Michael J. Bovaird

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Home loans insured by the Federal Housing Administration (FHA) are one of the most popular financing tools used by first-time home buyers in New Jersey. In fact, a recent report by the Urban Institute revealed that 83% of these loans go to first-timers. This article explains why so many first-time home buyers in New Jersey use FHA loans to finance their purchases.

Report: 83% of FHA Loans Go to First-Time Buyers

During summer 2018, the Washington, D.C.-based Urban Institute published a study that analyzed key mortgage lending trends across the country. Among other things, this report offered some insight into FHA loans and who uses them.

Apparently, a lot of first-time home buyers in New Jersey use the FHA loan program to finance their purchases. Across our state and nationwide, roughly 83% of FHA mortgage originations are for first-time buyers. During the recession, usage among first-timers was at 75%. So it seems that more of these buyers are turning to FHA financing these days.

Definition: The Federal Housing Administration does not lend money directly to borrowers. Instead, it insures the loans made by banks and lenders in the private sector. This insurance gives lenders some protection against default-related losses. It also gives borrowers the benefit of a low down payment and flexible criteria.

Here’s a relevant quote from the August 2018 report:

“The Federal Housing Administration ...


What does the average down payment on a house look like in New Jersey? For those who live in the New York-Newark-Jersey City metro area, the median investment was $50,000 in early 2018.

A report published earlier this year by ATTOM Data Solutions revealed the average down payment on a house in the New York-Newark-Jersey City metropolitan area. Technically it showed the median, which is the midpoint for down payments made by all home buyers included in the study. But that’s the closest we can come to determine the average down payment size.

According to that report, home buyers in the New York-Newark-Jersey City metro area made a median down payment of $50,000 during the first quarter of 2018.

Median Down Payment Among New Jersey Home Buyers

In June 2018, the property data company ATTOM Data Solutions published its “U.S. Residential Property Loan Origination Report” that covered the first quarter of 2018. This report offers insight into a variety of housing trends of interest to home buyers in New Jersey. Among other things, it included down payment data for major cities and metro areas across the country.

According to the Q1 2018 report:

“Other metro areas with median down payments of $50,000 or higher in the first quarter were Naples, Florida ($64,750); Seattle, Washington ($59,800); Boston, Massachusetts ($55,000); and New York-Newark-Jersey City ($50,000).”

...

Home buyers are sometimes disappointed to learn that they need private mortgage insurance on their home loans. After all, it’s an extra recurring cost that can increase the size of the monthly payments. But without PMI, many New Jersey home buyers would have to wait a lot longer — and save a lot more money — in order to make a down payment on a home.

A PMI industry report published in June 2018 showed that 22,618 home buyers and homeowners in New Jersey were helped by private mortgage insurance in 2017. In this context, “helped” means that they were able to purchase a home with less money down because of PMI.

Many Home Buyers in New Jersey Benefit from PMI

Earlier this summer, the industry group U.S. Mortgage Insurers (USMI) released a study that revealed just how many borrowers in New Jersey and nationwide were helped by PMI during 2017. In the state of New Jersey, mortgage insurance helped 22,618 borrowers purchase or refinance a home last year.

Definition: Private mortgage insurance, or PMI, is a unique kind of policy that protects banks and lenders from financial losses related to borrower default. In New Jersey, a PMI policy is usually required in financing scenarios where the loan-to-value (LTV) ratio exceeds 80%.

Private mortgage insurance is a standard industry requirement that has been around for a long time. But there’s an upside to it as well. While these policies do result ...


Any local resident in need of a renovation loan will receive a $2,000 credit toward closing costs.  

As of recently, NJ Lenders’ neighbors in Little Falls, New Jersey have been severely impacted by storms and flash flooding in the area. But, as a local member of the business community since 1991, we’re here to help our friends in Little Falls rebuild their homes. As an expert in renovation financing, we can assist those affected by navigating the process of rehabilitating your home quickly. 

Local residents impacted have an opportunity to take advantage of our FHA 203k renovation loan program. This program provides funds for the renovation of a damaged home packaged into a mortgage loan. It can also help provide a homeowner with the financing of buying a home in need of repair, as well as obtaining funds for the refinancing of a property. Requirements for the 203k loan such as credit qualification, down payment, and loan limits are the same as standard FHA-insured loans.

Rehabilitation of properties damaged by the storms can include the following improvements:

  • Repairing structural damage to include major renovation or remodeling
  • Adding or replacing floors and/or floor ...

In a recent blog post, we provided an overview of the mortgage underwriting process in New Jersey. Today we have some good news on this subject for borrowers who are seeking a home loan.

A recent report provided more evidence of a trend we’ve been watching for some time. It showed that mortgage underwriting criteria in New Jersey and nationwide have eased over the past few years.

Mortgage Underwriting Criteria Easing in New Jersey, Nationwide

This report was published in June 2018 by CoreLogic, a property and financial data company based in Irvine, California. They analyzed mortgage loan data for the last few years, with a particular focus on qualification and underwriting requirements such as:

  • Debt-to-income (DTI) ratios
  • Loan-to-value (LTV) ratios
  • Credit scores among borrowers

Their in-depth analysis focused on conventional conforming loans in particular. In a mortgage context, the term “conventional” refers to a loan that is not insured or guaranteed by the government. The “term” conforming refers to home loans that meet or conform to the standards used by Freddie Mac and Fannie Mae. So this study pertains to “regular” mortgage products that fall within conforming loan limits.

Here’s a summary of their findings:

“Mortgage underwriting guidelines have loosened in the last couple of years. To expand the credit box to creditworthy borrowers, ...


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