Buying a home at the Jersey Shore? What you need to know about mortgage lenders in New Jersey and mortgage loans.
Getting a home mortgage loan might seem daunting these days. There are choices you need to make, much like the choices you make in the type of real estate agent representation.
Generally, mortgage lenders in New Jersey fall into two categories, direct lenders and mortgage brokers.
Direct lenders, either a bank or mortgage banker, fund your loan upfront but will usually sell many loans in a package, so after closing there might be another company servicing your mortgage.
Mortgage brokers generally represent several lending sources and act as intermediaries between you and several lenders.
No matter your choice, find a mortgage lender in New Jersey you trust and feel comfortable working with. Ask friends and family for referrals, talk to your real estate agent. Learn as much as possible about the individual, his or her experience and the company he or she represents before moving forward. Learn about the fees and costs of the loan product.
There are also several types of loans offered by mortgage lenders in New Jersey. The most common are conventional, FHA, VA and USDA.
- Conventional Mortgage Loan - a common type of mortgage secured by collateralized property and not insurance or guaranteed by the government. Because the loan is secured by collateral in the property at least 20% or more of the purchase is usually required for a down payment.
- FHA Mortgage Loan - a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). They are popular with first time buyers because of the low down payment requirements. To use this type of mortgage for a condo, the condo development must be approved by the FHA.
- VA Mortgage Loan - a home mortgage loan granted by a lending institution to qualified veterans of the U.S. Armed forces or to their surviving spouses and guaranteed by the VA. It can be used to purchase on conventional homes, mobile homes, and condominiums. To use this program, which provides 100% financing veterans must have a ‘Certificate of Eligibility’. VA loans are assumable, with the approval of the Veterans Administration, and allow funding fees to be rolled into the loan.
- USDA Mortgage Loan is a home loan program offer by the Rural Development Authority in the US Department of Agriculture. This program can provide 100% financing with no private mortgage insurance. The home must be located in an area defined as rural by the USDA and borrowers must meet certain income guidelines. As unlikely as it may seem, many areas in New Jersey qualify for USDA Mortgage Loan programs. Click here to view property eligibility.
New Jersey has some specific mortgage loan assistance available through the NJ Housing and Mortgage Finance Agency (HMFA).
Live Where You Work (LWLW) – This program is a home mortgage incentive program that provides low-interest mortgage loans to homebuyers purchasing homes in towns where they are employed. Check the HMFA website to see if the town you’d like to live in is covered by this program.
If you would like to buy a house in the town where you currently work, then LWYW might be right for you. Employees benefit from attractive mortgage rates, more flexible loan application review and underwriting criteria, and reduced commuting times to work. Municipalities benefit from having a committed workforce living nearby, and the activity and economic vibrancy that comes with people living near where they work. Click here for the LWYW fact sheet.
Home Ownership for Performing Employees (HOPE) is an employer guaranteed loan program that offers no down payment, below-market, fixed rate mortgages to eligible employees without private mortgage insurance. Employers must be approved by the HMFA. Here is the HOPE fact sheet.
So take some time to explore the internet, talk to friends and do some investigating to find a mortgage lender in New Jersey that you can work with, and that can provide you the information necessary to make the right decision on the type of mortgage loan for your Jersey Shore home purchase.
This, Mortgage Lenders in New Jersey and Mortgage Loans report is part 2 of a 6 part series on home buying at the Jersey Shore.
- Lenders and Loans
- Homes and Communities
If you need an Accredited Buyer's Representative (ABR) at the Jersey Shore, give me a call!
Keller Williams Realty – Atlantic Shore
Laura Giannotta, ABR®