The Appraisal Process-Part I

Part of evaluating the value of your home, is comparing it to other homes in the neighborhood. “Comparable Sales” are used to determine your value.

What is a Comparable?

A “comparable” is a house that was recently sold that is similar to the home being appraised based on certain criteria. This criteria typically includes similarities in style, age, quality, condition, appeal, square footage, time of sale, price range and functional use. 

What is a Sale?

While a comparable is always a sale, a sale is not always a comparable. Even though a sale may have occurred recently and is nearby, there may still be enough differences that a typical buyer for the subject property, would not consider this sale as an alternative option when searching for a home to purchase. 

Therefore, even though the home nearby was similar in age, size, design and appeal, it may be further away from town, or in a different school system than the buyer was interested in or there may be other factors making it less comparable to the one being appraised.  

These factors come in to play when determining what “comps” are utilized for the final report and valuation. When there is a difference between the appraised value and the homeowner’s thoughts on the value, looking into these details often provides the complete answer.

Why is counseling so important?

Since a reverse mortgage is a loan for seniors, the government (FHA) and most responsible lenders will agree that we should take greater efforts to ensure that our elders are properly informed. Education about a loan product that might seem a little foreign or “different” than a typical mortgage is a good thing.

So, FHA decided, rightfully so – that counseling would be required and that it should be performed by an FHA approved housing counselor. This would ensure that the information given was delivered in an unbiased manner.

Read more ….

2019 Lending Limits

We are happy to report that as of January, 2019 HUD has increased the lending limit for reverse mortgages to $726,525. This takes effect for any case numbers issued after 1/1/2019. Otherwise known as the national lending limit, this increase makes more money available on higher value homes.

Keep in mind that the borrower cannot receive this amount, it is only the maximum amount that we can now possibly value a house at – still good news for borrowers in more expensive home areas.

This is also called the maximum claim amount, or MCA. The MCA is defined as the lower of either the appraised value or the lending limit in effect at the time.

NEW Medicare cards for 2018

Medicare is going to be issuing new cards starting in April 2018. ALL Medicare recipients will be issued new cards automatically. Due to identity theft concerns, etc. a person’s SS # will no longer appear on his/her Medicare Card. A person’s NEW Medicare Card will not be a viable way to verify a borrower’s Social Security Number.

Sample NEW card:medicare-new-card-2018

To see the information directly from the Medicare page, click here

During the course of mortgage underwriting, we are required to obtain sufficient evidence of each person’s Social Security Number (SSN) and this is put into the Case Binder for FHA insuring.

We can obtain one of the following documents to verify SSN:

Social Security Card / Social Security 1099 / W-2 / Paystub
Medicare card (OLD-if it has the SS# on it)
SSA verification, along with some other proof of SS#

Please prepare in advance of your applications to document the SS# of each person, as this could now take a little longer if the person needs to request a replacement SS card.

Ed O’Connor, Marketing Manager

eoconnor@firstbankonline.com

Is it a good idea?

There is always a lot of press, articles, opinions etc., as to whether or not a reverse mortgage is a good idea. You may find my position on this a little different – it does not matter what the press says or what your neighbor says.  It matters whether or not this is good for YOU. At FirstBank, our corporate culture is about “Helping others get to a better place”.  That’s it and that is what it is all about.  Sure, if you want a Home Equity Conversion Mortgage, we are happy to help you, but we are also very happy to give you the facts and help you evaluate your own situation – yours, nobody else’s. Since everyone is different and their financial picture is always different, the answer cannot be the same for everyone across the board. Visit us today and let us educate you. If we can help you make that educated decision, the answer about whether a HECM is a good idea is an easy one.  Visit us online to view more, click here

 

Financial Spring Cleaning-2017

Spring cleaning is not always about the garden.  It’s also a great time to review finances and get things in order so you know what you have and what you can use. This site MyCreditUnion.gov had a great article on financial spring cleaning that we thought might interest you. The site has general information from the government about Credit Unions and how they operate, but the article is a good one. Number 4 is a good one: Review Your Budget.  The even have a link to a budget worksheet that you might find very helpful.

As always, part of your retirement financial plan includes knowing what you have AND what you can use. Remember, home equity can be a piece of that equation and we invite you to CONTACT US to learn more about this important part. Education is key, so learning how you might be able to access your home’s equity by using a Home Equity Conversion Mortgage is very useful knowledge. When you learn more about a HECM, you can make educated decisions and FirstBank can help.

Payments to a Reverse Mortgage???

Did you know that you can make payments to a reverse mortgage?  Many people think that since it is not required, that they can’t – and therefore they lose control over the loan balance.  That is another piece about reverse mortgages that is simply not true.  YOU always have control over it, just like you always own your own home.  It is true, that the way Home Equity Conversion Mortgages were designed to work, that they do not require mandatory monthly mortgage payments like a traditional mortgage. BUT, you can make payments; many people do.  They pay interest only, less than interest, more than interest – and they pay it whenever they want.  There is complete flexibility in this type of loan.  As long as you keep your property tax and homeowner’s insurance up to date, you have complete and total control over this very unique mortgage!  Please contact us for more information and we would be happy to explain more.