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Reverse Mortgage
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Reverse Mortgage
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Reverse Mortgage

  BCB Community Bank Reverse Mortgage:
   
  Understanding Reverse Mortgages
  A reverse mortgage is a financial tool that allows you to turn a portion of the
equity in your home into cash without making monthly mortgage payments.
Unlike traditional home equity loans, with a reverse mortgage you receive the
money you need and make no mortgage payments until the home is no longer
the primary residence.
   
  Retaining Ownership
  The bank will NOT own your home when you obtain a reverse mortgage. You
continue to own and live in your home until you sell it, all borrowers pass away,
or the home is no longer your primary residence.
   
  Responsibilities
  There are no monthly mortgage repayment obligations with a reverse mortgage.
The loan, and interest added to the balance of your loan is repaid when the home
is sold or when the last borrower is no longer living in the home. As with all
mortgages, you are responsible for maintaining property charges including taxes
and insurance, maintenance of the property and dues on condominiums which
can be paid using the proceeds from the reverse mortgage. In addition, your
home must be your primary residence and meet US Department of Housing and
Urban Development (HUD), minimum property standards.
   
  Options
  There are several FHA-insured reverse mortgage products with variable- or fixed-rate options that abide by the Federal Housing Administration (FHA) guidelines. The right reverse mortgage allows you to use the proceeds in a way you choose: whether for monthly living expenses, supplemental income, medical expenses and prescriptions, unexpected bills, home improvements or a combination of uses.
   
  Reverse Mortgage
   

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Reverse Mortgage
 
Common Questions and Their Answers
 
1. How much money can I receive?
Several different factors determine how much money you can get. Your age, home value, interest rates and sometimes lending limits will determine the amount of funds you'll receive from your reverse mortgage.
 
2. How do I access my funds?
You choose the way you receive the funds, either as a lump sum, line of credit, monthly distribution, or a combination of these methods.
 
3. What are the interest & fees charged?
Interest on a reverse mortgage is only charged on proceeds you receive and can be variable or fixed depending on the product chosen. Like with standard mortgages, reverse mortgages are often subject to appraisal fees, closing costs and mortgage insurance premiums.
 
4. Does my home qualify?
Many types of properties qualify for reverse mortgages including: single-family homes, 2-4 unit properties, certain manufactured homes, condos and townhomes.
 
5. When is loan repayment due?
Loan repayment is required when any of the below maturity events occur:

• The property is sold
• Property taxes and/or insurance are not maintained
• The property is not properly maintained and reaches disrepair
• The borrowers no longer live in the home as primary residence
• All borrowers pass away

 
6. What if I have an existing mortgage?
Existing mortgages must be paid off which could be done with the funds from a reverse mortgage, savings or support from family and friends.
 
7. What will happen to my Social Security or Medicare?
Regular government benefits like Social Security and Medicare are not affected by a reverse mortgage. However, Supplemental Security Income and Medicaid could be affected depending on the amount of money you receive and when you use it. Be sure to speak to Social Security, Medicaid and Financial experts about your specific situation.
 
8. How is a reverse mortgage different from an equity loan?
Traditional equity loans require income qualifications and monthly payments to principal and interest. A reverse mortgage is different because there are no income qualifications and you receive funds to do as you please with no monthly principal and interest payment requirements.
 
9. How can I use the funds?
There are several common uses of a reverse mortgage including paying for monthly living and medical expenses, supplementing income, improving quality of life, standby line of credit or planning for the unexpected. You choose how you use your reverse mortgage funds.
 
10. How does a reverse mortgage affect my heirs?
No debt is passed along to the estate or heirs. When the loan reaches maturity because the home is sold, or is no longer used as a primary residence, the cash, interest, and other fees must be repaid. Any proceeds beyond the amount owed belong to your spouse or estate which means any remaining equity can be transferred to heirs.
 

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Reverse Mortgage
 
Obtaining a Reverse Mortgage Checklist
 
1. Call BCB Community Bank and speak with a reverse mortgage consultant
There is no pressure or obligation to start this first step; it's an opportunity to have your questions answered by a knowledgeable and friendly reverse mortgage consultant.
 
2. Find independent reverse mortgage counselor
This service is required by the government to make sure you've had all your questions answered by an independent party/counselor. All counselors must be on the approved list by the U.S. Department of Housing and Urban Development (HUD). These counselors are NOT employed by BCB Community Bank and any associate of BCB Community Bank cannot provide guidance on the selection or scheduling of counseling appointments. BCB can provide you with a list of approved counselors in your area.
 
3. Fill out an application
You will need to have completed step #2 and provide BCB Community Bank with your counseling certificate. You will need to provide several key documents including proof of age, Social Security number, photo ID and other financial information. Speak with your reverse mortgage consultant at BCB Community Bank to learn more about the documents that may be required.
 
4. Have your home appraised
Your Home's value needs to be determined and this is a standard procedure for both traditional mortgages and reverse mortgages. A home inspection is usually required as well.
 
5. Complete your closing
Final paperwork is signed and you received the loan funds.
 
Reverse Mortgage
A Reverse Mortgage for Home Purchase
 
Many seniors, desire to relocate to be near family members, downsize their current home, or require a home or community that meets their physical needs as they age. The Home Equity Conversion Mortgage (HECM) for Purchase is a Federal Housing Administration (FHA) insured home loan that allows seniors age 62 or older to use the funds from a reverse mortgage to purchase a new principal residence.
 
Responsibilities
As with traditional reverse mortgages, there are no monthly mortgage repayment obligations with a HECM reverse mortgage for purchase. The loan and interest is repaid when the home is sold or when the last borrower passes away or leaves the home. Borrowers are responsible for maintaining property charges including taxes and insurance, maintenance of the property and dues on condominiums which can be paid using the proceeds from the reverse mortgage. In addition, the purchased home must be the primary residence and meet US Department of Housing and Urban Development (HUD), minimum property standards.
 
Eligibility for HECM for Purchase
The requirements borrowers must meet for a HECM for Purchase is similar to those of standard reverse mortgages. In order to become eligible for HECM for purchase:
  • All borrowers must be age 62 or Older
  • Borrowers must live in the purchased home as primary residence
  • Purchased home must meet (HUD) property standards
  • Borrowers must meet with HUD approved counselor
  • The difference between the purchase price of new property and loan proceeds, if any, must be paid
 
 
Eligibility & Qualifications
 
Age:
All borrowers must be 62 years of age or older to be eligible for a reverse mortgage.
 
Equity:
You must own your home or have enough equity that the funds from the reverse mortgage can pay off any existing mortgages.
 
Residence:
You must live and remain in your home as the primary residence for the life of the reverse mortgage.
 
Property:
The property must meet HUD property standards and be maintained throughout the life of the reverse mortgage.
 
3rd Party Discussion:
You must meet HUD property standards and then meet with a HUD approved counselor to discuss your options and the process.
 
Reverse Mortgage

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Reverse Mortgage
 
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