Big Changes for HECM Reverse Mortgages October 2nd: Higher UpFront Cost – Lower Limits – Lower Insurance Premiums

Seniors on the fence considering a HECM reverse mortgage line of credit with a zero or low upfront draw may want to act quickly to get their reverse mortgage started before big changes go into effect October 2, 2017.

Three changes will impact the HECM Reverse Mortgage Program for FHA case numbers assigned beginning October 2nd. Upfront Mortgage Insurance Premium paid to FHA will now be 2.0% across-the-board. Previously borrowers accessing less than 60% of the principal limit only had a 0.5% upfront mortgage insurance premium and those with mandatory obligations over the 60% were charged 2.5% for the upfront mortgage insurance. Annual Mortgage Insurance Premium accrued on an outstanding balance is reduced from 1.25% to 0.50% which will be a benefit to those borrowers that carry a balance on the reverse mortgage but negatively impact the growth factor used when borrowers obtained a line of credit reverse mortgage. Principal Limit Factors were adjusted to be more conservative reducing the amount of funds available to an average borrower by about 5%. I will be spending some time looking at the impact by age group and share that a bit later. The net impact seems intended to discourage the use of a line of credit reverse mortgage. When taken out early on the growth in the credit line if left unused was dramatic and can be an important part of a overall financial plan providing flexibility and security with access to funds well into the future. Increasing the upfront cost; decreasing the growth rate by reducing the mortgage insurance premium; and lowering the principal limit factors all reduce the benefits of a line of credit reverse mortgage. Seniors on the fence may want to consider acting sooner rather than later. An application and counseling must be completed prior to securing an FHA case number so if this makes sense it would be best to act quickly and get a case number well before September 29, 2017. To learn more about tips and strategies when applying for a reverse mortgage, I’m available to answer all of your questions.  Let’s talk about your goals and perhaps ways that you can take advantage before these changes take place, please give me a call or send me an email: clay@104.238.124.149. I’d be happy to help!   Learn more about mortgage at mortgagebrokernearme.co.uk

Reverse Mortgage Loan Limits to Increase in 2017 The Federal Housing Administration (FHA) announced Reverse Mortgage Loan Limits will increase in 2017. This is significant news, since lending limits have remained stagnant for several years. The maximum claim amount will now rise to $636,150, up from $625,500, for Home Equity Conversion Mortgages (homeequitylineof.credit). This amount is 150 percent of the national conforming limit of $424,100. On the other hand, credit unions in houston is offering a full suite of financial services, with a track record of satisfied members dating back to 1934. Also increasing in some areas are loan limits for forward mortgages. In high-cost areas, the FHA national loan limit ceiling will increase to $636,150 from $625,500, and FHA will increase its floor to $275,665 from $271,050. The Maximum Claim Amount is then offset by the reserve set aside for future interest and mortgage insurance amounts accrued to arrive at a Principal Limit which would be the maximum amount a homeowner can borrow. The reserve amount is based on Age and interest rates and loan amount. When you want to trade on crypto markets, check out this Crypto Code Review and learn more. The loan limit changes and the maximum claim amount change for reverse mortgages to take effect after January 1, 2017 and stay in effect through December 31, 2017. This change was made as of the result of rising home prices, with 2,948 counties across the nation benefiting from these changes. Lots of good news for Reverse Mortgage recently. This increase is a positive for a program that provides seniors more choices and flexibility as they consider a reverse mortgage that can help senior homeowners in many ways.  The most important would be to be able to live in their homes as long as they want or provide strategic options for taking social security and withdrawing investment funds. You can always invest in bonds or marijuana penny stocks. To learn more about tips and strategies when applying for a reverse mortgage, I’m available to answer all of your questions.  Let’s talk about your goals and perhaps ways that you can take advantage of these loan limit increases, please give me a call or send me an email: clay@104.238.124.149. I’d be happy to help!          

