For many home buyers in New Jersey, the down payment represents the single biggest obstacle to homeownership. But in some cases, it’s only a perceived obstacle. The truth is today’s down payment requirements for New Jersey mortgage loans are lower than most people realize. Here’s what you should know about it, as a home buyer.
A 20% Down Payment Isn’t Always Necessary
A 2016 survey conducted by the National Association of REALTORS® found that 66% of people thought they needed more than 20% for a down payment on a house. That’s a common misconception.
The truth is borrowers don’t necessarily need a down payment of 20% to buy a house. The average down payment among New Jersey home buyers is somewhere around 10%, and there are financing options available today that allow for an even smaller down payment. But a lot of people don’t realize this.
Home Loans With Lower Investment Requirements
Can’t come up with 20% when buying a home in New Jersey? You still have options. Here are some examples of financing strategies with a lower down payment requirement.
- Conventional loans with 3%: Fannie Mae and Freddie Mac, the two government-sponsored enterprises ...
When buying a home with a mortgage loan in Bergen County, it’s important to understand the various loan limits and how they might apply to you as a borrower. Here is an up-to-date explanation of Bergen County loan limits for FHA and conventional conforming home loans.
Bergen County Loan Limits in 2017 and 2018
Some mortgage programs limit the size of the loan that can be acquired or insured. These maximum amounts are aptly referred to as “loan limits.” They tend to vary by county, because they are based on home values that also vary by location.
Here are the current (2017) FHA and conforming loan limits for Bergen County:
- Conforming: For 2017, the loan limits for conforming (conventional) home loans were set. For a single-family home purchase in Bergen County, the conventional loan limits is $636,150 — the same as FHA. In other parts of New Jersey, the conforming limits are sometimes set lower at $424,100, as a result of lower home values.
- FHA: The limits for Federal Housing Administration (FHA) loans within the state of New Jersey range from $275,665 to $636,150. Since it’s located in one of the more expensive parts of the state, the Bergen County FHA loan limit ...
According to the National Association of REALTORS®, condos have become increasingly popular among home buyers in New Jersey and across the nation over the last few years. When compared to a single-family detached house, condominium units offer smaller sizes, less maintenance, and in many cases lower prices. Here are five tips for buying a condo in New Jersey in 2017 or 2018.
A Look at the NJ Condominium Market in 2017
One of the first things you should do before buying a condo in New Jersey is to research the local real estate market, with an emphasis on condominium sales and prices. Here are some quick stats from the state’s Realtor association:
- In July 2017, there were 2,198 closed sales for townhouses and condos in New Jersey, an increase of 5.1% from a year earlier.
- The median sales price for condos and townhouses climbed to $260,000 in July 2017. That was an increase of 4% from the same month a year earlier. And prices appear to be rising still, heading into the fall.
- New Jersey condos are also selling a bit faster today than they were a year ago. In July, the “median days on market” was down to 61, a 14% decline from the same month in 2016.
5 Tips for Buying a Condo in New Jersey
With those stats out of the way, let’s look at some tips for buying your first condo in New Jersey.
1. Include association fees within your budgeting process.
Both houses and ...
Housing and economic forecasts are an imperfect science. Mortgage rate forecasts for New Jersey are the equivalent of an educated guess. Still, they do offer some useful insight into how the market might change over the coming months. And if the latest predictions prove accurate, that change could be summed up with just two words: gradual rise.
Two Mortgage Rate Forecasts for New Jersey Borrowers
According to the latest forecasts, mortgage rates in New Jersey are expected to rise gradually through the end of 2017 and also throughout 2018.
On September 20, the economists at Freddie Mac publish their latest long-range forecast for the U.S. economy and the housing market. Among other things, this report includes an outlook for lending rates.
Freddie Mac’s analysts expect that the average rate for a 30-year fixed home will end up averaging 4.0% for 2017. Looking beyond that, they expect the benchmark 30-year loan to average 4.4% during 2018. This is just one of several forecasts that suggest New Jersey mortgage rates could climb over the months ahead.
Similarly, the Mortgage Bankers Association (MBA) updated its ...
FHA-insured mortgage loans are a popular financing option among home buyers in New Jersey. They’re especially popular with first-time buyers, though they are not limited to this group. Here’s a quick look at the basic FHA loan requirements for New Jersey borrowers, updated for 2017.
FHA Loan Requirements in New Jersey
The Federal Housing Administration’s mortgage insurance program is managed by the Department of Housing and Urban Development (HUD). So it is HUD that establishes all of the guidelines and requirements for FHA loans issued to New Jersey borrowers.
Many of these guidelines can be found in HUD Handbook 4000.1, also known as the Single-Family Housing Policy Handbook. But that resource contains nearly 1,000 pages, and you’re a busy person. So we’ve pulled out a few of the most importantrequirements for an FHA loan in New Jersey.
Related: A forecast for the NJ housing market
A Minimum Down Payment of 3.5%
New Jersey home buyers who use an FHA loan to purchase a house must make a down payment of at least 3.5%. Specifically, that’s 3.5% of the purchase price or the appraised value, whichever is less. HUD refers to this as the minimum required investment, or MRI.
The good news is you can obtain down-payment funds from a third party, such as a family member or employer. FHA allows for “gift funds” from a variety of sources, including family members, ...