Overview of New Jersey Mortgages
With more than a hundred miles of Atlantic coastline, quick access to Philadelphia and New York City and close proximity to historical icons like Ellis Island and the Statue of Liberty, the Garden State is a hot spot for realty. Historical New Jersey mortgage rates stick closely to the national average rates. New Jersey counties’ conforming loan and FHA limits vary widely, with many counties going well above average rates.
National Mortgage Rates
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New Jersey Mortgage Rates Quick Facts
Historical Mortgage Rates in New Jersey
New Jersey is one of the top five smallest states in size but ranks as the number 11th most populous state in the nation. The state’s mortgage rates are typically very close to the national average. Current 2016 mortgage rates are following that trend, running just slightly above the average national mortgage rate.
New Jersey Historic Mortgage Rates
|Year||New Jersey Rate||U.S. Rate|
New Jersey Mortgages Overview
As is typical of many Northeastern states, property in New Jersey is pricier than the nation’s average. The average home sells for $303,350, which is above the nation’s average of $236,450, according to Zillow.
New Jersey Mortgage Rates
|Percentage of Homes||83.10%|
|Average Property Value||$194,416.75|
|Percentage of Homes||14.20%|
|Average Property Value||$152,975.37|
|Percentage of Homes||1.30%|
|Average Property Value||$142,212.59|
|Percentage of Homes||1.40%|
|Average Property Value||$103,514.62|
The conforming limits for New Jersey counties range from the standard $417,000 up to $625,500. The FHA loan limits see a lot of variation. Just one county – Cumberland – has the average $271,050 limit. Twelve counties have conforming and FHA loan limits of $625,500. They are Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somserset, Sussex and Union. The higher than average loan limits are an indication of how expensive real estate is in New Jersey.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
New Jersey sellers have no required disclosures when they put their house on the market, but because of the state’s “common law,” there are certain things sellers should disclose to avoid going to court later on. These would include known defects and anything outlined in a contract of sale. While this protects buyers, a home inspection is still the smartest way to proceed with a property purchase.
30-Year Fixed Mortgage Rates in New Jersey
Unless you can afford to come up with a boatload of cash to purchase a New Jersey house, you are going to be in the market for a home loan. With a 30-year fixed-rate mortgage, as its name tells you, you have 30 years to pay off the loan and the interest rate remains the same or is “fixed” for that entire period of time.
Another option is a 15-year fixed-rate mortgage: you will have less time to pay off this loan and your monthly payments will be higher but you can expect a lower interest rate.
The average New Jersey mortgage rate for fixed-rate 30-year mortgages is 4.33%.
New Jersey Jumbo Loan Rates
Throughout most of the country, the conforming loan limit is $417,000. That means if you take out a home loan that is over $417,000, you will have what is considered a jumbo loan which comes with higher interest rates. In some pricier areas of the U.S., the conforming loan limit jumps to $625,500. This is an acknowledgment of more expensive real estate in those places and you have a bit more leeway to work with before your home loan is considered a jumbo loan.
In the 12 New Jersey counties with a $625,500 conforming loan limit, you can take out a home loan up to that amount and it is still considered a standard loan and is eligible for normal interest rates. The average jumbo loan rate in New Jersey is 4.38%.
New Jersey ARM Loan Rates
An adjustable-rate mortgage (ARM) usually offers a lower interest rate for an introductory period of one, three, five, seven or 10 years. When that period ends, the interest rate can change and typically it goes up. If you choose with an adjustable-rate mortgage, know that the interest rate can’t suddenly jump to a level that is off-the-charts high. The interest rate is capped at a specific level in the loan’s terms, which prevents that from happening. However the new interest rate could still be higher than what you can afford to pay. It is important to check the potential maximum interest rate listed in the terms to ensure that it still fits within your budget.
The average rate for an ARM in New Jersey is 3.77%.
New Jersey Mortgage Resources
Whether you’re just starting out or looking for help on your current mortgage, there are resources out there to provide financial assistance for Garden State homebuyers.
The New Jersey Housing and Mortgage Finance Agency Homeward Bound Homeowner program offers 30-year, government-insured loans at a fixed interest rate with no points. The program is open to first-time homebuyers, as well as trade up and trade down borrowers.
