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.

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 ….

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.

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:

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