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Tips on Buying a Home in New Jersey

There are a number of wonderful homes available in New Jersey, and many are now available at prices that are far below their original cost. It is a major temptation for many to buy one of these homes in the spirit of “getting a good deal”, but it is still important to prepare yourself before actually making a purchase.

Do Your Research

Never count on a home seller to give you a call with an offer to buy a maintenance-free home that comes along with wonderful mortgage. You must have to find the gems yourself! The American Dream can only be discovered by reading available materials, talking to friends and experts, and spending time looking at different homes, schools, and neighborhoods.

Make a Plan and Get Pre-Qualified

Everyone knows that an important decision needs to be clearly thought out. First and foremost planning your actions in your purchasing process and getting pre-qualified will be easier by allowing yourself to take advantage of opportunities pre-qualification has to offer. Establishing a home purchasing plan is a good strategy that helps you focus on the important factors and organize the entire process. Loan pre-qualifying is a process developed to determine the home price affordable to your budget and showcases you as a genuine prospect to the seller. A lender typically uses the 31% formula which means your monthly mortgage can’t exceed 31% of your monthly income for approving your loan. A thought-out plan will save both time and money when buying a home in New Jersey!

Value in New Jersey

The days of 10-30% annual appreciation are long gone. Homebuyers in the 1970’s highly benefited from exceptional home prices. In today’s world, we are facing slow growth while guarding against the possibilities of skyrocketing ARM rates, falling prices, and corporate layoffs that can affect your home’s value. The golden rule of buying the defective house in the best neighborhood still applies. If you are open to buying a home that needs improvement, you can affectively customize the home that fits your needs. “Make money buying a home, not selling one,” is an accurate saying that still applies and a key point to keep in mind in the long-term of the purchasing price.

Create a Top 10 List of Amenities

Establishing a “prototype” early on will save time shopping for unsatisfactory homes and may keep you from buying the first home you see. When shopping for a home in New Jersey, list the details that are most important to you for your home, such as fireplace, fenced-in yard, new appliances, etc. As noted in bullet #3, your top reason for buying a home should be the value you are getting. Some of your top amenities should be sacrificed if an incredible value is available.

Fixed vs. Adjustable New Jersey Rate Mortgages

Fixed vs. Adjustable New Jersey Rate Mortgages Adjustable rate mortgages are typically 30 year loans that are initially fixed for a number of years.  The typical ARMs have rates that are fixed for 5, 7, or 10 years and then adjust each year after according to the market.

Typically the initial fixed New Jersey rate on an ARM is slightly lower than the comparable rate of a fixed New Jersey rate mortgage. Fixed New Jersey rate mortgages allow buyers to take out a long term loan without having to worry about changing interest rates or monthly payments. An ARM loan is useful and can save you a lot of money in interest in certain cases where you may not live in the property longer that the initial fixed rate period.  They actually have become popular again due to all time low interest rates although most will be best served by fixed loan programs if they are not certain about how long they plan on staying in the New Jersey home.

When settling for a final loan choice, make sure that you pierce all the closing costs. Many New Jersey mortgages require a mortgage escrow account and private mortgage insurance make sure you understand the terms and cancellation procedures before proceeding. Also, make sure there are no prepayment penalties so that you can utilize an accelerated mortgage plan. A good mortgage reduction plan can save you tens of thousands in interest costs, and shorten your loan term, with only small extra principal payments. Finally keep in mind that if you experience negative changes in your job, health, or marital status, you can revert to the standard payments in your mortgage contract.

Sign a Contract That Protects You

Ensure a contract on your New Jersey home that allows you to organize financing, inspect the home and negotiate any problems that you may encounter in the long run. Assure that the contract you sign will diminish potential legal battles. Look forward in swimming in your new pool with your family and neighbors instead of swimming with crooks and sharks.

Put Yourself in the Seller’s Shoes

You are about to make one of the most important decisions of your life that not only affects you but the seller too. A deeper understanding of the seller may help you in deciding whether and for how much to buy a particular home. Speak to the seller and take time to understand the reasons the seller bought the home and made the renovations to the home. This puts you in a better position to evaluate the home and negotiate a better deal. Overall, the home buying process excludes the home specialist and the only two parties left are the seller and buyer.

Develop a Mortgage Shopping Chart

Another huge decision you are faced with before putting a contract on a home is how to finance the purchase. The days of simply walking into the community bank and negotiating with the loan department manager are over. There are 10,000 lenders competing for your mortgage business. We live in the technology millennium; you can apply for a loan over the Internet or use a mortgage broker to shop for the loan that best fits you from hundreds of lenders. When choosing a lender, you should create a chart that lists different types of loans, fees, and at least five mortgage providers (including a mortgage broker). You want to avoid apples to oranges contrasts by comparing fixed rates to fixed rates, not fixed to ARM’s.

Get a Quality Home Inspection

People pay for inspections before buying used cars than when making the biggest investment of their lives such as their homes. Paying for a qualified home inspection before you buy it’s ideal for anyone who doesn’t want to spend thousands of dollars for repairs in the long run.

Home Protection Plans

A home warranty, or home protection plan, is a service contract, usually running for one year, which protects homeowners against the cost of unexpected repairs or replacement of their major systems and appliances that break down due to normal wear and tear. The warranty covers mechanical breakdowns, while insurance typically repairs the related damage, this is a negotiable contract between the buyers and sellers which does not overlap or replace homeowner’s insurance policy. This warranty can save the new homeowner stress, as well as put seller’s fears to rest..

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