Senior Solutions Reverse Mortgage Workshops, Foreclosure Prevention

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  Calendar At A Glance
JCC Senior Solutions Workshop, Edison, N.J
Lakeland Bank offers Senior Outreach Program, Wycoff, N.J
Lakeland Bank offers Senior Outreach Program, Teaneck, N.J
The Central Morris AARP, Morris Plains, N.J
Essex County Bar Foundation, Learn & Earn with Reverse Mortgages, Roseland, NJ
11:30 AM
Senior Solutions Workshop Luncheon, Lakeland Bank, Sparta, NJ
12 Noon
Senior Solutions Workshop Luncheon, Lakeland Bank, Teaneck, NJ
12 Noon
Bergen County Bar Association Learn & Earn with Reverse Mortgages, Hackensack, NJ
12 Noon
  Information kits and individual consultations: call 908-217-2240 or visit any Lakeland Bank* Branch and ask for a Reverse Mortgage Kit
Lakeland Bank* Branch Locator
  *Senior Solutions Workshop of Intercounty Mortgage Inc. is not affiliated with Lakeland Bank. Intercounty Mortgage Inc. is a licensed mortgage banker with the NJ Dept. of Banking,

Frequently Asked Questions



What is a reverse mortgage?

It is a government insured loan against your home that requires no repayment for as long as you live there.  The loan can be taken all at once, but can also be taken, as you need it.  The reverse mortgage is aptly named because the payment stream is “reversed”.  Instead of making monthly payments to a lender as you would with a traditional mortgage or home equity loan, the lender makes payments to YOU.

Why is the reverse mortgage also sometimes referred to as a HECM?

HECM stands for Home Equity Conversion Mortgage.  It is a special type of mortgage program available to homeowners who want to utilize the equity in their homes without the need for repayment of the loan for as long as they continue to occupy the home as a primary residence.

Do I still own my home with a reverse mortgage?

YES!  While the reverse mortgage loan is outstanding, you continue to own the home and hold title to it.

Who is eligible for a HECM?

The following are the requirements for the HECM:
  1. The homeowners must own their home and be at least 62 years old;
  2. There are NO credit/income requirements.
  3. The home must be the “principal residence” which means that the homeowner lives in the home more than half of the year;
  4. The home must be a single family home, a 2-4 unit building or a federally approved condominium or planned unit development; and
  5. If there is debt against the home, then the homeowner must use the reverse mortgage to pay it off.

Can I get a reverse mortgage if I’m in financial trouble?

Yes.  A reverse mortgage can be used to pay off mortgages and prevent a foreclosure, pay delinquent taxes and any other debts you decide to pay off with the proceeds from the loan.  Ideally, a reverse mortgage should provide enough cash flow so that you will stay out of financial trouble in the future.
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How do reverse mortgages differ from regular mortgage or home equity loans?

  • With a traditional mortgage or a home equity loan you will be required to prove that you have sufficient income and credit history to qualify, and you will begin repaying the loan within 30 days of closing.
  • With a reverse mortgage, there are no monthly payments to be made at any time during the loan for as long as you continue to occupy the home as a primary residence.  Since there is no monthly payment, the FHA does not require verification of your income and does not require a good credit rating.

What are the benefits of a reverse mortgage over a regular mortgage?

  • No credit or income requirements.
  • No monthly repayments of any kind for as long as you live in your home;
       A guaranteed monthly stream of income or credit line to use whenever you need it.

Can I use a reverse mortgage to Purchase a home?

Yes!  As of January 1, 2009, the reverse mortgage can be used to finance the  purchase of a home.  There are no credit or income requirements to qualify, and it can make  a home purchase possible for a senior that otherwise would not qualify for traditional financing. The senior will not be required to make a monthly mortgage payment for as long as they live in the home.  Down payment requirements vary based on the age of the youngest borrower, the expected interest rate, and the value of the home.

Will I have to pay any fees to obtain a HECM?

Yes.  The out-of-pocket cash cost to you is most often limited to the cost of the property appraisal which determines the value of your home, as well as the cost of a reverse mortgage counseling session with a HUD approved counselor. The other costs may be included in your loan balance so that you do not have to pay them in cash.  You will pay an origination fee, ordinary closing costs and an FHA mortgage insurance premium of 2% up-front and a ½% annual FHA renewal premium on the outstanding balance of the loan.

Will the money I receive affect my Social Security or other benefits?

