New Jersey Mortgage Overview
New Jersey is known as the Garden State and
borders the two amazing states of Pennsylvania and New York. It's a popular
state with 8.8 million people living there! If you want to be one of them,
expect an average home price of $335,600, which is higher than the national
If you're thinking of living in New Jersey,
here are your loan options, but NJ lenders often have stricter requirements
than other states.
New Jersey conventional loans
You need great
credit and a max 36 percent debt ratio for the conventional loan. First-time
homebuyers can get by with a 3 percent down payment and subsequent homebuyers
need 5 percent down. If you put down less than 20 percent, you'll pay Private
Mortgage Insurance until you owe less than 20 percent of the home's value.
New Jersey FHA loans
FHA loans have more
flexible guidelines with a minimum 580 credit score and a 3.5 percent down payment.
Borrowers may have a 45 - 50 percent debt ratio, but some lenders are stricter
than others. FHA loans require mortgage insurance for the loan's term in
exchange for the more flexible guidelines.
New Jersey VA loans
If you serve or are serving
in the military you may secure 100 percent financing from a VA lender. You'll
need at least a 620 credit score and enough income to cover the mortgage,
consumer debts, and daily living costs. You don't need a down payment. VA loans
don't require mortgage insurance, but there is an upfront funding fee most
New Jersey USDA loans
If you don't qualify for
the above loans, the USDA loan may be a good option if your household income is
less than 115% of the area's median income. You'll need at least a 640+ credit
score to qualify. USDA loans provide 100 percent financing and have low
interest rates and low mortgage insurance for the life of the loan.
Programs in New Jersey
First-Time Homebuyer Program
offers a competitive 30-year fixed interest rate if you make less than 140
percent of the area's median income. You may also include down payment
assistance to make the loan even more affordable.
Down Payment Assistance Program
receive up to $10,000 in down payment assistance. This is a second loan with no
interest and is forgivable after 5 years. You are only eligible if you use the
First-Time Homebuyer Program. Not all NJ lenders are offering this program
during the pandemic, so shop around.
Police and Fireman's Retirement System Mortgage
Active police and fireman (one-year o service) may qualify for this low-interest
30-year fixed loan program for loans up to $548,250.