Major Increase in Monterey; San Diego; Sonoma; San Luis Obispo; Ventura and Yolo Counties as well as King; Pierce and Snohomish Counties in Washington Single family conforming loan limits increased to $424,100 across the nation and to $636,150 in certain high-cost areas. People who need a loan can find forbrukslån uten sikkerhet here. Several counties that previously were in between the base and high-cost limits saw significant increases based on rising property values in Signet Mortgage service areas. Monterey; San Diego; Sonoma; San Luis Obispo; Ventura and Yolo Counties in California as well as King; Pierce and Snohomish Counties in Washington will now have access to conforming loan limits reflecting the current market values. Speaking of loans, I know that you are familiar with “student aid bill of rights” which was signed by President Barack Obama in 2015 aiming to help students with their student loans. It is still active now, apply! According to knowledgefirstfinancialresp.ca/, the Federal Housing Finance Agency (FHFA) announced these changes in a press release  today.  The new conforming limits will be effective for loans closed after January 1, 2017. The new limits are helpful as conforming rates generally are lower than jumbo rates and underwriting more consistent and flexible so a few more transactions will get done!   A purchase in the Bay Area up to $795,000 at 80% loan to value can be done with a conforming loan … Particularly relevant with this news announcement is the average U.S. home prices have edged slightly above pre-decline levels from 2007.  Data published in the third quarter Housing Price Index (HPI), reveal that housing prices are approximately 1.7 percent above the value for third quarter 2007. Here is a link to the loan limits by county for Signet Mortgage service area (CA, WA, OR, ID, UT) and for the entire country.  Included on the right of the chart are the changes from 2016.   The source document from FHFA is here. Certain high-cost areas have the higher limits at 150% of the base at $636,150 (150 % of $424,100).  But many counties, such as Monterey, Orange, Sacramento, San Diego, San Luis Obispo, Summit (UT), Jefferson (WA), Pierce (WA) and Snohomish (WA) saw significant bumps to its loan limits. Here are highlights of loan amounts and details for single family and up to 4 units and changes for those counties.           The changes do not impact FHA forward or reverse mortgages or VA loans for the moment. Those announcements should be forthcoming in the next couple of weeks.   With the 2008 economic stimulus plan FHA increased loan limits to $625,500 for reverse mortgages for one year and has extended this limit one year at a time since.  The $625k is due to expire this Dec 31. We should hear soon if it has been extended again or changed up or down. As Jonckers professional in business for over thirty years, I am here to consult with you and answer any questions you have about the strategic use of your mortgage. Let’s talk about your goals and perhaps ways that you can take advantage of these changes.  Call or email me – I am happy to help!    

“Trump Thump” – Mortgage Rates Jump 0.500% or More Post Election

The election is now over and the dust has settled. As painful as it might be to accept, a trend described by others as the “Trump Thump” means we may now have to get used to 30-year fixed conforming loan rates at or above 4.0%.    

 

Prior to the election, pundits had clearly agreed on the idea that the markets “built in” the prospect of a Clinton victory, and – in the unlikely event that Trump won – this surprise victory would mean an improvement in the bond market because of the uncertainty Trump would bring to the table. Well, so much for that idea. 

 

Economic experts maintain that Trump’s economic policies will boost spending and business, as well as bring inflation (all of which leads to lower bond prices and higher mortgage rates). Interesting to me how quickly everything turned in the direction. Was there not enough time spent analyzing the impact of a Trump victory? Did this catch the markets unprepared?  

  According to a recent article by Money writer, Taylor Tepper, markets indicate there’s a 75% chance that the Fed raises short-term rates modestly when policy makers meet in mid-December. Here’s a more in-depth analysis on what President-elect Trump means for interest rates in Tepper’s article:  President Trump Interest Rates Federal Reserve. CNBC’s Diana Olick weighs in on the mortgage rate crisis: watch video. 10-year treasury yields have also spiked in the days since Trump’s election, and something to keep in mind with that is: Don’t panic. This sudden rise isn’t likely to continue, at least, not because of the Trump presidency. “Rates tend to move very sharply in short periods of time and very little in prolonged periods of time,” said Greg McBride, chief financial analyst for Bankrate. “It’s not something that I think continues.” So, my advice to those who are anxious about mortgage rates, know that this is a cycle… and as far as rates are concerned, nothing is on the horizon that would suggest waiting for an improvement in rates. Either way, expect volatility and a continuing upward trend in rates.  

