New Jersey first-time homebuyer

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What you need to know about buying a home in New Jersey

Buying your first home can be tricky. But there is a lot of help. Garden State has a variety of tips, advice and educational courses for aspiring shoppers.

And you may even end up in line for some serious financial help with your down payment and closing expenses. New Jersey has many assistance programs for first-time shoppers. Here’s how to get started.

Proof of Eligibility to Buy a Home in New Jersey (July 9, 2021)


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New Jersey Home Buyers Review

Housing prices in Garden State have jumped 24% between the first quarters of 2020-2021. Thus, for the first time in the state, buyers may find they want to take advantage of the assistance programs described below.

New Jersey Home Buyer Review
Average home selling price USD 500 630
Minimum down payment in New Jersey (3%) USD 15,020
20% down payment in New Jersey USD 100 130
Average credit score in New Jerseyone 721
Maximum New Jersey Home Buyer Grant2 Up to $ 40,000 in down payment and Jersey City closing assistance

Down payment amounts are based on the latest available average home sales price. The “minimum” down payment assumes a 3% discount on regular mortgages with a minimum credit rating of 620.

If you are eligible for a VA Loan (sponsored by the Department of Veterans Affairs) or a USDA Loan (supported by the USDA), you may not need any upfront payment at all.

Mortgage for the first home buyer in New Jersey

If you are buying a home in New Jersey for the first time with a 20% down payment, you can get a regular loan with a low interest rate. And you never have to pay for private mortgage insurance (PMI).

Of course, few newbie shoppers have amassed enough to save 20%. But the good news is, you don’t need this. Not at all.

Borrowers can often get into a new home with as little as 3% or even 0% using one of these low down payment mortgage programs:

  • Normal 97 – From Freddie Mac or Fannie Mae. The down payment is 3% and the minimum credit rating is 620. You can usually stop paying mortgage insurance after a few years.
  • FHA loan – Supported by the Federal Housing Administration. 3.5% down and a minimum credit rating of 580. But you’re on the hook for mortgage insurance until you refinance a different type of mortgage, move home, or pay off your loan.
  • VA credit – For veterans and military personnel only. Zero down payment required. The minimum credit rating varies depending on the lender, but is often 620. After closing, mortgage insurance does not exist. These are arguably the best mortgages available, so apply if you are eligible.
  • USDA Loan – For people with low or moderate income who shop in certain rural areas. Zero down payment required. Credit rating requirements differ depending on the lender, but often 640. Low mortgage insurance rates
  • New Jersey Home and Mortgage Agency Loan Programs – May include competitive interest rates and down payment assistance. More details below

Depending on the mortgage loan you choose, you can potentially get into your new home with a minimum of out of pocket money.

These programs even allow you to use donated money or assistance in paying a down payment (DPA) to cover the down payment and closing costs.

If you are not sure which program to choose for your first mortgage loan, your lender can help you find the right program for your finances and home buying goals.

Find The Best Home Purchase Loan For Your First Purchase (July 9, 2021)

New Jersey Home Buying Programs

IN New Jersey Housing and Mortgage Finance Agency (NJHMFA) says it “is delighted to offer step-by-step instructions and tools available to help you make the right home buying decision.”

A good place to start is download The Road to Home New Jersey: A Guide for a New Jersey Homebuyer from their website. This is also available in spanish

If you need help with a mortgage loan, NJHMFA can put you in touch with one of their approved mortgage lenders.

If you qualify, the lender should offer you a competitive 30 year fixed rate mortgage. This will be a government insured loan secured by FHA, VA or USDA (depending on your eligibility for each program).

To qualify, you need:

  • First time home buyer
  • Within local household income
  • Buying real estate within the purchase price
  • Buying a home as your primary residence

This PDF will tell you that the income and selling price are where you want to buy in most of the state. As well as This gives similar information if you are shopping in a targeted urban area.

If you need financial assistance with your down payment and closing costs, you will have to use one of the participating NJHMFA lenders.

New Jersey New Home Buyer Grants

NJHMFA can provide prepayment and close assistance up to $ 10,000.

Technically, it starts out as a loan, not a grant. But the loan is interest-free and there are no monthly payments. Better yet, if you have lived in the house for five years without selling, refinancing and paying off the loan ahead of schedule.

In other words, if these conditions are met, the down payment loan becomes a grant after five years, and you do not need to pay back a cent.

As described in the previous section, you must obtain an FHA, VA, or USDA loan as a first-time buyer to be eligible. And you have to be within the income and housing prices.

Please note that this is a state-level DPA program. There are probably other programs of assistance at the local level. So talk to your real estate agent and / or loan officer about other options where you plan to buy.

Proof of Eligibility to Buy a Home in New Jersey (July 9, 2021)

Buying a Home in Major New Jersey Cities

Housing prices in New Jersey cities are rising at very different rates.

In Newark, for example, they rose just 2.4% year on year in May 2021. But in Paterson, they grew by an extraordinary 45.7% over the same period.

Most of us have to move to a particular city for work or family reasons. But if you have flexibility in terms of work and location, you can choose the real estate market that you can best afford – perhaps even if it’s a little outside your favorite city.

Newark buys home for the first time

According to Realtor.com, the median home price in Newark was $ 359,000 in May 2021. This is 2.4% more than last year.

If you are looking to buy a home at this average price, your down payment options can range between:

  • USD 10,770 with an initial payment of 3%
  • USD 71,800 with an initial payment of 20%

Newark itself does not appear to have homebuyer assistance programs of its own. But he is in Essex County and so it is. Unfortunately, there is little information available on the Internet. But you can call (973) 655-0200 to learn more about Essex County Down Payment Assistance Programs.

Jersey City buys home for the first time

According to Realtor.com, the median home price in Jersey City in May 2021 was $ 640,000. This is 20% more than last year.

If you are looking to buy a home at this average price, the down payment options can be as follows:

  • USD 19,200 with an initial payment of 3%
  • USD 128,000 with an initial payment of 20%

IN Jersey City Gold Quarters Home Ownership Program can provide loans of up to $ 40,000 to cover the down payment and closing costs for first-time shoppers in the city.

His newsletter looks pretty dated. But you can call (201) 547-5000 for the latest information.

Paterson buys home for the first time

According to Realtor.com, the median home price in Paterson was $ 335,000 in May 2021. This is 45.7% more than a year earlier.

If you are looking to buy a home at this average price, the down payment options can be as follows:

  • USD 10,050 with an initial payment of 3%
  • USD 67,000 with an initial payment of 20%

If a Paterson City there is a prepaid assistance program, the information is not relevant online. But you can call (973) 321-1600 to see what’s on offer now.

Where to Find Help Buying a Home in New Jersey

All of the organizations we have listed above are required to advise free of charge anyone who purchases a home in New Jersey for the first time.

In addition to our selection, the United States Department of Housing and Urban Development (HUD) provides several listings of state, region, and local government resources:

National and regional resources for the first home buyer

New Jersey First Home Buyer Resources by County

What are the mortgage rates in New Jersey today?

You can see the current mortgage rates in New Jersey here

When you’re ready to begin the home buying process, make sure you get personalized rate quotes from at least 3 mortgage lenders.

Don’t just look at advertised rates on the Internet; actually apply for pre-approval and compare the interest rates and fees offered to you. This is the only way to know that you are getting the best deal on your new home loan.

Confirm New Bid (July 9, 2021)

oneSource: Experian.com, 2021 survey, data for 2020.

2Based on a review of available state DPA grants at the time of writing

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