What You Should Know About Buying a Home in New Jersey
Buying your first home can be a challenge. But there is a lot of help. The Garden State offers a wealth of counseling, counseling, and education courses for first-time buyers.
And you could even get some serious financial help with your down payment and closing costs. New Jersey offers numerous assistance programs for first time buyers. How to start.
Confirm Eligibility to Buy a New Jersey Home (July 9, 2021)
In this article (continue to …)
New Jersey Home Buyer Summary
Garden State property prices rose 24% between the first quarters of 2020 and 2021. As a result, first-time buyers in the state may want to use the utilities described below.
New Jersey Home Buyer Summary
Average home sale price
$ 500,630
Minimum deposit in NJ (3%)
$ 15,020
20% deposit in NJ
$ 100,130
Average Credit Score in NJ1
721
Maximum Home Buyer Grant in NJ2
Up to $ 40,000 for Down Payment and Closing Grant in Jersey City
Down payment amounts are based on the last available average home sale price in the state. A “minimum” down payment is assumed to be 3% less than a conventional mortgage with a minimum credit rating of 620.
If you are eligible for a VA loan (supported by the Department of Veterans Affairs) or a USDA loan (supported by the U.S. Department of Agriculture), you may not need a down payment at all.
Mortgages for first time home buyers in NJ
If this is your first time buying a New Jersey home with a 20% down payment, you can get a conventional loan with a low interest rate. And you never have to pay for personal mortgage insurance (PMI).
Of course, only a few first-time buyers have saved enough for 20 percent. But the good news is you don't need that much. By far not.
Borrowers can often move into a new home as little as 3% or even 0% with one of these low down payment mortgage programs:
Conventional 97 – From Freddie Mac or Fannie Mae. 3% down payment and at least 620 credits. You can usually stop paying mortgage insurance after a few yearsFHA loans – Supported by the Federal Housing Administration. Down 3.5% and a credit score of at least 580. But you're looking for mortgage insurance until you refinance, move, or pay off your loan on a different type of mortgageVA loan – For veterans and service members only. A zero deposit is required. The minimum credit score varies by lender, but is often 620. No ongoing mortgage insurance upon completion. These are arguably the best mortgages available. So apply when you are eligibleUSDA loan – For low to middle income people who shop in designated rural areas. Zero deposit required. The creditworthiness requirements vary depending on the lender, but often 640. Low mortgage insurance ratesNew Jersey Housing and Mortgage Finance Agency Agency loan programs – May include competitive interest rates and deposit assistance. More information below
Depending on the mortgage loan you choose, you may be able to get into your new home with minimal cash out of your pocket.
With these programs, you can even use free cash or Down Payment Assistance (DPA) to help cover down payment and closing costs.
If you are unsure which program to choose for your first mortgage loan, your lender can help you find the right deal based on your finances and your home buying goals.
Find the best first-time buyer loan for you (July 9, 2021)
New Jersey First Time Home Buyer Programs
The New Jersey Housing and Mortgage Finance Agency (NJHMFA) says they are "happy to provide you with step-by-step guides and accessible tools to help you make the right home buying decision."
A good place to start is downloading The Road Home New Jersey: A Guide for the New Jersey Homebuyer from their website. It's also available in Spanish.
If you are looking for help with your mortgage loan, the NJHMFA can connect you with one of their approved mortgage lenders.
If you qualify, the lender should offer you a competitive 30 year fixed rate mortgage. This is a federally insured loan that is backed by the FHA, VA, or USDA (depending on your eligibility for each program).
To qualify, you must:
First-time home buyers Within the local household income limits Purchase of a property within the purchase price limits Purchase of the apartment as the main residence
Check out this PDF where to buy income and sales price caps in most states. And this one provides similar details if you are buying in an urban destination.
If you would like financial assistance with your down payment and closing costs, you will need to use one of the NJHMFA's participating lenders.
Grants for First Time Home Buyers in New Jersey
The NJHMFA can provide a down payment and assistance with closing costs of up to $ 10,000.
Technically, it starts as a loan – not a grant. But the loan is interest-free and you don't make any monthly payments. Better still, if you've lived in the home for five years without selling, refinancing, or prepaying your loan, it's forgiven.
In other words, under these conditions, the down payment loan will be converted into a grant after five years and you won't have to repay a penny.
As detailed in the previous section, as a first-time buyer, you must be on an FHA, VA, or USDA loan to be eligible. And you need to be within the income and house price caps.
Remember, this is a nationwide DPA program. There are likely to be other utilities at the local level. So speak to your real estate agent and / or loan officer about other purchase options.
Confirm Eligibility to Buy a New Jersey Home (July 9, 2021)
Buy a home in major New Jersey cities
House prices in the cities of New Jersey are rising at very different rates.
In Newark, for example, they were up just 2.4% year over year in May 2021. In Paterson they had risen by an exceptional 45.7% over the same period.
Most of us have to move to a particular city for work or family reasons. However, if you are flexible about work and location, you may want to choose the real estate market that you can best afford – maybe even if it is a bit outside of your favorite city.
Newark First Time Home Buyers
The average property price in Newark was $ 359,000 as of May 2021, according to Realtor.com. That was 2.4% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
$ 10,770 for 3% deposit$ 71,800 for 20% deposit
Newark itself does not appear to have its own homebuyer assistance programs. But it's in Essex County, and it is. Unfortunately, little information is available on the internet. However, you can call (973) 655-0200 to learn more about Essex County Down Payment Support Programs.
First time home buyer in Jersey City
The average property price in Jersey City was $ 640,000 in May 2021, according to Realtor.com. This has increased by 20% compared to the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
$ 19,200 for 3% deposit$ 128,000 for 20% deposit
The Jersey City Golden Neighborhoods Homeownership Program can provide first-time homeowners shopping in the city with loans of up to $ 40,000 as down payment and closing costs.
Its datasheet looks pretty out of date. However, you can call (201) 547-5000 for the latest information.
Paterson first time home buyer
The average property price in Paterson was $ 335,000 in May 2021, according to Realtor.com. That was 45.7% more than in the previous year.
If you want to buy a home at this average price, your down payment options can be between the following options:
$ 10,050 for 3% deposit$ 67,000 for 20% deposit
If Paterson City has a deposit assistance program, the information online is not up to date. However, you can call (973) 321-1600 to see what is currently on offer.
Where to go in NJ. Find help buying a home
All of the organizations listed above should provide free advice to any first time home buyer in the state of New Jersey.
In addition to our selections, the US Department of Housing and Urban Development (HUD) offers some lists for statewide, regional, and local resources:
Nationwide and regionally Resources for first-time home buyers
New Jersey Home Buyer Resources by County
What are New Jersey Mortgage Rates Today?
Here you can see the latest live New Jersey mortgage rates.
When you're ready to start buying your home, make sure you get personalized interest rate quotes from at least 3 mortgage lenders.
Don't just look at the advertised prices online; Indeed, apply for pre-approval and compare the interest rates and fees that are offered to you. This is the only way you can be sure that you are getting the best possible offer for your new home loan.
Confirm your new plan (July 9, 2021)
1 Source: Experian.com 2021 study on 2020 data
2Based on a review of available state DPA grants at the time of this writing