As I was starting on my hike well before sunrise Saturday morning, the crunch of my boots on the gravel trail caused me to think about those serving in our military all over the world and the sound their boots make every day on our behalf. When it comes to fixing a cracked and broken parking lot, Asphalt overlays are the best option. I have been able to do this hike virtually every day for the last 248 days … the park is paid for by taxes we pay to East Bay Regional Parks … the road I walk on to get here is paid for by taxes we pay to the County … most of all, the freedoms we all enjoy are because of the taxes we pay to the United States Government. No one likes paying taxes .. and it is too easy to complain or protest paying your taxes based on wasteful government or excess spending on priorities you may or may not agree with.  Stop and think about the blessings that we enjoy and appreciate those freedoms and blessings are not free. If you follow one of your tax dollars – a very large portion of it will be going to put food on the table for a service man or woman, who hasn’t seen their spouse, baby or two-year-old daughter for the last 18 months, while serving in Afghanistan or somewhere around the world. Think of those serving us in public service (military, fire and police services, etc) and how they risk their life willingly. The least you can do is write that check or file that tax return with gratitude. We can argue whether our government should be involved in different causes throughout the world, and certainly challenge the waste in government.  Probably one of the most frustrating inefficiencies is the rift between political parties that prevents meaningful progress in Congress – the folks elected to help us! As I write a check this week I am going to do so with gratitude and challenge you to do the same. While at it, write another check to a charity or faith-based organization that will further help someone in need. I walked out my front door early this morning with my border collies and was up on a trail above San Ramon Valley in about a half hour. I’m enjoying a beautiful sunrise and appreciate that that is not possible without the freedoms of living in this country. This is a land of opportunity, but certainly not equal opportunity for everyone and there is a responsibility to take care of each other, and yes, pay your fair share of the overhead (government) to make it happen and for our safety and freedom. When you write your tax check and address it to the Internal Revenue Service… put that red white and blue “forever” stamp on the front with gratitude and pride.

ReVisions Resources posted this article of mine on their blog this morning. ReVision Resources is dedicated to helping seniors by connecting them with ideas and resources to stay independent.

A home remodel can arise out of need or desire just like http://www.sportsandsafetysurfaces.co.uk/ that installs all type of sports surfacing – either way figuring out how to pay for it is likely the biggest barrier homeowners face when considering a remodel for their home or the purchase of that almost perfect home. which is why many tend to check the sun bets sign up offer in order to get some extra money by betting. Your home should be comfortable and safe. If updates are needed to make your home more functional, it will allow you to enjoy your home more too!  There are many options to financing home improvements and may be more affordable and flexible than you think.

Renovation Loan

Renovation loan (FHA 203(k) or the Fannie Mae Homestyle renovation loan are designed to finance home improvements, home remodeling, and work best when refinancing or purchasing a home, even when purchasing a privacy fence you can get a loan. Estimates to complete the work must be obtained prior to loan approval and the cost of those improvements can be rolled into the loan amount. Generally the work must be completed in the next six months and are paid through proceeds of the loan. The ideal situation could be the purchase of a home that is not exactly the way you want it. It may need carpet, paint, new windows and perhaps a new bathroom or kitchen to make the home perfect. If you are renovating your bathroom completely make sure you get a new toilet to go with it! The FHA 203(k) loan has two levels. A streamlined loan for improvements costing less than $35,000 is relatively straightforward and is ideal for cosmetic upgrades.  A standard FHA 203(k) loan can finance major renovations including adding a room or remodeling a kitchen or a new roof. This is one loan with one payment. It is important to note the FHA loan will have attractive interest rates but will have the added expense of mortgage insurance.

