Pay off the mortgage before retirement?

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

Question posed by a homeowner nearing retirement: 

Should we pay off our mortgage early if we can afford it?

The answer, from NJMoneyHelp.com is not simple. There are some pros and several cons about it.

Q. I am 60 and my wife 56. We plan to move in four or five years. At that time, I will retire and our adjusted gross income will drop by 60 percent. We plan to buy a home without a mortgage. We currently earn $200,000, and our 15-year mortgage is about $250,000 with a 2.99 percent rate. We paid $7,000 in interest last year. The mortgage would be paid off in 2030. Based on an accelerated payment of $1,000 per month, we’d have the mortgage paid off in 2025 with an interest savings of $30,000. In all, we’d pay $60000 more to save $30,000 in interest. Is it worth it? — Almost retired

A. Paying off a mortgage isn’t always a slam dunk.

It might seem to provide peace of mind and be a no-brainer if you can afford it, but there’s more to consider, said Ken Van Leeuwen, a certified financial planner with Van Leeuwen & Company in Princeton.

Pre-paying the mortgage would eliminate five years of tax deductions of mortgage interest, he said.

The tax deductions could be helpful for offsetting some income tax burden if you take money from your 401(k) and other qualified retirement accounts when you retire.

You should also consider any additional debt that you are currently carrying.

“With an interest rate of 2.99 percent, you may want to consider paying down other debts that have less favorable rates such as credit cards,” he said.

And as you get closer to retirement, if you aren’t already, you should consider maxing out your retirement accounts to take full advantage of any employer matching contributions and additional tax deductions, he said.

In looking at the purchase of your new home, for some clients, Van Leeuwen said, he has recommended taking a partial mortgage because it presents some advantages.

“Assuming you can afford the mortgage payments out of retirement cash flow, taking a partial mortgage allows you to fund the purchase of your home at a relatively low interest rate,” he said. “In doing so, you free up additional capital which can be used in a more beneficial way.”

He said putting a large amount of capital into a new home, potentially limits opportunities for future growth because you are tying up a large portion of funds into a “non-working asset.”

“Instead of using the sales proceeds from your current home to fund the purchase of your new home, consider investing these funds,” he said. “While it is certainly not guaranteed, we have seen that historically, over long periods time investments in a diversified portfolio can provide growth that outpaces mortgage interest while still allowing you to deduct your mortgage interest.”

Email your questions to Ask@NJMoneyHelp.com.

This story was originally published on Sept. 18, 2019.

We can't advise you on matters such as tax planning for retirement, but we sure can give advice when it comes to your home purchase and mortgage refinance.  Give us a call! 

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Why do you need title insurance? A video for homebuyers

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

Homebuyers need title insurance

Here's why

A short video courtesy of the American Land Title Association of which Vested Land Services LLC is a proud member.

So there you have it.  Do not buy a home without title insurance.  It's a one-time purchase of a product that lasts for as long as you own your home.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Restrictive covenants are enforceable

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

Restrictive covenants and your title insurance policy.

A recent case in US District Court of New Jersey was all about a restrictive covenant that prohibited certain types of use of the property.

Now, restrictive covenants come in all shapes and sizes.  A covenant may prohibit using a parcel of property to raise pigs, or sell liquor, or manufacture vitriol (we now call it sulfuric acid.)  More heinous restrictive covenants forbade the sale of the land to Italians, Jews and African-Americans.  Those are now deemed unenforceable by the courts, but they are still in the land records.

Now comes, Cherry Hill Towne Ctr. Partners, LLC v. GS Park Racing, L.P., D.N.J. (Bumb, U.S.D.J.) (20 pp.) 

Plaintiff filed an action seeking a declaration that a restrictive covenant encumbering plaintiff's property was unenforceable; in response, defendant moved for a preliminary injunction to enjoin plaintiff from opening a sports wagering business on its property. 

Following the legalization of sports wagering in New Jersey, plaintiff sought to apply for a sports wagering license. However, plaintiff's property was subject to a restrictive covenant in favor of defendant that prohibited wagering activities, gambling, and gaming of any sort on the property by any party other than defendant and its successors and assigns. 

When defendant notified plaintiff of the restrictive covenant, plaintiff responded by filing the present action; defendant then filed its cross-motion for preliminary injunction. 

The court first ruled that the case was ripe for review despite plaintiff having not yet applied for a sports wagering license, since plaintiff asserted that a declaratory judgment would aid it in deciding whether to undertake the time and expense of an application, thereby giving a judgment practical utility. 

The court denied defendant's motion for a preliminary injunction. The court first ruled that defendant had demonstrated a likelihood of success on the merits. The court ruled that defendant would likely prevail on its argument that the restrictive covenant on plaintiff's property was enforceable, finding the language of the covenant unambiguous and supported by consideration. 

The court further ruled that the covenant was reasonably restrictive in its scope and did not impose an unreasonable restraint on trade. However, the court ruled that defendant was not entitled to injunctive relief because it had not demonstrated that it would suffer from immediate irreparable harm in the absence of a preliminary injunction, since plaintiff conceded that it would not be opening a sports wagering facility on the property anytime in the immediate future. [Filed Sept. 4, 2019]

Here we are.  An ancient method of privately regulating one's use of his property is still valid!  What does it mean for you?

When you buy property, your attorney will order a title commitment. The title agent will then search the title to determine if there are any liens or encumbrances affecting the title or the proposed use.  That's what we do!  

If a restrctive covenant is found, your attorney will advise you whether it is enforceable or if affects your use of the property in any other way.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Homebuyers can cut closing costs

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

How Homebuyers Can Cut Closing Costs

Per MSN Money - 

You hear a lot about the down payment required to buy a home, but closing costs are also a significant consideration. You can’t eliminate all or even most of these costs, but there are steps you can take to reduce them.

There are some closing costs that can be negotiated and others that can't.  For instance, fees for title insurance in New Jersey are heavily regulated.  But you'll still find bad apples in the barrel (one of which is now involved in a massive class action) who overcharge.

So, the lesson to be learned is to ask what things cost!

Read the full article.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Home buyer gets back his deposit

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

What's a home buyer to do when the real estate purchase contract says one thing and the seller says it doesn't?

Some contracts for the purchase of real estate allow the buyer to cancel the purchase due to various contingencies.  The best known is the "mortgage contingency" where, if you don't get a mortgage within a certain  time frame, you, and sometimes the seller, can cancel the contract.

A recent court case involved a more difficult contingency - one where the buyer can cancel if she doesn't sell her present home.

For many attorneys representing sellers, this is a no-no.  But not in RIVERMOUNT DEVELOPMENT LLC VS. LIVINGSTON, et al, where the contract contained such a clause. When the buyer acted upon it, the proverbial stuff hit the fan.

In the end, the buyer won, but I can't imagine the costs to the buyer and its attorney financially and emotionally.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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