07 Apr How should I use my ANCHOR property tax rebate?

Q. When I get my ANCHOR rebate, given that it’s coming as a check and not as a credit to my property tax bill like the Homestead Rebate was, how should I use it? Can I ask my mortgage company to apply the money to the escrow payment? Should the money be used to reduce the mortgage balance? Will towns accept it to reduce the property tax bill for the current or future years? Any other suggestions?
— Homeowner

A. ANCHOR stands for Affordable New Jersey Communities for Homeowners and Renters.

It’s the state’s attempt to help tenants and homeowners deal with New Jersey’s sky-high real estate taxes.

It replaces the Homestead Rebate and gives qualifying homeowners up to $1,500 and renters $450, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

“Most people will simply deposit the funds into their checkbook,’ he said.

You have several options.

“If you ask your mortgage company to add the funds to your escrow account, the funds will just sit there,” Kiely said. “The necessary funds to pay your property tax and homeowner’s insurance are already accounted for in your monthly mortgage payment.”

Kiely called using the funds to lower your mortgage balance “an excellent use of the funds.”

“I believe everyone should have paid off their mortgage by the time you retire,” he said.

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This story was originally published on April 7, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.