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“What kinds of things do I need to buy a house in New Jersey?”
This is a common question among home buyers, and the answer can vary depending on whether or not you’re using a mortgage loan. Most home buyers in the state do use mortgage loans to help finance their purchases. So that’s the angle we will take when addressing this question.
Here are some of the things that might be needed when buying a house in New Jersey, using a mortgage loan.
1. You (might) need a down payment when buying a house in NJ.
Unless you use a mortgage program that offers 100% financing, such as the VA program for military personnel, you will probably need a down payment of some kind when buying a home in New Jersey.
Which leads to the next question: How much will you have to put down when purchasing a house?
The minimum required investment can vary from one mortgage loan program to the next. For example, conventional loans (that are not insured by the government) allow for down payments as low as 3% in some cases. The FHA program requires borrowers to put down 3.5% of the purchase price or appraised value. The VA loan program offers 100% financing, which eliminates the need for a down payment.
So that’s one of the first things you might need to buy a house in New Jersey — an upfront investment. Also keep in mind that your down payment funds could be provided by a third-party, such as ...
FHA loans are a popular mortgage option among home buyers in New Jersey, particularly for first-time buyers with limited down-payment funds. So we’ve put together a list of frequently asked questions (and answers) for those who are thinking of using a New Jersey FHA loan in 2018.
What Is an FHA Loan?
An FHA-insured mortgage loan is different from a “regular” conventional home loan because it receives insurance backing from the federal government. The Federal Housing Administration (part of HUD) insures mortgage lenders against losses that can result from borrower default, or failure to repay.
This is what makes NJ FHA loans unique from other mortgage programs. As a result of the government backing, this mortgage program offers flexible qualification criteria for borrowers.
What Are the Eligibility Requirements?
Anyone who meets the basic eligibility requirements can use a New Jersey FHA loan to buy a home in 2018. There is a common misconception that this program is limited to first-time buyers. But that’s not true. First-time and repeat buyers can use this program, as long as they meet the minimum criteria.
- NJ FHA loans require borrowers to make a minimum investment of 3.5% of the purchase price or appraised value. That’s the smallest down payment you can make when using an FHA loan to buy a house in New Jersey.
- Borrowers who wish to take advantage of this relatively low down ...
New Jersey homeowners with home equity loans will no longer be able to deduct from their taxes the interest paid on those loans, according to new legislation. This is the result of the sweeping tax law signed by President Trump in December.
Here’s what you need to know about these tax-code changes 2018, as they apply to home equity loans in New Jersey.
Home Equity Loan Tax Deductions Eliminated
In the past, most homeowners with home equity loans were able to deduct the interest paid on those loans, up to $100,000 in most cases (or $50,000 for married couples filing separately). With the passage of the Tax Cuts and Jobs Act, however, that deduction is going away.
These changes apply to home equity loans taken out in 2018 and onward, as well as those that were taken out in the past. In other words, the old deduction will not be grandfathered.
Despite these changes, home equity loans can be still a useful financing tool for some homeowners. It’s one of the cheaper ways to borrow money. That’s because the average rates assigned to these loans are typically much lower than credit card rates and other forms of financing. The new law just means that the interest paid on a home equity loan in New Jersey is no longer deductible, staring in 2018.
Still, that’s enough to get the attention of many homeowners. New Jersey is an expensive state in which to live, so homeowners have long cherished these and other deductions as a way to lower ...
The real estate escrow process in New Jersey is something that generates a lot of questions (and sometimes confusion) among home buyers. This is especially true for first-time buyers who have never navigated the process before.
Today, we’ll look at some of the steps that occur during the escrow process in New Jersey, as well as covering some important terminology.
The Escrow Process for New Jersey Home Buyers
In a real estate context, “escrow” refers to the period of time in between the purchase offer and the final closing. During this process, funds are collected and documents are prepared to finalize the sale of the home.
We will talk more about the process in a moment. But first, a quick definition:
Escrow is a broad term that can mean several different things. It can refer to a process, as well as the money and documents collected during that process. An official definition of escrow is “an item of value, money, or documents deposited with a third party to be delivered upon the fulfillment of a condition.” In a real estate transaction, this can refer to money deposited by the buyer as part of the purchase offer, as well as documents relating to the sale of the home.
You can think of the escrow process in New Jersey as an intermediate step during the home buying process. In a typical transaction, a buyer will provide an earnest money deposit to show the seller that they are ...
Home buyers in New Jersey tend to have a lot of questions about the mortgage application, processing and closing process. In particular, many buyers want to know about the mortgage documents that are needed in New Jersey.
The list of required documents can vary based on the type of home loan you are using and other factors. With that being said, there are certain mortgage documents that are required for most home-buying scenarios. They are explained below.
Mortgage Application and Closing Documents in New Jersey
When you apply for a mortgage loan in New Jersey, you will be asked for a variety of documents relating to your finances. Here are some of the “usual items” that are required during the mortgage application, underwriting, and closing process in New Jersey.
- Bank statements for the last few months, for accounts the borrower holds. If more than one person will be named on the mortgage loan, they will each have to provide banking documents.
- Tax returns for the last year or two. These documents can be sent straight to the mortgage company from the IRS. The home buyer typically completes IRS form 4506-T (Request for Transcript of Tax Return), which enables this to happen.
- Recent pay stubs showing year-to-date earnings.
- Name and contact information for the borrower’s employer, and possibly previous employers as well.
- Most recent statements ...