Mortgage Rates New Jersey: How To Get The Best Rates
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New Jersey is one of the most densely populated states in the U.S. If you’re planning to buy a home here, you’ll likely experience stiff competition. To land your dream home without going over budget, it’s important to know the local mortgage and refinance rates.
In this guide, we cover all you need to know about mortgage rates in New Jersey. And we won’t just provide data on current New Jersey mortgage rates, we’ll also share some important home buying tips!
Mortgage Loan Options In New Jersey
There are several types of mortgage products, each with its own rates and features. Let’s break down the three major categories:
Conventional Home Loan
Mortgages not offered by government entities are called conventional mortgages. They’re typically available through private banks and mortgage companies and secured by guarantor companies Fannie Mae & Freddie Mac.
Conventional loans follow mortgage loan limits set by the Federal Housing Finance Agency. While the national average conforming loan limit is $548,250, several counties in New Jersey have loan amount limits up to $822,375. If you’re looking for homes priced above the limits in your area, you may need to apply for jumbo mortgages.
The rate & APR on fixed-rate loans are constant, regardless of market performance. Fixed rates mean a fixed monthly payment amount for the loan’s entire life – the unchanging, predictable nature of these rates makes fixed-rate mortgages very popular among long-term financial planners and new home buyers.
Fixed-rate mortgages are commonly available in 30-year loan terms. You can also get 15-year and 20-year terms with better rates but higher monthly payment amounts.
Adjustable-Rate Mortgage (ARM)
An adjustable-rate mortgage’s interest rate & APR change periodically after a fixed-rate introductory period. The ARM rate & APR usually adjusts annually according to an index chosen by the lender.
The introductory interest rate & APR on an ARM is usually lower than its fixed-rate counterparts, making ARMs good for short-term savings. These fixed-rate introductory periods can last anywhere from 3 to 10 years.
Some homes are priced above local conforming loan limits. To help you buy more expensive properties, lenders may offer you a jumbo mortgage.
Jumbo loan terms are similar to conforming fixed-rate and adjustable-rate mortgages. However, jumbos are riskier to the lender because of the higher amounts, and this higher risk to lenders translates to higher rates for you.
As an alternative to conventional loans, you can look into government home loan programs. These loans are offered by several federal institutions and have lower rates, easier financial requirements, and more flexible terms.
The three major government loans are:
FHA loan: These loans are available to anyone with a credit score above 580. Aimed at lower-income homebuyers, FHA loans offer lower rates and no down payment requirements. However, they do come with mandatory private mortgage insurance (PMI) fees.
VA loan: This mortgage program is only available for current and former military personnel as well as their families. The VA offers loans with no down payment and PMI fees, although you’re required to pay funding fees as part of your closing cost.
USDA loan: This loan type is best if you’re buying homes in eligible rural areas. The USDA mortgage program comes with area limitations but provides you with a no-down loan and lower PMI fees.
Refinance loans replace your existing mortgage. There are two refinance types you can choose from depending on your needs:
Rate and term refinance: This type of refinance allows you to alter your mortgage’s length or type. Rate and term refinances help you capitalize on lower refinance rates or convert an ARM into a fixed-rate loan.
Cash-out refinance: As you pay off your loan, your home equity increases. A cash-out refi allows you to convert that equity into cash. This refi offers you a refinance loan larger than your current loan amount. Once you pay off your current mortgage, any money left over is yours to use for other needs.
Current New Jersey Mortgage Rates
Historically, Mortgage rate trends in New Jersey have been very close to the national average. Here, we provide you access to the most current mortgage rates & APR in the state.
The data on this table is taken from America’s major mortgage lenders and will be updated daily.
Today’s Mortgage Rates in New Jersey
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Your actual rates may vary depending on your circumstances. All mortgage rate & APR details in this table are subject to change without prior notice.
For a personalized look at your mortgage rates, use the APR & rate tool at the top of this page. With just a few of your financial details, we can calculate a custom New Jersey mortgage rate for you!
First-Time Homebuyer Programs In New Jersey
The upward home price trend in New Jersey may scare off new homebuyers. To help more people purchase homes in the state, New Jersey offers several assistance programs.
To qualify for programs offered by the New Jersey Housing and Mortgage Finance Agency (NJHMFA), you need to fulfill these conditions:
Your purchased home must be in New Jersey.
