Buying Your First NJ Home: 7 Important Things to Know
Introduction
Hey there New Jersey resident or recent newcomer. New Jersey is one of the most beautiful states in the country, and you’re doing yourself a service by living here. Buying your first NJ home will be one of the most significant milestones of your life, but it will also be one of the most challenging.
If you feel yourself asking too many questions, don’t be alarmed — you should be! A lot goes into buying a new home, and it’s easy to be blindsided after it’s already too late.
Not to worry — by reading this post, you’re showing determination to avoid common pitfalls and land yourself in the home of your dreams. We’ve got your back. Follow this advice, and we’ll make sure you don’t end up like Tom Hanks in The Money Pit:
1. Don’t Underestimate the Costs of Homeownership
When buying your first NJ home, you’ll want to consider that New Jersey isn’t cheap, and neither is homeownership. If you’re leasing, you can call a landlord when things break, and a good landlord will have your problem fixed promptly. That’s not the case with homeownership.
When you own a home, you’re responsible for everything that goes wrong. Calling an outside contractor to do minor repairs can become unexpectedly costly. So, it’s best to either have a lot of extra money or be inclined towards self-repairs.
Some of the most costly home repairs include foundations, roofs, water heaters, termite damage, water damage, and piping. So, make sure you pay attention to those when you’re deciding on your home.
2. Accurately Assess Renovations and Repairs
When buying your first NJ home, it’s easy to see all the great things you love and ignore the small things that can be fixed later. This is a huge mistake, and don’t forget it.
If you see something wrong, you need to do one of two things: make sure you can afford to fix it after closing or get the seller to fix it before closing. This can be a difficult decision in a seller’s market because you’re worried you’ll lose the home to a more lenient potential buyer.
But houses are always coming on the market, and you don’t want to end up with a problem you can’t afford later on. If you decide to fix the problem, make sure you know exactly how much it will cost.
If you’re a passive person who naturally avoids arguments, ensure you have someone in your corner fighting for you. Usually, a spouse or other family member is the best person to have fighting in your corner. However, sometimes they’re not in the best position to do so.
The most surefire approach to making sure things go your way when buying your first NJ home is having someone you trust who understands the market — a licensed realtor.
3. Choose a Good Realtor
On the face of it, a real estate transaction seems simple. You find a house for sale, offer the owner money, and if they agree, the house is yours. But regardless of how it may seem on the surface, a real estate transaction is a complex process with many moving pieces.
This includes attorneys, lenders, contracts, disclosures, deposits, commissions, inspections, paperwork, and anything else you can think of. Do yourself a big favor and find a trusted professional to help you through the process.
In addition to their expert industry knowledge, real estate agents have access to listings of houses the public can’t see. So, if they know your budget and interests, they can show you everything that meets your criteria in the area you’re aiming for.
Finding the right agent is the most crucial step when buying your first NJ home. A good agent will stand in your corner and provide the information you need to make well-informed decisions.
4. Choose the Best Mortgage Lender
In most cases, your realtor will guide you to a professional mortgage lender, and you should listen to their advice. You need a suitable lender who will get you the best rates possible and have the knowledge and experience to get you through sticky situations.
A suitable lender will have integrity, professionalism, and excellent communication skills. They will want to learn everything about you to get you the best deals. They can also explain complex things to you in a language you understand.
Therefore, having a trusted lender is essential to the home buying process. If you trust your realtor, then trust their recommendation.
5. Choose the Right Mortgage Type
There are lots of different types of mortgages out there. Are you a veteran? Are you disabled? How much of a down payment can you afford? These are only some of the questions you’ll need to answer to determine the right mortgage for you.
The types of mortgages available to you will be dependent on your circumstances and can be provided to you by your mortgage lender. This section gives you a brief overview of the most common mortgage types, but you will want to talk to a professional to obtain more detailed information.
Here are the most common mortgage types in the United States:
- Conventional: Loans not backed by the government
- Fixed-Rate: The annual percentage rate is fixed over the life of the loan (Typically, 15 or 30 years)
- Adjustable-Rate: A Loan with a periodically adjustable rate over the life of the loan
- FHA Loans: Government-backed loans designed for people of more modest means
- USDA Loans: Loans provided by the Department of Agriculture for people in rural and some suburban areas
- VA Loans: Loans provided by the Department of Veteran Affairs for qualifying military members and veterans
Jumbo Loans: Loans offered to buyers of expensive homes over a certain dollar amount
6. Make an Adequate Down Payment
A down payment gives you more substantial negotiating power and gives the seller confidence that a deal with you is secure. If you’re serious about buying, you should be serious about your down payment.
20% is the ideal down payment for most loan types and lenders. If you can reasonably put 20% down on your home, you should do it. But, of course, we don’t live in an ideal world, and most new home buyers don’t have that kind of cash. But that’s okay because mortgage lenders don’t require it.
How much money you pay upfront when buying your first NJ home will affect the size of your monthly payments and, in some cases, whether you’ll need Private Mortgage Insurance.
Again, you’ll want to discuss this with your lender for their expert opinion, as different types of mortgages have varying stipulations.
7. Do Not Wave the Home Inspection
Many homeowners waive their right to a home inspection because they believe it will help speed up the deal. This is preferential to the seller because home inspectors can find hidden defects, causing the seller to pay for repairs out of pocket or giving the buyer the option to get out of the deal.
Therefore, the home inspection isn’t in the seller’s best interest; it’s in yours — the buyer. When buying your first NJ home, don’t forget this step’s importance and do the right thing for you.
A home inspection will only cost you around a few hundred dollars, but you will gain peace of mind about likely one of the largest financial transactions you’ve ever made in your life.
A home inspection can uncover structural and safety issues and forecast future home expenses. So, don’t let anyone convince you it’s a good idea to skip it when you now know that it’s not.
Go on the internet and find a well-reviewed inspector with no stake in the matter.
Conclusion
When buying your first NJ home, you can land the home of your dreams if you are patient and follow a good process. A great home isn’t going to fall into your lap, and you’ll need all the help you can get to make sure it goes smoothly.
Close your eyes and imagine yourself in the house you dream of living in. Now, fill in all the blanks that need to be filled to get you there. This process is known as forward-pacing, which is the best way to get you where you want to go.
We hope you land in your dream house soon, and we are here to assist you in any way you need. If you have any questions, contact us by visiting our website by clicking here.