The monies received are not considered income, but rather, they are loan advances.  It will not affect eligibility for retirement, survivor, disability or Medicare benefits payable under the Social Security Act.  However, eligibility for need-based programs, such as Supplemental Security Income (SSI) could be affected if advances are not spent in the month received.
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Are there any restrictions on the use of the money I will receive?  For example: Can I just buy a new car or take a trip each year to visit my grandchildren?

The money from a reverse mortgage can be used for ANYTHING!  We do not ask any questions regarding the use of your funds.  This is YOUR equity.  It is your money to spend as you wish.

Will I have to sell or vacate my home if the money I owe on the loan exceeds the value  of my home?

Absolutely not!  As long as you continue to live in your home as your primary residence, you will never be asked to sell or move out of your home.  The FHA insurance you acquire in connection with the mortgage covers any potential financial obligation to your lender.

Are there any other special requirements?

Yes.  You must agree to participate in a mortgage counseling session with a Department of Housing and Urban Development (HUD) approved counseling agency.  This government counseling service is meant to assist you in understanding the HECM loan program so that you can be comfortable in knowing whether or not a HECM is right for you.  This counseling can be done over the phone, and friends and/or family members are also encouraged to listen in on the counseling session with you.

How much can I borrow?

The maximum amount that can be borrowed is based on a HUD formula that factors in the age of the youngest borrower, the average expected interest rate, and the current value of your home.  The amount may be limited by mortgage insurance limits for the area where your home is located as established by the Federal Housing Authority (FHA). Loan amounts on a reverse mortgage are anywhere between 50-85% of the value of the home.  The loan amount can be taken in whatever increments that the borrower chooses.

What types of payment plans are available with a HECM?

You can choose a combination of these payment plans:
  1. TENURE:  You receive equal monthly payments for as long as you occupy your home as your principal residence. 
  2. LINE of CREDIT:  You have a maximum amount of cash available to draw upon at any time and in the amounts of your choosing.
  3. TERM:  You receive equal monthly payments for the fixed period of time that you select.
  4. Lump Sum:  You can take all or part of the principle loan limit as a lump sum payment at closing.
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May I switch payment plans in the future?

Yes, for a nominal fee, you may switch payment plans at any time.

Can we pay part or all of the loan balance?

You or you heirs may repay the loan in part or in full any time at any time without penalties.  Upon inheritance of the property, your heirs may choose to refinance and keep the property. They may also elect to sell the property at fair market value and satisfy the loan balance at closing.

Will my heirs owe anything to the mortgage lender after I’m gone?

If the principle balance of the loan amount is greater than the home’s value, any outstanding debt balance will be forgiven.  The FHA insures that you or your heirs will never be left a debt.

If my home’s value appreciates during the mortgage term then who will be entitled to  that money?

Under the terms of a HECM, you are only required to pay back the outstanding balance of your loan. You or your heirs are entitled to any and all appreciation in the value of your home that exceeds the loan balance.

What if I decide to sell my home?

If you choose to sell your home, the outstanding loan balance will have to be satisfied at closing as with any mortgage lien.  You will receive any proceeds from the sale that exceeds the loan balance.
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Why should I go to Lakeland Bank to learn more about reverse mortgages? Will they help me decide if a reverse mortgage is right for me?

Lakeland Bank has developed the Senior Solutions Workshop™ series in conjunction with Intercounty Mortgage government loan specialists, financial consultants, and Elder law attorneys in order to provide solutions that help ensure their clients’ golden years are truly golden. “We are helping our clients make smart choices so they remain financially healthy, productive, and secure. This is becoming increasingly important as 78 million baby boomers are beginning to enter their 60’s.” said Thomas Shara, president and CEO of Lakeland.

Are there other financing options that I should consider?

Reverse mortgages may not be the best choice in some situations, such as in a short term financial need.  In fact, many clients who inquire about a reverse mortgage discover a better solution from a traditional mortgage product or equity line of credit. “When we meet with seniors and family members, we present a comparison of all the financing options available, and that discussion is critical in helping a senior decide which loan product is best for them” said Sandra Rostek, vice president, reverse mortgage division, Intercounty Mortgage. We also explain that the best use of a reverse mortgage is so people can stay in the home for the rest of their lives, and the loan often times makes the difference between having to move or stay.

Should I consult with my attorney?

Yes.  If you have your own attorney, we will be happy to supply the information they will need to advise you in the decision making process.  If you do not have your own attorney, a local Elder law attorney is available as part of the consultation process. An attorney can help guide clients through the process and oversee reverse mortgage closings. An attorney experienced in Elder Law provides valuable insight to seniors in order to make the best decision.
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