If you or a loved one are 62 or older and have considerable home equity, it may be wise to consider a reverse mortgage. A reverse mortgage is a loan, but it is not the same as the type of mortgage you get when you are buying a house — that’s called a forward mortgage. Unlike a forward mortgage, reverse mortgages don’t require you to make any loan payments until one of two things happens: you die or you decide to move away and sell your home. At that time, the money from the sale of your home is used to pay back the loan.
Take control of your financial future and explore the benefits of a reverse mortgage today. At The Matus Law Group, our New Jersey real estate lawyers are here to guide you through the reverse mortgage process and provide advice tailored to your unique situation. Don’t miss out on the potential financial stability and peace of mind that a reverse mortgage can offer. Call us today at (732) 281-0060 to schedule a consultation and take the first step toward securing your retirement.
Are Reverse Mortgages Legal in NJ?
Reverse mortgages are legally permitted in New Jersey. These financial tools enable homeowners to convert part of their home equity into cash without the need to sell their home or make monthly mortgage payments. Instead, the loan is repaid when the homeowner sells the home, permanently relocates, or passes away.
In New Jersey, specific regulations ensure that reverse mortgages are used responsibly and protect the interests of older homeowners. One of these regulations is the age requirement: borrowers must be at least 62 years old to be eligible for a reverse mortgage. This age limit is in place to ensure that these financial products are used primarily by older adults who may benefit from accessing their home equity to cover living expenses, healthcare costs, or other needs.
Additionally, New Jersey law mandates that potential borrowers receive counseling from a HUD-approved agency before finalizing a reverse mortgage. This counseling helps homeowners understand the implications of the loan, including how it might affect their estate, eligibility for government programs, and long-term financial planning.
While reverse mortgages can be a valuable tool for many New Jersey residents, it is crucial for potential borrowers to fully understand the terms and conditions. Consulting with a New Jersey real estate lawyer can provide clear insights and assist homeowners in making well-informed decisions.
How Will I Receive Funds With a Reverse Mortgage?
There are some options! You may be able to receive the funds:
- As a lump sum
- In fixed monthly payments
- As a line of credit.
What Happens If the Amount I Borrow Becomes Greater Than the Value of My House?
The federal government strictly regulates the way reverse mortgages are structured to prevent this from happening. However, it can still sometimes happen if your house decreases significantly in value or if you are receiving monthly payments and you live longer than your lender thought possible. If this happens, you (or your estate) will not be responsible for paying any amount beyond the value of the home.
What Are the Downsides of a Reverse Mortgage?
There are certainly some things to look out for and consider when it comes to reverse mortgages:
- If someone, like a friend or family member, lives with you, they will have to move after you pass away because the home will have to be sold.
- Some people prefer to save their equity.
- You will have to sell your home if you need to move into a nursing home or other type of assisted living facility for more than a year.
- There are many scams targeting seniors using reverse mortgages.
Can You Refinance a Reverse Mortgage?
In New Jersey, it is indeed possible to refinance a reverse mortgage. Refinancing a reverse mortgage involves replacing your current reverse mortgage with a new one that may offer improved terms, lower interest rates, or increased benefits.
Refinancing a reverse mortgage in New Jersey can also be considered under the following circumstances:
- If interest rates have dropped significantly, it could enable you to access more equity from your home since the cost of borrowing money has become more affordable.
- If you wish to add your spouse to the loan.
- If you are older and meet the necessary criteria, you may be eligible to borrow a higher percentage of your home’s value, which can provide you with more financial flexibility.
- If the value of your home has risen, it means that you now have additional equity available, which can be beneficial if you’re looking to leverage that equity for various purposes. It may provide you with additional borrowing capacity or access to more favorable terms.
To explore the possibility of refinancing your reverse mortgage in New Jersey, it is recommended that you reach out to a New Jersey real estate lawyer. The Matus Law Group can provide you with the necessary information, guide you through the process, and help determine if refinancing is a suitable option based on your individual circumstances. Don’t hesitate to reach out and schedule a consultation with us today.
| Considerations When Refinancing a Reverse Mortgage in New Jersey | Description |
|---|---|
| Drop in Interest Rates | Refinancing can provide access to more equity due to lower borrowing costs. |
| Adding Spouse to the Loan | You can refinance to include your spouse as a borrower. |
| Eligibility for Higher Percentage of Home’s Value | Older individuals meeting the criteria may borrow a higher percentage of their home’s value. |
| Increase in Home Value | Rising home value offers additional equity, enabling more borrowing capacity and favorable terms. |
Who Can Help Me Decide If a Reverse Mortgage Is Right for Me?
If you’re considering a reverse mortgage, it’s a great idea to partner with an attorney who has a strong background in both real estate and estate planning. The Matus Law Firm is here to help. Contact us and give us a call at (732) 785-4453, and we’ll schedule a time to discuss your options. We can’t wait to hear from you!
