Forecasts from Zillow predict a continual increase in New Jersey home values over the next few years. The median listing price is currently $329,900, while the median sale price of homes in the state is $277,500.
This sale value is below the national median selling price, which is $320,000. However, New Jersey home values have been on the rise for a few years now, averaging at $275,000 in January 2016, $281,000 in January 2017, and $308,000 at the beginning of 2018.
If you’re looking to purchase a home in New Jersey, you should know that nationwide factors largely impact mortgage rates and refinancing rates. However, local economics will also create competition among lenders, such as state laws, home values and record-high foreclosure rates in New Jersey.
Alongside these kinds of economics, there is a myriad of factors that affect mortgage and refinancing rates in New Jersey and nationwide. In this article, we’ll go over the details of these elements below, as well as offer advice on how to get the best mortgage rates in New Jersey.
Current Mortgage & Refinancing Rates in New Jersey
Critical Elements That Affect Mortgage Rate & Refinance Rates in New Jersey
Several factors affect mortgage and refinancing rates in New Jersey. Understanding them can be the difference between spending and saving thousands of dollars each year.
Credit Score
Lenders use this telling number to determine how reliable you’ll be in paying the loan. Your credit score largely decides whether or not you’ll qualify for a mortgage loan, and what kind of rate to expect. Generally, borrowers with higher credit scores are able to lock in lower interest rates for both mortgage and refinance loans.
Property Type and Location
While there are usually standard statewide rates, some loan amounts and types may differ between counties. Lenders also alter their mortgage and refinance rates depending on their perceived property risk.
Single-family homes tend to be low risk, especially if they are the borrower’s primary residence. On the other hand, vacation condominiums along the New Jersey coast will likely be vulnerable to higher rates.
Loan Term
The duration of your loan is the amount of time you have to repay the loan. Generally, shorter-term loans have lower interest rates but higher monthly payments. You’ll want to determine the difference in rates and monthly payments before settling on a term.
Homebuyers with fewer savings may benefit from paying less each month, while others may be prepared to pay off the loan as soon as possible, even if it means higher monthly payments.
Down Payment
The down payment significantly contributes to the final, overall cost of a mortgage. The more you can put down at the beginning, the lower your interest rates will be. Lenders view homebuyers and homeowners with more substantial down payments as lower-risk borrowers because they have more stake in the property.
Aim to put 20 percent or more down, and you’ll have the highest chances of securing competitive rates.
Type of Loan or Refinance
The type of mortgage or refinancing option you choose often determines the accompanying rates. For instance, there are options with either fixed or adjustable interest rates. The former doesn’t change over time, while the latter may adjust after an initial fixed period.
Rate-and-term versus cash-out or cash-in refinance options will also offer different rates. When applying for a mortgage or refinance, explore various options to determine which type makes the most sense for your property as well as your financial profile.
It pays to not only understand these factors but also consider offers from different lenders before making a final decision. Taking the time to prepare and compare is the ticket to finding the best rates on mortgage loans and refinancing options.
Get the Best Mortgage Rates in New Jersey
Nearly half of Americans fail to shop around for mortgage rates with multiple lenders, according to the Consumer Financial Protection Bureau. In doing so, they forfeit finding the best mortgage rates and refinancing options. Even just a 0.5 percent difference in interest rates can save borrowers thousands of dollars in mortgage payments over the loan term.
There’s incredible value in comparative shopping. Consider these best practices to compare your lender options:
Consider different mortgage and refinance loan options
With several types of mortgages and refinance options available, you’ll want to do some research to educate yourself on the options. Your rate can change as a result of the loan type and term you choose, but keep in mind that the most affordable plan may not always be the smartest option.
For instance, some borrowers benefit from the long-term nature of a fixed-rate mortgage, while others want a mortgage they can pay off faster. Additionally, financial profiles qualify borrowers for different options.
Once you know the types and terms that are right for your situation, you can start comparing the lenders that offer the best deals on the mortgage or refinance loan you’re looking for.
Expand your options
Fill out applications with multiple lenders to see which one will offer you the best deal. It’s also important to inquire about the unique perks of each lender, as these may help you choose one over the other.
Negotiate with lenders
You don’t always have to accept the lender’s offer at face value. In some cases, lenders may cover closing costs or waive underwriting fees. Certain fees are generally open for discussion if the borrower knows to ask, especially when refinancing your home.
Application fees are typically around $275, so ask for a price break if the lender charges way above the average. You can also ask for reductions or waivers for the following fees:
- Appraisal report
- Loan origination
- Document preparation
- Title search
- Title insurance
- Recording
- Credit
Research the average amount for the charges you plan to negotiate so that you can back up your request.
Recommended Companies in New Jersey
Several mortgage lenders offer home loans in New Jersey, which is why it’s so important to shop around to make sure you get the best deal possible. Here are some of our top picks for mortgage lenders in New Jersey, many of which offer the best mortgage rates in the industry.
- Quicken Loans: We rate this lender as No. 1 in mortgage rates because they provide excellent customer service and competitive interest rates. They also offer benefits such as the 90 Day Rateshield
feature, which protects borrowers if home mortgage rates go up within 90 days. - Rocket Mortgage by Quicken Loans: With a streamlined digital loan application process, borrowers can receive pre-approvals from Rocket Mortgage in minutes. The lender further offers customized loan terms and costs to fit your needs and budget.
- New American: This lender is an ideal choice for low-income borrowers, as they offer qualified customers down-payment assistance and grants. They also have more flexible qualification requirements, accepting a minimum FICO score of 580.
- Better Mortgage: Committed to the timeliness, Better Mortgage verifies mortgages in as little as 24 hours. They also offer some of the best pricing in the mortgage industry, backed by the Better Price Guarantee, which commits the lender to beat competitor prices by at least $1,000.
- J.G. Wentworth: With a top rating from the Better Business Bureau and a wide selection of mortgage programs, this respected lender is a desirable choice for homeowners with a credit score of 620 and above. J.G. Wentworth also conveniently offers online applications and quotes.
- NBKC Bank: This lender offers superior customer service, quick closing times, and competitive rates. The online-based mortgages are available in all 50 states, but in-person services are only provided in Kansas and Missouri.
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