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Home buyers in more expensive real estate markets, like some in New Jersey, often have to use jumbo mortgage loans when buying a house. Which begs the question: What is considered a jumbo loan in New Jersey? What’s the threshold or limit?
Depending on the county where you plan to buy a home, a jumbo loan might be anything above $424,100 or $636,150. See the next section for a county-by-county breakdown.
What Is a Jumbo Loan in New Jersey?
By definition, a jumbo loan is when the amount being borrowed exceeds the conforming loan limits used by Fannie Mae and Freddie Mac. These limits are established by the Federal Housing Finance Agency (FHFA0, which regulates Fannie and Freddie.
Loan limits are based on median home values, which means they can vary from one county and region to the next. When a person borrows more than these limits, it is considered to be a jumbo mortgage product.
So let’s get specific. What is considered a jumbo loan in New Jersey? Depending on where you live, the conforming limit for your county is either $424,100 for $636,150 (as of 2017). So a jumbo mortgage would be anything above those amounts. These are referred to as the “floor” and “ceiling” limits.
Here’s how it breaks down by county:
- Floor areas: The conforming loan limit is $424,100 in the following counties: Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer, Salem and ...
This might come as a surprise to many borrowers. The latest industry reports showed that jumbo loan rates in New Jersey and nationwide were lower, on average, than the rates for smaller conforming mortgage loans.
In New Jersey’s pricier real estate markets, like those within the New York City metropolitan area, home buyers often have to use jumbo mortgage loans to finance their purchases. A jumbo loan is one that exceeds the conforming loan limits established by the Federal Housing Finance Agency.
Because there’s a higher amount being borrowed, you might think jumbo loan rates in New Jersey would automatically be higher than those assigned to smaller loans. But that’s not always the case. In fact, the opposite is frequently true.
New Jersey Jumbo Loan Rates Lower Than Conforming?
For many years, jumbo loans did in fact have higher average mortgage rates than their smaller conforming counterparts. But we saw a reversal of that trend a few years ago.
The latest Weekly Application Survey conducted by the MBA revealed a continuation of this seemingly counterintuitive trend. Mortgage rates for jumbo loans in New Jersey and nationwide were once again lower than the average rates assigned to smaller conforming loans.
Here are some trends identified in the MBA’s report from October 25, 2017:
- Conforming: The average mortgage interest rate assigned to 30-year fixed home loans ...
We receive quite a few questions about interest-only mortgage loans in New Jersey, and in particular jumbo mortgage loans with an interest-only payment structure. So we thought it would be helpful to publish and explain this topic. Here’s what you should know about interest-only jumbo mortgage loans in New Jersey.
Interest-Only Jumbo Loans: How it All Works
Interest-only home loans can be either conforming or jumbo. These terms relate to the size of the mortgage in relation to pre-established limits or “caps.” This will all make more sense if we cover some basic terminology.
Interest-only mortgage: As the name suggests, an interest-only mortgage loan is one where the borrower pays only interest for a specific period of time. During this time, the principal balance remains the same. While these products can vary in their structure, most have an interest-only period lasting from five to ten years. After that, the borrower would begin to make payments toward the principal as well as the interest. So the monthly payments would increase in size.
Jumbo mortgage loan: A jumbo or “non-conforming” home loan is one that exceeds the conforming limits set by the Federal Housing Finance Agency. A conforming loan is one that adheres to these limits and can therefore be sold to Fannie Mae and Freddie Mac. A jumbo loan exceeds these limits and generally cannot be sold to Fannie or ...
When shopping for a mortgage loan in New Jersey, you have a lot of options. The key is to make an informed decision — and we can help! This is the first in a two-part series that explains the different types of mortgage loans in New Jersey. It examines the key differences between fixed and adjustable-rate loans.
Types of Mortgage Loans in New Jersey
One of your primary choices has to do with the rate structure on your loan. You can choose to have a fixed-rate mortgage with an interest rate that remains the same over time, or an adjustable-rate mortgage that can change or “reset” over time. Its important to select a mortgage program that meets your financial goals and objectives. Here are the key differences between a fixed and adjustable:
Fixed-Rate Loans Offer Long-Term Predictability
A fixed-rate mortgage loan (FRM) has an interest rate that stays the same for the entire repayment term. The rate you receive when you first take out the loan is the rate you will keep for as long as you hold onto it.
Payment stability and predictability are the primary advantages with this type of New Jersey mortgage loan.
Fixed-rate loans come with different term lengths, with 15 and 30-year being the most popular. The 30-year fixed mortgage, in particular, is the most popular financing option among home buyers in New Jersey and nationwide. Many borrowers prefer this option because it offers a degree of certainty, and it reduces the monthly payments by spreading them out over a ...
Are you thinking of buying your first home in New Jersey in 2018? If so, keep reading. Below, we have rounded up the latest mortgage industry and housing market news that’s relevant to home buyers.
5 Things to Know When Buying a First Home in New Jersey
Home prices across the state are still rising, and additional gains are expected in 2018. Interest rates might trend upward over the coming months as well. Inventory remains tight in some NJ housing markets. These are just a few of the trends you should know, when buying your first home in New Jersey in 2018.
1. Home prices are still rising, and will likely continue in 2018.
On average, house values across the state of New Jersey have risen steadily over the last couple of years. And the latest round of predictions from economists suggest they will continue to rise into 2018 as well. This is the first thing you should know about buying a home in New Jersey in 2018.
According to the real estate information company Zillow, the median house value for NJ reached $308,300 in October 2017. That was a 5% increase over the same month a year earlier. Looking forward, the company’s economists expect prices to continue rising through the end of 2017 and into 2018 (though they could slow down a bit).
2. Housing market inventory declined during 2017.
While housing markets across New Jersey are not as tight as they are in places like California and the Pacific ...