When people start to get serious about finding a new home, generally the first place they look is online. This section offers links to customized home searches and tricks and tips to be more successful in finding what you want.
Want to understand flexible mortgages? Our video this week offers great advice about how they can help you, especially if you’re a first-time home buyer. Check it out even if you’ve bought a house or two; you still might learn something!
Hello. Hello. Hello. Hello peeps. Right in my ear. Yikes. Her good ear. Yep. I am deaf in one ear. So, he’s got my good ear. So, I’m hearing it. That’s why I always sit on the side through every cell of my ear. My whole life is on my wife’s life. Anyway, sometimes my cells don’t want to hear it, but it’s it is what it is. Okay. (00:27) So, we’re here today and we’re happy to be here. Uh Randall and I are your friendly husband and wife pickle team, realtor team here in Prescuit and we love to come to you weekly with crazy little videos and thoughts and things that pop in our head as we’re driving along and we say let’s share that with our folks out there listening. This is a good one. (00:48) This is a good tip. Yep. This is a good one. This is a good tip. So this is about something they’re calling a I call it a flex mortgage. Mhm. Uh, you got to be careful with lending because there are all kinds of regulations. I don’t know if I’m allowed to call it a flex mortgage. (01:07) I know it’s okay to call it a lifestyle home loan because at least somebody who seems to be certified will do that. But I wanted to I wanted to mention this to uh to you guys because most people who are in our sort of sort of either retired or getting ready retired, you should know about this stuff. This will change your life and uh for the better. (01:32) And this is what I call a flex mortgage. So, a flex mortgage is a mortgage where if you don’t want to pay the note for a month, you can just skip it. That’s a flex mortgage. Pretty cool. Yeah. If you want uh let’s say you’ve you for whatever reason, let’s say there’s been a disease and all of a sudden real estate real estate prices are through the roof. (01:55) Now, you have more equity than you ever thought you want and you’re thinking, “If only I could tap into that equity.” You could do that with a flex mortgage. Okay. Uh or a a lifestyle home home loan, whatever they want to call them. The the short answer is this is what they used to call a reverse mortgage. Now stay with us. (02:15) Stay calm because I know as as soon as I say reverse mortgage, people are like, “Oh no, oh no, oh no, I can’t bear it. I can’t can’t bear it. Can’t think about it.” It is a It is a new and improved product. New improved product. It’s not like the old time. Not like the old time. The very first thing you need to understand about the new flex, whatever you want to call it, we call it flex mortgage. (02:39) Okay? Uh the the very first thing you need to understand is that there is no repossession if you run out. All right? So, let me let me back up for those of you who don’t know what a reverse mortgage is. So if you if if you have a mortgage, so you if you are paying your notes, you’re paying a bit of interest and you’re paying a bit of equity early on. (03:04) You’re paying mostly mostly interest. As time goes on, you’re paying equity and you’re paying some interest until finally you’re done. Uh at the end, you’re paying almost all equity until it’s gone. That is a traditional mortgage. With a reverse mortgage, if you don’t pay the let’s say you don’t pay the note on a particular a particular month, well, what they’ll do is they’ll take the money that they thought you were going to pay and they will uh the the equity doesn’t change. (03:36) The equity component doesn’t change because you didn’t pay the equity component, but the interest component they didn’t pay. They’ll take out of your equity. So your equity will start going down. It the longer you do that, the the more your equity will go down. So that’s a reverse mortgage. It used to be that when you ran out of equity, they would kick you out of your home. (03:59) The first thing to know is that doesn’t happen anymore. Not at all. No. The reverse mortgages are now done through FHA and the new rules are they can’t kick you out of your home if you go through all of your equity. all of your equity. Can they kick me out of my home? No, they can’t. Okay. So, you know, I I wasn’t born yesterday, so I raised my hand and I said, “Okay, what about the spouse?” Oh, no. (04:28) The spouse gets to stay there. So, if you pass away, your spouse can still stay in the not kicked out. I said, “Yeah, but you don’t know this spouse. You don’t know this spouse. this guy, he’s uh he’s about 85 and uh he his wife passed away a few years ago and um you know he was sad for a while and then he lost his mind and he remarried. (04:55) So he’s 85, she’s 25. And we’re not talking about what’s that what’s that football coach? Oh, I don’t No, that you know who I’m talking about is Belch or I don’t know sports. I’m totally teased on that, but this is we’re not this is not his story. This is completely hypothetical. So, I got a guy, he’s now 85. (05:17) He lost his mind the last few years after his wife died. He married a girl who’s 25 years old. Yep. Okay. So now, and they have one of these mortgages and he dies. How long can she stay in the home? Yep. The answer is until she dies or she wants to get out of the house, right? If she wants to sell the house, you