Buying a Home in New Jersey with Down Payment Assistance and FHA
FHA loans are excellent options for New Jersey residents looking to finance a new home. These loans are given by FHA approved lenders to borrowers across the state to allow them a loan option that provides affordable interest rates, low down payments, potentially covered closing costs, and the benefits of mortgage insurance. The down payment rates associated with FHA loans are some of the most attractive aspects of these loans to prospective New Jersey home buyers, as they can be as low as 3.5% of the total cost of the loan. Also, because these loans are insured by the FHA, lenders are more willing to take chances on borrowers who may have lower credit or no credit, as their investment is protected from losses due to borrower defaulting.
FHA loans in the state of New Jersey will have limits, however, and home buyers looking to purchase a home with a FHA loan should always first investigate what the loan limits in their desired areas are. The limits will vary greatly depending on the average home prices found within different counties of New Jersey, and lower income regions will have the lowest limits, while higher income regions will have limits that meet the demands of the area.
In high income regions such as Bergen, Essex, or Monmouth Counties, loan limits for FHA loans are expected to be as high as $578,000 for the year 2014, as this set limit best reflects the median price range of homes within these areas. In lower income regions like Warren or Mercer County, a FHA loan limit may only be as high as $210,000 to $212,000 to reflect the median prices of these areas.
These loan limits will still allow prospective home buyers of the state of New Jersey the ability to find a suitable residence that is able to be covered by a FHA loan, as these limits are based on average home prices. While these loan limits vary by county, they will also vary by year, and it is best that home buyers research for the year they plan to purchase their home as limits will often change on a yearly basis. These changes are due to the natural fluctuations within the housing market, as the FHA wants their loan limits to best reflect the current state of home buying in various New Jersey regions.
First Time Home Buying in New Jersey:
Guide for First Time Home Buyers in New Jersey
If you have questions about the financial aspects of homeownership, call the HMFA's hotline at 1-800-NJ-HOUSE (1-800-654-6873)