The New Jersey Housing and Mortgage Finance Agency also has a Smart Start program, which helps homebuyers with down payment and closing cost assistance. This program is available for buyers through the NJHMFA’s Homeward Bound Program who are purchasing homes in designated “Smart Growth Areas.” The program provides zero-interest down payment and/or closing cost funding for up to 4% of the mortgage amount. The loan is forgiven for buyers who live in their home for five years.
There is additional funding available through the State of New Jersey Recovery and Reinvestment Weatherization Assistance Program, which helps income-qualifying residents with services to reduce energy costs and boost the health and safety of the homeowner.
For Jersey homeowners facing severe negative equity or a financial hardship like unemployment, the New Jersey HomeSaver Program offers up to $50,000 in Hardest Hit Funds to help reduce monthly mortgage payments.
|Resource||Problem or Issue||Who Qualifies||Website|
|New Jersey Housing and Mortgage Finance Agency Smart Start||Assists with down payments and closing costs.||Must be enrolled in Homeward Bound program and buying a home in designated areas.||http://www.state.nj.us/dca/hmfa/homeownership/buyers/smart/|
|New Jersey Housing and Mortgage Finance Agency Homeward Bound Homeowner Program||Provides a 30-year, government insured loan, at a fixed interest rate with no points.||The program is open to first-time homebuyers, trade up and trade down borrowers.||http://www.state.nj.us/dca/hmfa/homeownership/buyers/homeward/index.shtml|
|State of New Jersey Recovery and Reinvestment||Helps reduce household energy costs via home energy efficiency while boosting home health and safety.||Low income individuals and families whose total household income is at or below 200% of the federal poverty level.||http://www.nj.gov/recovery/programs/wap.html|
|Hardest Hit New Jersey||Offers financial assistance to help bring monthly payment to an affordable level by using Hardest Hit Fund funds for refinancing or modification of the first mortgage loan.||Offers eligible homeowners up to $50,000.||http://njhousing.gov/foreclosure/|
|USDA Rural Development - Single family loans||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; Not be suspended or debarred from participation in federal programs.||http://www.rd.usda.gov/programs-services/all-programs/single-family-housing-programs|
|Home Affordable Refinance Program||Refinancing.||Single family homes and condos that fit within lending loan limits.||http://www.harp.gov/|
The United States Department of Agriculture Rural Development offers nationwide programs in rural communities by offering aid for safe, affordable housing. New Jersey is eligible as well. Loans and grants are available for qualifying residents looking to purchase a new home or repair their current home.
New Jersey Mortgage Taxes
New Jersey charges transfer taxes on real estate transactions. These transfer taxes vary by price and tax status from 0.4% - 1.21%. For homes that cost more than $1 million add a surtax of $5/$500, or 1.0%. Counties can charge up to 0.1% tax. In New Jersey, the seller typically pays this tax.
New Jersey homeowners who itemize deductions on their federal income taxes can deduct the mortgage interest that they pay throughout the year from their taxable income.
New Jersey Mortgage Refinance
If you have decided to refinance in New Jersey, you should be aware that you can work with the original lender who issued your current mortgage or you can work with other lenders. You should look around and compare different rates to find an outcome that works for your particular situation.
Jersey homeowners who want to refinance also have the state Home Affordable Refinance Program as a resource. Residents who qualify will have access to interest and principal payment reductions and low closing costs.
Best Places To Get A Mortgage
SmartAsset’s interactive mortgage map highlights the best counties in the country (and in each state) for securing a mortgage. Hover over counties and states to see data points for each region, or use the map’s tabs to view the top counties for each of the factors driving our analysis.
Methodology For many people buying a house means securing a mortgage. To determine the best places in the country to get a mortgage we looked at four factors: overall borrowing costs, ease of securing a mortgage, cheap property taxes and cheap annual mortgage payments.
To calculate the overall borrowing costs, we looked at the expected costs over the first five years of a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to actual mortgage originations (secured mortgages) in each county. We based annual mortgage payments on the annual principal and interest payments for a $200,000 loan in that location, using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, and then averaged those rankings, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2016 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset