Justin Bonura

Division Manager - New Jersey And New York Mortgage Officer NMLS#: 73184

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Helping Your Children Buy a First Home

May 22
9:00
AM
Category | Blog

From day one, parents help their children with almost everything. But sometimes even adult “children” need a helping hand. This is often the case when it comes to buying a home. Fortunately, there are several things parents can do to help their children buy a first home in New Jersey.

Common Obstacles to Homeownership

For some would-be home buyers, the financial path to buying a house can seem overwhelming at first. Qualifying for a mortgage loan. Coming up with a down payment. These things can seem like insurmountable obstacles to a first-time purchaser.

It’s common for home buyers in New Jersey to get a helping hand from their parents. Consider the evidence. A 2016 survey from the National Association of REALTORS® (NAR) found that nearly a quarter of millennial home buyers got down-payment help from a family member when buying a home. Parents were listed as the most common source of financial help.

According to the NAR report: “Overall, the median down payment ranged from 7 percent for millennial buyers to 21 percent for older boomers and the Silent Generation. Nearly a quarter (23 percent) of millennials cited a gift from a relative or friend – typically their parents – as a source of their down payment.”

How Parents Can Help Their Children Buy a Home

All of this begs the question: What can you, as a parent, do to help your child buy his or her first home in New Jersey? There are several ways ...


Pre-qualification and pre-approval are commonly used terms that relate to the mortgage process in New Jersey. And while they sound the same, they’re actually a bit different.

This short version is this: mortgage pre-approval in New Jersey is typically a more detailed and comprehensive review, when compared to a basic pre-qualification. Home buyers can benefit from pre-approval in several ways.

Pre-Qualification vs. Pre-Approval in New Jersey

These two terms have “pre” attached to them because they happen on the front end of the mortgage process — before the appraisal, before underwriting, and before the actual funding. It’s a way to get the ball rolling. But these two terms are not the same.

Here’s the basic difference between pre-qualification and pre-approval:

  • Pre-qualification is a quick review of your financial situation, often done without any kind of supporting documents or verification. The mortgage lender estimates how much you might be able to borrow, based on the financial information (income, debts, etc.) that you’ve provided.
  • Pre-approval is a more in-depth and useful process. When you get pre-approved for a mortgage loan in New Jersey, you’ll actually provide some additional documents relating to your finances. A credit check is usually performed as well. The end result is that you’ll have a more realistic, and more accurate, ...

The New Jersey real estate market has undergone many changes over the last few years, and this has many would-be home buyers asking the same questions: Is now a good time to buy a home in New Jersey? From a cost perspective, would it be better to buy in 2018 or wait until 2019?

Here’s an updated look at real estate and economic trends in the state, to help you answer these important questions.

New Jersey House Values Expected to Rise

Statewide, home prices in New Jersey have risen over the last few years. They are expected to continue rising, in most parts of the state, over the coming months. These trends are important to all home buyers, whether you end up buying a house in 2018 or 2019.

The research team at Zillow, for example, recently predicted that the median home value for New Jersey would rise by around 2.1% over the next 12 months. Granted, this is just one forecast. But the general consensus among economists and housing analysts appears to be that home prices in the state will likely continue to rise.

So, purely from a cost perspective, now might be a very good time to buy a house in New Jersey. Buyers who postpone their purchases until later in 2018, or 2019, could encounter higher housing costs.

Mortgage Rates Level Off in Spring

Mortgage rates have settled down a bit, following a steady upward climb during the first two months of the year. This is another trend that could affect many home ...


Home values in most New Jersey towns and cities rose steadily during 2017. This prompted the Federal Housing Finance Agency (FHFA) to raise the conforming loan limits for all counties in New Jersey, for 2018. So the jumbo mortgage threshold went up as well. Additionally, the Department of Housing and Urban Development (HUD) increased the limits for FHA loans in New Jersey.

2018 Conforming & VA Loan Limits for New Jersey

A conforming loan is one that meets or “conforms” to the size restrictions used by Fannie Mae and Freddie Mac, the government-sponosored corporations that buy mortgages from lenders. Veterans Affairs (VA) home loans have the same limits as conforming mortgage products, at least for 2018.

Here are the 2018 VA and conforming loan limits for all New Jersey counties:

...

Home prices in Bergen County, New Jersey rose steadily over the last couple of years. And the price growth that occurred during 2017 prompted federal housing officials to raise the FHA and conventional conforming loan limits for 2018.

In Bergen County, the FHA and conforming limit for a single-family home rose to $679,650 for 2018. The jumbo loan threshold went up as well. Anything that exceeds $679,650 is considered a jumbo mortgage product.

Recap: Know Your Mortgage Lingo

Before we go any further, we should define some of the terminology used here. Knowing these terms is the first step to understanding how loan limits work.

  • Conventional: A conventional home loan is one that is not insured or guaranteed by the federal government. This sets it apart from FHA and VA loans, which doreceive government backing. Depending on the amount being borrowed, conventional loans can either be “conforming” or “jumbo” as defined below.
  • Conforming: A conforming loan is basically a conventional mortgage product that meets the size restrictions used by Fannie Mae and Freddie Mac. These are the two government-sponosored corporations that buy mortgages from lenders. Fannie and Freddie have size limits for what they can purchase, and when a mortgage product meets these limits it is referred to as a conforming loan.
  • ...

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County 1-Unit 2-Unit 3-Unit 4-Unit
ATLANTIC $453,100 $580,150 $701,250 $871,450
BERGEN $679,650 $870,225 $1,051,875 $1,307,175
BURLINGTON $453,100 $580,150 $701,250 $871,450
CAMDEN $453,100 $580,150 $701,250