As a part of the Federal Housing Administration’s continued efforts to reduce risks for those who utilized reverse mortgages as well as lenders, the federal agency announced this week that it will take a closer look at appraisals and the valuations of properties when assessing reverse mortgage endorsements.
The FHA will perform a risk assessment for all appraisals beginning this month and, in some cases, may require a second appraisal be obtained. The purpose of the new protocol is to avoid over-inflation of property values..
Reverse mortgages, commonly referred to as HECMs, are designed for those 62 years or older. In addition to eliminating the burden of monthly mortgage payments, seniors can fund use a reverse mortgage to fund their longevity. Proceeds can be received in the form of a lump sum, monthly payout or a line of credit which can continue to grow over time.
Meanwhile, conventional conforming no-point 30-year fixed mortgage rates are averaging 4.625 percent, 15-year rates are near 4.15 percent and the 5-year ARM is averaging 4.15 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.