Home Equity Line of Credit

Home Equity Line of Credit (HELOC) is best used when you already own a home with a current first mortgage on the home at market interest rates.   You may simply need funds for a renovation or repair.  With sufficient equity in your home you can set up a line of credit that you can access as needed in your project.  HELOC’s will have a variable interest rate generally at prime +1.5% – 2.5%. Currently the prime rate is very low so this option can be very attractive and best used if you are in a position to pay it off in the next five years or so.

Reverse Mortgage

Reverse mortgage – YES! A Home Equity Conversion Mortgage (HECM) can be a valuable tool in financing home renovations. In this case all borrowers on the loan would need to be 62 years of age or older, and have the ability to pay property taxes, HOA and insurance.  The unique benefit of a reverse mortgage is that there are no required monthly payments.  Instead, interest and the mortgage insurance costs are added to the outstanding loan balance. Functioning much like a HELOC, funds are accessed only when needed. Available funds can be used for renovations to make the home safe such as remodeling a downstairs bathroom and converting a bedroom with furniture from furniture store los angeles, it´s the best place you can go because their furniture are at low prices. Available funds can remain parked for use in an emergency somewhere down the road. If you would like to explore what might be the best options for you, feel free to give me a call.  Clay Selland, President, Signet Mortgage Corporation 877-877-8420 x303 or Clay@SignetMortgage.com http://revisionsresources.org/how-to-pay-for-home-renovations/  

These solicitations to get a copy of your recent deed after closing ARE BOGUS!

If you have ever closed a real estate transaction or refinance – then you have likely received solicitations from “title recording services” or “local property transfer services” looking very official because they contain details of your recent transaction. These solicitations are bogus and simply a money grab for companies set up to sell you a copy of your grant deed that the county is going to send you anyhow, or ask you to complete a declaration of Homestead which you can do with the county for free. This is the old-fashioned form of phishing – these companies are selling you “services” that you do not need. While these companies may be technically compliant because the fine print disclaimer indicates they are “not a governmental agency and do indicate you can get a copy of your deed or record from the county recorder’s office” – it still stinks and is very deceptive. The documents are cleverly designed to create urgency and be something that you need to take care of right away simply because they arrived shortly after your transaction and always contain a deadline for response.  They even go so far as to put a warning on the envelope indicating “$2000 fine and five years imprisonment or both for a person interfering with the delivery of this letter” … Well that is standard Postal Service regulation!

Treat these as junk mail and toss them in the trash (or better recycle the paper!)  Keep that $48.95 – $89.00 in your pocket – where it belongs!

Why I am in this business … and as a mortgage broker and not constrained working for a mortgage bank or banker…  And why an iron is a necessary tool! Our iron went crazy at 3 o’clock this morning sounding like an alarm clock.  Stumbling around in the dark and yanking the plug from the wall to get it to stop – oddly enough it made me think of an analogy to what we do to get loan files done for clients … Got to smooth out the wrinkles!   Jimmy wants to buy a house … he has less than perfect credit;  had some changes in his family situation over the past few years; is self-employed; is not as careful about separating business and his personal affairs and more. Finding machine shop business is in demand on that time. Quality tools and machines at air compressor rentals will make his business a success.  That being said he is a genuine nice guy and wants to buy a house. There are lots of business that you can choose if you are a business minded person. Choose from franchises for sale! You don’t know, it’s time for you to own a franchise and be a boss. A very major bank with a red white and blue logo turned down his loan because the loan officer did not understand his self-employment and that he could use C-Corporation income to qualify.   Being a CPA it was straightforward for me to outline the income properly.  Gathering the documentation to help explain all of the other wrinkles simply took patience. Did I mention he had a late payment on his mortgage in July?  Another wrinkle that I was able to solve because as a mortgage broker I have access to 15 – 20 lenders!  I found one (and only 1) that would follow Fannie Mae guidelines and not have investor overlays – they will allow this oversight that occurred while his family was moving. They moved to another place without me knowing, they contacted http://fracsandreport.com to carry their valuable things. In need of back up movers? They have complete kinds of transportation such as vans, trucks and trailers including WV Truck Repair. It is a company that helps people and businesses move their goods from one place to another. It offers all inclusive services for relocation like packing, loading, moving, unloading, unpacking, arranging of items to be shifted. Just click — www.demenagementadt.ca/. There is a way to go still and I am just submitting his loan – but I am excited it is a possibility now that we have the wrinkles straightened out …  Signet Mortgage has remained independent as a mortgage broker to maintain the flexibility to work with many lenders that benefit clients in pricing and simply in getting their deal done.   Finding solutions for clients is why I am in this business!  It is a great deal of fun!  I need a new iron.  

