San Francisco Chronicle - (Sunday)
Homeowner uses Jumbo reverse mortgage to enhance retirement
Mortgage broker:
John Holmgren, Finance of America Mortgage.
Property type:
in Greenbrae.
Rate: Backstory:
Townhome
Property value: Loan type:
$1.5 million. HomeSafe Jumbo fixed reverse mortgage. 6.99%.
These homeowners were introduced to me by their friends, for whom I had recently arranged a refinance. They have a beautiful townhome in Greenbrae. While they had enough savings and retirement cash flow to make payments on their two mortgages, these payments didn’t leave much left over for travel and other things they had hoped to enjoy in retirement.
Appraisals in the area where their home is located can be very tricky, particularly when the property is a condo/townhome. Because of the wide variety of properties of that type in the area, some of high quality and some of much lesser quality.
Since the objective was to cancel out their mortgage payments and provide a nest egg to fund retirement dreams, the appraised value was critical. The real estate valuation websites I consulted had widely varying value estimates.
I made two suggestions to try to produce the best result:
First, interview (in a courteous way, of course) the appraiser to make sure they had ample experience appraising homes in that area and appreciated the diversity of condo project quality.
Next, I wanted to have data on comparable sales, particularly in the project (there were a few excellent “comps” available) to give the appraiser if they were receptive to receiving that information.
Fortunately, the appraiser was very experienced in the area and appreciated the superiority of their unit. The value came in well within our expectations and produced the desired financial results.
Since loan officers are not allowed to have direct contact with appraisers, the homeowner is the only one who can take effective steps to produce a fair and accurate result. Appraised value is not always critical to the loan outcome, but when it is it pays to take extra steps to improve the chances of success.