What a First-Time Homebuyer Needs to Know About Buying a Home in New Jersey
With its beautiful neighborhoods and unique attractions, New Jersey has become a popular state among many homebuyers looking to settle down and raise a family. Buying a home for the first time is nothing to take lightly; therefore, it is important to know all the facts, particularly when it comes to the market. Check out these helpful tips for first-time homebuyers purchasing a home in the Garden State.
Know what you can afford before you start looking
Because a home is such a large investment, you should know what you can afford both in terms of the mortgage and the down payment. Come up with a budget before you even start house hunting; that way, you and your partner can realistically build a “wishlist” that fits into your price range. For some first time homebuyers, a 20% down payment might be the suggested amount; however, putting down as little as 3% is also acceptable. To ensure you have enough money to do this, here are a few savings suggestions:
- Set aside tax refunds and work bonuses: It might seem tempting to use that April tax return for some nice new clothes or a new gaming system, but saving that extra money for a future investment like a new home is a smarter decision. Your future self will thank you!
- Set up automatic savings to be deducted from your checking account: Many savings apps are now available online and on mobile devices to help you put money aside for future investments. Take advantage of what is out there and label your investments so that you know what your savings are going towards.
Take advantage of down payment and mortgage options New Jersey has to offer
Fortunately, many states--including New Jersey--have down payment and mortgage assistance plans for first-time homebuyers:
- Conventional Mortgages → Through government sponsored mortgage assistance programs, homebuyers may be granted a lower down payment percentage to make for easier financing
- Federal Housing Administration (FHA) Loan- AN FHA loan can assist in lowering mortgage payment to fulfill the needs of a particular budget
- VA Loans- A loan for military veterans from the Department of Veterans Affairs can often lower down payment and mortgage costs or sometimes require no down payment at all
- USDA loans- offers a zero-down payment mortgage to buyers with a lower income
Do your research on the neighborhood you’re considering moving to
A first-time homebuyer shouldn’t just settle for first home or neighborhood they fall in love with. Allow yourself the chance to explore! Become a mini detective in the neighborhood and home you’re looking to buy and know the ins and outs of the community.
- Take pictures: If you take advantage of some open houses in the neighborhood, be sure to snap some photos. These pictures will come in handy later when you are remembering parts of the home you enjoyed as well as aspects of the neighborhood like that nice dog park or the cute 24 hour diner on the corner.
- Look at local safety and crime rates: Safety first when it comes to purchasing a new home. Don’t be afraid to ask your real estate agent about crime and safety in the area and to provide you with resources showcasing statistics for the neighborhood. Last thing you want is a new home in an unsafe neighborhood!
- Know important landmarks: When you are deciding on a new home, be sure to cruise around the neighborhood and determine how far important places like schools, hospitals, grocery stores, etc. are in comparison to where your prospective home is located. It is important to be close to amenities when you need them.