know, well, okay, that’s a different thing. (05:42) She’s not going to get as much for the equity when she But if she wants to just stay in the house for as long as she may live, and chances are she’s going to outlive him, uh, I mean, she’s going to die at an age more than him. That might be 90 years. Yep. They are on the hook. That’s the way the FHA works. That’s right. (06:01) So, the first thing you need to know is they can’t kick you out of your home. So, yeah. So, if you run through all of your equity, say you have a house uh 800,000 and you have $700,000 worth of equity, 800, you know, or 600,000 and you keep on drawing on that, keep drawing on it and doing this new flex loan. Yeah. (06:19) And you run out of equity. Yep. You’re there. You’re there. You’re not kicked out. They cannot kick you out of your They cannot grab your house from you. Uh if you marry a young person, that’s right. They can’t kick her out or him out as the case where may be. They can’t kick the spouse out until the spouse either dies or wants to sell the house. Yeah. (06:42) It’s kind of kind of a cool product. Uh some people uh are afraid to go through their nest egg. They like to have that nest egg and they’re like, well, you know, so this could be another another avenue of not touching that nest egg and just using the equity in your home. Let me play out a typical scenario with a typical mortgage. (07:03) So, you have a couple, they buy a home with a standard mortgage, they’re in their 60s. Uh, you know, they have planned for their retirement and everything, but life happens. And so, now they’re in their 80s and uh they they have not really maintained the home well. They don’t have money to uh do the maintenance on the home. uh they struggle to make the mortgage payment every month, right? And we see this a lot because if they if they don’t, they know they’re evicted, right? Uh so they’re scrimping and they’re saving until finally it let their late (07:40) 80s let’s say uh they finally pass at which point the home goes to their children and their children immediately sell the home at you know 60 70 cents on the dollar at a big loss because of all the deferred maintenance because of all the deferred maintenance and everything else. Nobody wants to live there. (08:01) Nobody wants mom’s, you know, china cabinets and all that other kind of stuff. So, they immediately want to sell. It’s it’s sold at a discount anyway and then they take the proceeds and they divvy it up. Yep. Well, with a reverse mortgage, what would happen is the same sort of thing. They would they would, you know, inherit the home or at least the equity. (08:24) Uh they would sell the home and it would net out. They would not have scrimped and saved. They would have used some of the equity to maintain the home. Yep. So it would it would command a better price when they sell it. It would be in better shape and they wouldn’t have stressed. And in the end, their children may end up with maybe a few extra a few less dollars, but maybe not because they’ve maintained the home the way that it should. (08:54) It it kind of plays out a lot better in the fourth quarter than it does otherwise, right? And if you take away the risk of getting kicked out of the home because you run out of equity because of something unforld, um it doesn’t matter. You get to stay in the home. Yes. So, we it’s kind of an interesting product. We’ve shared it with sever several of our older clients who some of them, like I said, want to preserve their nest egg and they’re like, you know what, I don’t want to touch that. (09:23) I want to leave that for my children. I’ll just use the house equity and then they can kind of enjoy life and not be so stressed. So, it’s kind of a win-win. So, if this is something you’re interested in, um, give us a call. We can refer you. We don’t refer you. Obviously, we’re not lenders. No, you know, we don’t do it. (09:41) We can certainly hook you up. We do not do lending. We can hook you up with someone who can help you. Uh, another thing to consider too is if you kind of have that same that the flexibility that we’re talking about, you may want to buy a nicer home. You know, you don’t need to buy so smart or or so frugally. (10:03) You might want to buy a home that’s worth a little more and have you enjoy your your twilight years a little more, right? and and splurge a bit more knowing that you don’t have to maintain that that mortgage if you don’t if you don’t if you can’t or you decide you don’t want to. Yeah. So, that is our tip of the day for the new lifestyle home loans or as we like to call it a flex loan. Flex loan. (10:27) You should know things are changing for the better and better products are coming out there that can help people who are a little bit older and maybe want to enjoy life a little more and not feel that that heaviness of a monthly mortgage now that they’re retired. So, something to think about. Yeah, absolutely. (10:46) So, if you have any questions about that, um we could certainly, you know, be happy to share our referrals and you could see if it might work for you. Yeah, absolutely. All right, my friends, that is all for today. Hey, we hope you found this helpful and we hope to hear from you soon and uh make sure you come visit us. Love to see you. Bye bye.
Ever see a neighbor’s house selling for a great price and wonder if you could get a similar amount? Join us this week to find out what factors have the biggest impact on your home’s value, and enable you to get top dollar.