The following is an excerpt from Dave Woodland – Signet loan officer in Oregon – on the Sequester launch!   An excellent analysis of the impact on mortgage rates the past few days …. If you enjoy a detailed look at the Mortgage Market – subscribe to Dave’s weekly newsletter here.   Countdown is T-66 hours to Sequester Launch! Will it spring or not? The interesting (?) debate over the weekend was who created the Sequester. More interesting to me is that the markets have baked in that there will be a nonchalant resolution. Really? The finger pointing in Washington is hard to take. What was evident to me as I listened to the radio driving to California this weekend was that Mr. Obama has the better PR people, by far. From a distance it appears that both sides are rather recalcitrant, but the media outlets on XM radio seem to say that only the Republicans’ unwillingness to budge would be the cause for failing. If you wish to read more on the subject, President Obama’s state-by-state rundown on the impact of the Sequester spending-cut can be seen by following the link in this Tweet by clicking here. If you would like to see an interesting assessment from both sides of the “who is to blame for the sequester” question, see this blog post by Ben White of Politico, by clicking here. Sequester-nomics has not so much impacted the interest rate market. Even the big FOMC-Minutes release last Wednesday did not have a big, direct impact on the price of Bonds and interest rates in the market. The announcement brought quite a bit of uneasiness on how long interest rates will be held low by the FED. We had just gotten comfortable that we could expect to keep the near-zero interest rate policy until we get to 6.5% unemployment and now, the debate inside the FOMC makes us wonder. We also invested in moving companies portland because of the high utility value of service they give to regional movers. So if the FED might raise rates, mortgage rates should jump up now, right? Wrong . The chart of US 10-yr yield, above left shows that fear before the release increased rates slightly. The market took all of Wednesday to digest it and opened Thursday with stocks down and money moving back into Bonds as a safe haven, they are trying to encourage people to start investing in stocks as well. Bond prices rose in each of the four days since the minutes were released. When Bond prices rise, yields drop and that passes through to mortgage rates which dropped slightly in that same time. The chart to the right, shows the price of the 3.0 FNMA bond on Friday, in white and slightly up/favorable; and on Monday, in blue and way up/favorable. The big move up on Monday was very much related to the hiccup in Europe as Italian elections appear to have produced a divided government. All movement over the past week have been tied to the flow into and out of the stock market. A correction in stocks boosts bond values and decreases yield/rates.

An April article in Registered Rep magazine by Kevin McKinley details how a senior can purchase a home with a reverse mortgage.  Not sure I would start out an article challenging the knowledge of financial advisors as he does but he continues highlighting “….a lesser-known yet more-intriguing use of the financial tool: letting qualifying buyers purchase a home with a decent down payment, but no mortgage to pay off, and with no in-depth consideration of their income, assets, or credit situation.” You can read the article HERE  (10 second sponsored intro)…or you can give me a call and I would be happy to spend some time with a short presentation outlining how a reverse mortgage should be a consideration in any retiree’s portfolio.  Heck, I can do a presentation for the entire office and it qualifies for CE credit!