You must be a first-time home buyer OR haven’t bought a property in three years.
You meet credit score requirements.
You meet NJHMFA’s income and home price limits.
NJHMFA First-Time Homebuyer Mortgage
If you fulfill the aforementioned conditions, you’re eligible for 30-year state-backed loans. The NJHMFA First-Time Homebuyer loan program features competitive interest rates, and you can even combine it with a local down payment assistance program.
NJHMFA Police And Firemen’s Retirement System Mortgage Program
The state offers housing benefits to public servants, including police officers and firefighters. If you’re a member of the Police and Firemen’s Retirement System with at least one year of service, you’re eligible for this loan. This state-sponsored loan gives you competitive rates to purchase or build a home in New Jersey.
State Down Payment Assistance
NJHMFA mortgage borrowers are also eligible for the state’s down payment assistance program. The program provides you with a $10,000 forgivable loan for your down payment and closing costs.
Buying A Home In New Jersey
With the competitive housing market in New Jersey, you need to move fast. To help you get a running start on your home purchase, here’s a guide to the home buying journey.
Get Preapproved For A Loan
A pre-approval letter is the first step to buying a home. Getting pre-approved shows the seller that you’re committed to buying a home and you’re financially able to do so.
To get pre-approved, apply for a loan from a lender. Once they make sure that you can afford the mortgage, you’ll receive the letter. Typically, a pre-approval letter contains the details of the loan you’re qualified to receive – including its amount, term length, and type.
Find A Real Estate Agent
A good real estate agent with local experience is your best ally and guide. They can answer questions about average property value in the area, local property taxes, and other details you may need to make an informed decision.
Research Home Listings
House hunts typically start with the neighborhood. Pick an area first, then start scouring local home listings.
A good piece of advice is to pick the most affordable home that fits your needs. If it’s priced below your mortgage ceiling, you can use the savings to pay for home improvement projects.
Make The Offer
Homes in New Jersey move fast, so don’t put off the offering for too long. Consult your real estate agent about how much to offer – if possible, sweeten the deal by offering above the listed value.
Schedule Home Inspections And Appraisals
The next step is to do your due diligence. Schedule visits with inspectors and appraisers to examine the home. They can help you pinpoint any issues with the home and ensure you’re getting a good deal out of this purchase.
Close On The Loan
On closing day, you’ll need to sign lots of paperwork and pay your closing costs. Ask your realtor or lawyer if you have any questions and make sure everything is above the board before signing. As soon as the documents are signed, you can start making moving arrangements.
How To Get Better NJ Mortgage Rates
Having the best New Jersey mortgage rates allows you to save money in the long term. Here are our three top tips to lower your interest rates & APR!
Compare Offers From Multiple Lenders
Rate shopping between multiple lenders can help you save. Most mortgage lenders publish their rate and loan term data online, so you can do the legwork at home. Lenders are required to provide a loan estimate document containing their APR & rate details, making it easier to do an apples-to-apples comparison.
Pay For Discount Points
Mortgage points are upfront fees that you can pay for a rate & APR reduction. On average, points will cost you 1% of the loan for a 0.25% rate reduction. For example, if you buy 2 points on a $300,000 mortgage with a 4.5% rate, you’re paying $6,000 to reduce your rates to 4%.
Points are best for those who plan to stay in their home for the long run. If you refinance or sell your home, you could lose out on the savings from your points purchase. Be sure to calculate your potential savings before paying for discount points to see if they're really worth it.
Improve Your Credit Profile
Mortgage lenders determine your rate & APR based on how much risk they take providing your loan. If you’re deemed as a low-risk borrower, they’ll be more confident in giving you better rates.
Because they’re an indicator of your risk profile, a good credit score and debt-to-income ratio helps convince lenders that you’re a good borrower. You can get better rates by improving your credit report. Here are some quick tips:
Pay bills on time.
Report any inconsistencies on your credit report.
Keep your credit card balances low.
To compete in the fast-moving New Jersey housing market, you need to be prepared. Knowing the local rates and enlisting the help of a good local real estate agent can help you snag that dream NJ home.
If you’re looking for a mortgage to buy your New Jersey home, Wesley LLC is here for you. Contact us today for a mortgage consultation with our experts!