In Bergen County, Ridgefield is known for having varying property tax burdens even within the same city, with some neighborhoods feeling the impact of taxes more than others. As more families approach retirement, they often feel the weight of property tax bills for homes they've lived in for a long time. Many find it challenging to manage property taxes and living expenses solely on retirement income, yet they don't want to leave their beloved homes. This leads some to explore reverse mortgages as a way to access cash from their accumulated equity without selling their homes.

A reverse mortgage is a loan product for homeowners aged 62 and older that allows them to borrow against the equity in their homes. Unlike a traditional mortgage, where borrowers make monthly payments, a reverse mortgage allows homeowners to receive funds in a lump sum, monthly payments, or a line of credit, with repayment due when the home is sold, the owner passes away, or the home is no longer the primary residence. The most commonly used product is the Home Equity Conversion Mortgage (HECM), which is the only type of reverse mortgage insured by the federal government through the Federal Housing Administration (FHA). To qualify, applicants must be at least 62 years old, the home must be their primary residence, any existing mortgage balance must be manageable with the reverse mortgage funds, and they must pass a financial assessment to ensure they can continue to pay property taxes and insurance (according to hud.gov).

In Ridgefield, the Zillow estimated home value is around $572,468, which has increased by 9.5% over the past year (as of 2025, Zillow). With this level of equity, the amount accessible through a reverse mortgage can be significant, but the actual amount received can vary based on the age of the younger applicant and current interest rates, meaning results can differ from household to household even within the same neighborhood. It's also important to note that even if homeowners receive a lump sum or monthly cash flow from a reverse mortgage, they are still responsible for paying property taxes and homeowners insurance. The effective property tax rate in Bergen County averages around 2.73% (according to Ownwell), which is higher than the New Jersey state average of 2.23%, so families wishing to remain in Ridgefield should carefully consider this aspect.

Initial costs should not be overlooked. The origination fee, mortgage insurance premium (MIP), and closing costs can make the upfront costs higher than those of a traditional mortgage (according to consumerfinance.gov), with MIP typically around 2% initially and an additional annual fee of about 0.5%. As the loan balance increases over time, the equity left in the home decreases, which could reduce the assets available to pass on to children or heirs. Most importantly, if property taxes, insurance, or maintenance costs are not paid, it could lead to default and the risk of losing the home.

However, there are advantages as well. Homeowners can secure cash flow for living expenses or medical costs without the burden of monthly principal and interest payments, and HECM loans are structured as non-recourse loans, meaning that if the home value falls below the loan balance, heirs are not required to pay the difference thanks to FHA insurance. It is crucial to weigh these benefits against the costs and risks mentioned earlier before making a decision.

In New Jersey, the population aged 65 and older makes up about 18% of the total, which has increased by 33% since 2010 (as of 2024, USAFacts). This suggests that more families in Bergen County, including Ridgefield, will likely face similar concerns. Before applying for a HECM, applicants are required to undergo counseling with a HUD-approved counselor, which should be seen as an opportunity to assess whether this option truly fits their situation rather than just a formality. There have been reports of scams targeting seniors related to reverse mortgages, so it is wise to take the time for thorough consultations and discussions with family before making a decision. This article does not constitute investment or legal advice, and it is recommended to consult with a professional before proceeding with any contracts.