hello hello hello H peeps this is Diane and Randle bro your friendly realtor team H with the pick lady team she’s presca pick lady that’s right I’m here in Prescot Arizona coming to you live and today we’re going to talk about estimating value estimating value of the home yep estimating the value of a home is one of those things that everyone thinks they know how to do right it seems really simple and they just jump into it it’s a lot more complicated get it than you would think mhm you can’t just go by oh well my neighbor sold their house for a million (00:35) so I’m going to get a million not necessarily so necessarily uh depending on is your neighbor on your side of the street does your neighbor have the same view you have yes does your neighbor have a house that’s been recently updated it does your neighbor have a nice flat yard there’s a lot of you can’t compare two houses next door to each other it might be apples to oranges so it’s very important when you comper property to do apples to apples that’s right M and one of the big things people forget square footage yes huge oh yeah that that one sold for a million and a (01:11) half yeah it’s twice the size of your house yes so you your house is 2,000 square feet you can’t command a million and a half when the other one was 4,000 square feet now some of the automated estimating tools like Zillow there there are a whole bunch of them there’s one that we use that is um uh only only Realtors are allowed to use it um they can do a pretty good job of at least giving you a range make sure you’re in the right ballpark uh but particularly in Prescot it is really hard to comp houses that you could have one house and right next door it is a house that’s (01:49) got a much better view because it’s a little higher uh it it’s you really have to know the neighborhoods you really have to know the homes you really have to be very clever about picking comps M and you certainly have to adjust for the square footage you have to adjust for how how recently the home has been uh remodeled or updated um there’s there’s a lot to it and uh just understand that um and understand that real estate agents do this all the time it’s it’s it’s really a science it’s not as easy as it appears even the automated system gives you just a (02:30) R they’ll give you a range the good ones will give you a range if it doesn’t give you a range it’s not a good system that’s right so you know the standard realtor gives you a range uh we take the range but then we hone it in yes so you need to have a really good Agent who’s very familiar with all of the neighborhoods and the areas and who can even project out like they may use a comp that’s five years old but you need an agent who can take that comp and price it out as to what it would go in today’s today’s terms and so as a lay person this can get a little overwhelming (03:07) and confusing and uh some people will use uh a a a a comp from a totally different neighborhood or different subdivision or even we had we had a professional appraiser come up from Phoenix yes this is the bane of our existence right true so particularly during covid it was hard to get estimates done or appraisals done and uh so they would call a appraisers from Phoenix and these guys do not know these neighborhoods they do not know these subdivisions so he used comps from a subdivision which is really an entry level subdivision to price luxury homes that were (03:47) in the subdivision next to it and he was off by $200,000 $100,000 I’m like yeah I mean no sir in his defense it was within a quarter mile yes but you have to know the neighborhoods it’s not just math it’s not just arithmetic it’s it’s science yeah it is it’s not just oh the price per square and you multiply it’s it’s more more to it than that there’s a lot more to it you have to look at views uh some homes on one side of the street have no views the homes across the street may have amazing views guess what the ones across the street are going to have a higher price yes if (04:22) you’re on the other side and you’re like well they got a million and a half why can’t I because you don’t have a million dollar view so so you can’t use that as an accurate comp yes and it could also be that house has been completely redone from just from the studs all the way up to the roof yeah and the H your house has is severely dated and needs to be you know uh updated and stuff yeah you can’t compare those two it’s not a good comp so you really need to make sure you get a good professional who understands the neighborhoods the homes the prices of the homes and and and (05:00) can adjust accordingly not just based on one of those easy programs that gives you a range and a lot of times people lie with Statistics I think there are books how to lie with Statistics so sellers will pick you know comps that show really high price per square foot well like a home that’s small you know like let’s say 1,600 square fet that home is going to be very high per square foot the more the higher the square foot footage the less it’s going to be per square foot and it’s just because you’re amortizing the the lot over the size of the home uh so smaller homes (05:40) will always have higher price per square foot so you have to adjust for that so all of that it’s a science my friend and people PE sellers will will pick comps to make their homes uh seem worth more than they are agent some agents will do that uh buyers will do the same thing making the house seem really really cheap when we estimate the value of a home we do it unbiased we do it as unbiased as we can be these this is what the numbers are saying with our sellers we’ll say if you want more than that there are things we can do to try to get more than it’s worth but the comps (06:18) are telling me this you know numbers don’t lie friends and we’ve had we’ve had sellers we had a a very good friend of ours we sold their house and uh we asked him how much do you do you think your home is worth He said I’d be happy to get $850,000 we said we’re going to sell you home for a million because it’s worth more it’s worth so after we did the comp so don’t don’t try to do this on on your own yeah we don’t try to get sellers to to lower their price uh by using statistics against them (06:49) and we don’t we don’t try to get buyers to pay more than it’s worth by using statistics we we try to price it we do it unbiased unbiased right where it should be we don’t overprice we don’t price sell it fair and chances are it’ll conclude fairly quickly for you so anyway keep that in mind uh for some of you who were thinking um I think I’ll just do this myself or I’ll figure this out there’s a lot to this a lot more than you would ever imagine and the stakes are high yes you know the the medium price uh of a home in the city of Prescot at this point is $650,000 you know you (07:27) want that priced well you want it pric right this is very important uh this is a big part of your assets and so you want to make sure you don’t undersell and you want to make sure you don’t overprice it and it gets stale and you just lose time on Market yeah so it’s very important uh to have a professional help you and guide you every step of the way and give you the right price yeah so that is it for estimating value uh if you would like us to come and estimate your value glad to do it for you feel free to give us a call have any number of things on our website you can (08:01) request it or just give us a call yes happy to help you yeah absolutely take care bye bye”
When people start to get serious about finding a new home, generally the first place they look is online. This section offers links to customized home searches and tricks and tips to be more successful in finding what you want.