New Jersey Mortgage and Refinance Rates
On Saturday, June 10, 2023, the national average 30-year fixed mortgage APR is 7.08%. The national average 30-year fixed refinance APR is 7.18%, according to Bankrate's latest survey of the nation's largest mortgage lenders.
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Current mortgage rates in New Jersey
As of Saturday, June 10, 2023, current interest rates in New Jersey are 6.97% for a 30-year fixed mortgage and 6.34% for a 15-year fixed mortgage.
As the nation’s most densely populated state, New Jersey has a large mortgage market, and you can expect home prices to trend generally higher than the national averages. The state’s proximity to two pricey Northeastern cities — New York City and Philadelphia — keeps demand for housing strong.
The median price of single-family homes sold in New Jersey in March 2023 was $455,000, up 3.4 percent from the previous year, according to the New Jersey Realtors.
Even in a hot housing market, lenders are tightening credit, so New Jersey buyers should make sure to get preapproved for a mortgage before they begin shopping.
Refinance rates in New Jersey
New Jersey borrowers who saw their home equity rise during the pandemic might be interested in refinancing their mortgage as a way to tap those funds. Check out Bankrate’s guide to cash-out refinancing to learn more.
How to find the best mortgage rate in New Jersey for you
When shopping for a mortgage, compare at least three loan offers — research shows this exercise can save you thousands of dollars over the life of a loan.
Bankrate can help you find the best mortgage deal. Here are some basic steps to securing a loan with favorable terms:
Step 1: Strengthen your credit score
Long before you start looking for a mortgage lender or applying for a loan, give your finances a checkup, and improve your standing if needed. This means pulling your credit score and credit reports. You’re entitled to a free credit report from each of the three main reporting bureaus (Experian, Equifax and TransUnion), which you can get through AnnualCreditReport.com.
Step 2: Determine your budget
To find the right mortgage, you’ll need a good handle on how much house you can afford. That’s because a lender could qualify you for more mortgage than you need, or one that would max out your budget and leave no room for unexpected expenses.
Step 3: Know your mortgage options
There are a few different types of mortgages. Many lenders offer conventional loans that require as little as 3 percent down. FHA loans also have a low down payment threshold, while VA loans (for veterans) and USDA loans (for borrowers in rural areas) have no down payment requirement. If you’re in the market for a jumbo loan, check New Jersey’s county-by-county loan limits.
Step 4: Compare rates and terms from several lenders
Don’t settle on the first lender you talk to — rate-shop with at least three different banks or mortgage companies. You can look to your bank or other banks, credit unions, online lenders and local independents to ensure you’re getting the best deal on rates, fees and terms.
Step 5: Get preapproved for a mortgage
As you comparison-shop, keep in mind that getting a mortgage preapproval is the only way to get accurate loan pricing for your specific situation.
Mortgage options in New Jersey
If you’re looking to get a mortgage in New Jersey, there are several options:
- New Jersey conventional mortgages: To qualify for a conventional mortgage, you’ll need a minimum credit score of 620 and a debt-to-income (DTI) ratio no more than 45 percent. If you make a down payment of less than 20 percent, you’ll need to pay private mortgage insurance (PMI) premiums, as well.
- New Jersey FHA loans: If your credit history disqualifies you from a conventional mortgage, you might be able to obtain a loan insured by the Federal Housing Administration (FHA). If you have a down payment of at least 3.5 percent, you could qualify for this type of loan with a credit score as low as 580.
- New Jersey VA loans: If you’re a veteran or active-duty member of the military, you might qualify for a mortgage backed by the Department of Veterans Affairs (VA). A VA loan doesn’t require a down payment or mortgage insurance, but you do need to pay a funding fee, which starts at 2.15 percent for homebuyers.
First-time homebuyer programs in New Jersey
First-time homebuyers in New Jersey can take advantage of several programs offered through the New Jersey Housing and Mortgage Finance Agency (NJHMFA). These provide down payment assistance and affordable, government-backed mortgages:
- NJHMFA's First-Time Homebuyer Mortgage Program: If you’re buying a primary residence in New Jersey and haven’t owned a home for at least three years, you might be eligible for this type of mortgage. Qualified buyers who meet income and purchase price restrictions can get a competitive interest rate on a 30-year, fixed-rate mortgage through an NJHMFA participating lender. The mortgage comes with government-backed insurance. Properties in certain neighborhoods, called Urban Target Areas or UTAs, have higher income limits.
- NJHMFA Down Payment Assistance Program: This program can provide $10,000 to use for a down payment or closing costs. It is structured as an interest-free second loan with no monthly payment, and it is usually forgiven after five years. The down payment assistance must be paired with an NJHMFA first mortgage. To qualify, homebuyers need to meet household income restrictions and purchase price limits.
- Police and Firemen's Retirement System Mortgage Program: Police officers and firefighters who are members of the New Jersey Police and Firemen's Retirement System (PFRS) may be eligible for competitive mortgages and refinancing loans through this program. You don't need to be a first-time homebuyer to qualify. The purchased property must be your primary residence, and the loans can be used for one- or two-family residences and condos.