Legal Question in Real Estate Law in New Jersey
Real estate lien or 2nd mortgage
My wife has just built a new home in New Jersey and during construction she came across many problems that threw her budget way out of whack. Rather then changing her mortgage or going to get additional mortgages she borrowed money from our children's bank accounts ($240,000). The house is now completed and my wife can not afford to pay off the borrowed money due to some issues with a large insurance claim which will be settled some time in the distant future. I don't have a problem using my children's money for this house because down the road this house will be theirs any way. I would like to protect them against anything happening (selling, divorce) from now until then and I was hoping you may have a solution. Someone told me to put a 2nd mortgage on the house in my kids name and others said I should put a lien on it in their names. I don't know what to do and I am looking for a little guidance. The house is currently worth approx. $450,000, she has a 1st mortgage of $140,000 there is plenty of value in the house and my children are only 3 and less then 1 years of age. What should I do and how can I protect my children�s money.
2 Answers from Attorneys
Re: Real estate lien or 2nd mortgage
You have answered your own question. A mortgage is a lien on real estate. You should obtain a lawyer to secure the children's interest in the premises by placing a mortgage lien upon the property. You must keep in mind that this advice is based purely on the little bit of information that you have given to me. There certainly could be factors that would change my opinion. Further, no one can rely on advice from an attorney who has not been retained. If you have not retained an attorney, before you take any action, you should contact an attorney (either me or someone else) to discuss your matter in more detail. Only then will you be able to rely on the advice. I will be happy to assist you. However, you need to call me at 856-546-8010. If you mention Law Guru, there will be no charge for your first consultation. Good luck! Rob Gleaner
Re: Real estate lien or 2nd mortgage
The answer could be as simple as a mortgage. However, your question suggests other factors may be involved. Marital and financial stability considerations also play a significant role in determining whether a mortgage would adequately protect the childrens' interests. $240,000 is a lot of money for such young children to have had. It also suggests that money came to them probably in a special way or for a special purpose(s) You should really call for a consultation to determine all the relevant facts. Call me at 973-731-5110
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