from the JPMMT-DSC shelf (the first of such rated by DBRS Morningstar), which is generally backed by business-purpose investment property loans primarily underwritten using DSCR. J.P. Morgan Mortgage Acquisition Corp. (JPMMAC) serves as the Sponsor of this transaction.
The mortgage loans were underwritten to program guidelines for business-purpose loans that are designed to rely on property value, the mortgagor’s credit profile, and predominantly the DSCR, where applicable. Since the loans were made to investors for business purposes, they are exempt from the Consumer Financial Protection Bureau’s Ability-to-Repay (ATR) rules and the TILA/RESPA Integrated Disclosure rule.
JPMMAC, acquired (or in advance of closing, will have acquired) the loans directly from originators, or in other cases certain third-party initial aggregators (B4 Residential Mortgage Trust, Series I, B4 Residential Mortgage Trust, Series IV, (together, B4), MAXEX Clearing LLC (MAXEX) ,and Oceanview Dispositions, LLC (Oceanview) that directly or indirectly acquired other mortgage loans. On the closing date, JPMMAC will sell all of its interest in the mortgage loans to the depositor. Various originators, each generally comprising less than 15% of the pool (except LendingOne LLC with 17.7%), originated the loans. As further detailed in this report, DBRS Morningstar did not perform individual originator reviews for the purpose of evaluating the mortgage pool.
The Sponsor, or a majority-owned affiliate, will retain an eligible vertical interest representing at least 5% of the aggregate fair value of the Certificates, other than the Class A-R Certificates, to satisfy the credit risk-retention requirements under Section 15G of the Securities Exchange Act of 1934 and the regulations promulgated thereunder. Such retention aligns Sponsor and investor interest in the capital structure.
On any date following the date on which the aggregate unpaid principal balance (UPB) of the mortgage loans is less than or equal to 10% of the Cut-Off Date balance, the Optional Clean-Up Call Holder will have the option to terminate the transaction by directing the Master Servicer to purchase all of the mortgage loans and any real estate owned (REO) property from the Issuer at a price equal to the sum of the aggregate UPB of the mortgage loans (other than any REO property) plus accrued interest thereon, the lesser of the fair market value of any REO property and the stated principal balance of the related loan, and any outstanding and unreimbursed servicing advances, accrued and unpaid fees, any non-interest-bearing deferred amounts, and expenses that are payable or reimbursable to the transaction parties.
Of note, the representations and warranty (R&W) framework of this transaction, while still containing certain weaknesses, does utilize certain features more closely aligned with post-crisis prime transactions, such as automatic reviews at 120-day delinquency and the use of an independent third party R&W reviewer. For this, and other reasons as further detailed in Representations and Warranties section of the rating report, this framework is perceived as stronger than that of a typical Non-QM/DSCR transaction..
NewRez LLC d/b/a Shellpoint Mortgage Servicing will act as the Servicer for all of the loans following the servicing transfer date. Shellpoint currently services 44.9% of the pool. Prior to the servicing transfer date, Fay and Selene service 44.6% and 10.5% of the pool, respectively, as Interim Servicers. Computershare Trust Company, N.A. (rated BBB with a Stable trend by DBRS Morningstar) will act as the Paying Agent, Certificate Registrar, and Custodian.
For this transaction, the Servicer will fund advances of delinquent principal and interest (P&I) until loans become 120 days delinquent or are otherwise deemed unrecoverable. Additionally, the Servicer is obligated to make advances in respect of taxes, insurance premiums, and reasonable costs incurred in the course of servicing and disposing of properties (servicing advances). If the Servicer fails in its obligation to advance, the Master Servicer is obligated to make such advance to the extent it deems the advance recoverable. If the Master Servicer fails in its obligation to advance, the Securities Administrator is obligated to make such advance to the extent it deems the advance recoverable.
The transaction employs a sequential-pay cash flow structure with a pro rata principal distribution among the senior classes (Classes A-1, A-2, and A-3) subject to certain performance triggers related to cumulative losses or delinquencies exceeding a specified threshold (Trigger Event). Prior to a Trigger Event, principal proceeds can be used to cover interest shortfalls on Classes A-1, A-2, and A-3 before being applied to amortize the balances of the Certificates. After a Trigger Event, principal proceeds can be used to cover interest shortfalls on Classes A-1 and A-2 sequentially (IIPP). For the more subordinate Certificates, principal proceeds can be used to cover interest shortfalls as the more senior Certificates are paid in full.
Excess spread, if available, can be used to cover (1) realized losses and (2) cumulative applied realized loss amounts preceding the allocation of funds to unpaid Cap Carryover Amounts due to Classes A-1 down to A-3. Interest and principal otherwise payable to Class B-3 interest and principal may be used to pay the Cap Carryover Amounts.
The rating reflects transactional strengths that include the following: — Improved underwriting standards; — Certain loan attributes; — Robust pool composition; — Satisfactory third-party due-diligence review; and — 100% of the loans are current by MBA definition.
The transaction also includes the following challenges: — 100% investor loans; — Four-month servicer advances of delinquent P&I; and — Representations and warranties framework.
The full description of the strengths, challenges, and mitigating factors are detailed in the related report.
DBRS Morningstar’s credit ratings on the Certificates address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations for the rated Certificates are the Interest Distribution Amount, Interest Carryforward Amount, and the Class Principal Amount.
DBRS Morningstar’s credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction documents that are not financial obligations. For example, in this transaction, DBRS Morningstar’s ratings do not address the payment of any Cap Carryover Amount based on its position in the cash flow waterfall.
DBRS Morningstar’s long-term credit ratings provide opinions on risk of default. DBRS Morningstar considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.
ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.
A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at https://www.dbrsmorningstar.com/research/416784 (July 4, 2023)
Notes: All figures are in U.S. dollars unless otherwise noted.
The principal methodology applicable to the credit ratings is RMBS Insight 1.3: U.S. Residential Mortgage-Backed Securities Model and Rating Methodology (August 9, 2023; https://www.dbrsmorningstar.com/research/418987).
Other methodologies referenced in this transaction are listed at the end of this press release.
The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.
The credit rating was initiated at the request of the rated entity.
The rated entity or its related entities did participate in the credit rating process for this credit rating action.
DBRS Morningstar had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.
This is a solicited credit rating.
Please see the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.
DBRS, Inc. 140 Broadway, 43rd Floor New York, NY 10005 USA Tel. +1 212 806-3277
The credit rating methodologies used in the analysis of this transaction can be found at: https://www.dbrsmorningstar.com/about/methodologies.
— Assessing U.S. RMBS Pools Under the Ability-to-Repay Rules (April 28, 2023; https://www.dbrsmorningstar.com/research/413297)
— Interest Rate Stresses for U.S. Structured Finance Transactions (June 9, 2023; https://www.dbrsmorningstar.com/research/415687)
— Third-Party Due-Diligence Criteria for U.S. RMBS Transactions (September 11, 2020; https://www.dbrsmorningstar.com/research/366613)
— Representations and Warranties Criteria for U.S. RMBS Transactions (May 16, 2023; https://www.dbrsmorningstar.com/research/414076)
— Legal Criteria for U.S. Structured Finance (December 7, 2022; https://www.dbrsmorningstar.com/research/407008)
— Operational Risk Assessment for U.S. RMBS Originators (July 17, 2023; https://www.dbrsmorningstar.com/research/417275)
— Operational Risk Assessment for U.S. RMBS Servicers (July 17, 2023; https://www.dbrsmorningstar.com/research/417276)
For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at [email protected].