New Jersey Mortgage Rates

Living in New Jersey

With easy access to both New York City and Philadelphia, New Jersey has long played host to a bustling commuter life. Meanwhile, the state can claim plenty of amenities of its own, like a popular shoreline, recreational options on the Delaware River and a robust farm-to-table community.

New Jersey’s residential real estate market is now a seller’s market. Inventory levels for single-family homes, townhouses and condos have fallen since 2011, according to a recent monthly report from New Jersey Realtors. This has left remaining inventory selling at higher median prices.

In March, the median sales price of a single-family home in New Jersey was $305,000, up 5.2% from the year before. Prices grew in February and January, too, up 8.6% and 4.7%, respectively, from the previous year. Over the past year, home sales in New Jersey have reined in about 97% of their list prices.

According to Karen Dinkins, a realtor with Realty Executives in Fairfield, demand is still being driven by New York City professionals looking for greater value for their budgets.

Rising sea levels and tidal flooding have eroded home values in certain parts of New Jersey. A recent report from First Street Foundation found the state had the second-greatest loss in values due to coastal flooding between 2005 and 2017, losing $4.5 billion. In 2018, New Jersey also had the largest percentage of residents moving out of state, mostly because of job changes or retirement, according to a recent study by United Van Lines.

Despite the outward migration and loss in property values, New Jersey’s recent housing run shows signs of continuing. As of April, 6.5% fewer single-family homes were for sale compared to the year before. Meanwhile, homes stayed on the market just 75 days, a little more than half as long as they did in 2011.

The rules and costs of buying a home in New Jersey

As in most states, shoppers in New Jersey need to be aware of regulations that govern homebuying and the real estate taxes they may have to pay.

Home seller and buyer laws

Real estate property disclosure forms: New Jersey courts generally support a buyer’s right to know about a home’s current condition and its defects, and sellers can fill out a property condition disclosure statement. The statement asks sellers to record the current condition of the home, from the state of the roof, to the attic, basement and crawl spaces. They can also record any structural changes they made to the home, such as adding a new roof, electrical work or plumbing.

For new construction in New Jersey, state law is more specific. It requires anyone who owns, leases or maintains a property that might affect nearby home values, such as a contaminated site, to file a list of so-called off-site conditions at a local municipal clerk’s office.

Judicial foreclosure state: A foreclosure can deal a financial — and emotional — blow to homeowners, so it helps to know what to expect during the process. New Jersey is a judicial foreclosure state, which means if a homeowner defaults on a mortgage, the lender must go to court to start the process of repossessing the home.

Equitable distribution: In so-called common law states, divorcing couples are required to split all assets — including real estate — equally. New Jersey, however, is an equitable distribution state, which means a court will oversee the distribution process to ensure assets are split fairly, even if this means an unequal split.

Attorney vs. escrow state: Some states mandate that buyers and sellers hire attorneys to oversee real estate transactions, such as closings, while others allow for an escrow process, which means transactions can be handled by other agents, such as escrow companies or title companies. New Jersey allows for both. In the northern part of the state, especially around New York City, attorneys usually oversee home sales, while the escrow process prevails in the southern part of the state and around Philadelphia. According to realtor Karen Dinkins, some investors prefer title companies because they offer a more streamlined process.


Real estate transfer taxes: In New Jersey, sellers are generally responsible for paying real estate transfer taxes, unless the buyer explicitly agrees to pay that fee or is purchasing a newly constructed property from a builder, says Seth Daniels, a regional branch manager for American Financial Network, whose headquarters are in Brea, Calif.

The New Jersey Division of Taxation sets the transfer tax rate according to a sliding scale based on the property’s sale price. For homes up to $350,000, the rate ranges from $2 to $3.90 for every $500 of the sale price. The real estate transfer tax can vary if a seller meets certain conditions; for example, if they’re over 62, blind or disabled, or if the property is considered to be low- to moderate-income housing. Buyers who purchase properties valued at $1 million or more pay a transfer tax of 1%, said Eliane Russotti, an attorney based in Rutherford, NJ.

Property tax exemptions: New Jersey offers an array of property tax deductions for disabled persons, disabled veterans, seniors over 65 and surviving spouses. For disabled veterans, a full property tax exemption on the home and lot is available to qualifying applicants. Seniors and disabled people, meanwhile, can deduct $250 annually from their property taxes. For more information, see this from the New Jersey Department of the Treasury.

Typical property taxes: If you are looking to buy a home in New Jersey, budget for a sizeable property tax bill. The state’s proximity to New York City means property values tend to be higher, and many towns lack the commercial businesses they need to keep taxes in check, so most of the property tax burden falls on homeowners, says Brenda McKoy, a realtor associate with Keller Williams Valley Realty, headquartered in Woodcliff Lake, NJ.

In New Jersey, the median property tax is now is $6,579, based on a home that has a value of $348,300. The overall tax rate is 1.89% of a home’s assessed market value. Meanwhile, the percentage of tax based on income is 7.45%. Both rates are the highest in the country, according to

Conforming loan limits

Conforming loans are mortgages that are insured by Fannie Mae and Freddie Mac, the government-sponsored companies that set conforming loan limits to help make mortgages more affordable, especially to consumers who have good credit.

The maximum loan amounts that borrowers can receive with a conforming loan vary according to county and whether they own a single- or multi-family home (up to four units). In New Jersey, the current conforming loan limit for about half the state’s counties is $484,350, and it is $726,525 for counties where home prices trend higher. To find the limit for the area where you are considering buying, go to this conforming loan site from the Federal Housing Finance Agency.

Programs for homebuyers in New Jersey

Even if you do a superb job staying on top of your financial assets and responsibilities, you may still need help buying a home. Luckily, the New Jersey Housing and Mortgage Finance Agency (NJHMFA) offers several programs that may help you receive a more affordable mortgage and possibly assistance with down payment and closing costs. Read on for more details, and check the agency’s information site.

First-Time Homebuyer Mortgage Program

This mortgage program offers first-time buyers a chance to qualify for a more affordable, 30-year, fixed-rate, government-insured loan.

Who qualifies:

  • First-time homebuyers with a credit score of 620 or higher
  • Buyers who plan to use the property as a primary residence
  • Buyers who can meet income and purchase price limits (different limits apply if you’re buying in a federally designated target area)


Police and Firemen’s Retirement System Mortgage

This loan program is open to qualified, active members of the New Jersey Police and Firemen’s Retirement System (PFRS). The mortgages can be used to buy a first home, trade up or refinance an existing mortgage.

Who qualifies:

  • NJPFRS members with at least one year of creditable service
  • Buyers planning to buy a home for less than $453,100


Down Payment Assistance Program

This program provides help with down payment and closing costs in the form of a forgivable, five-year, interest-free loan when it’s paired with a primary mortgage from NJHMFA. The loan is for $10,000.

Who qualifies:

  • First-time homebuyers who have a credit score of 620 or more
  • Buyers who pair the loan with an NJHMFA first mortgage loan
  • Buyers who comply with the same income and purchase price limits as with their first mortgage

New Jersey Citizen Action also offers a range of counseling services that may help homeowners, like those trying to save up for a mortgage or avoid foreclosure.

Rate shopping tips

Your mortgage shopping process will most likely mean many rounds of research. Here are tips for saving both time and money:

Contact at least three lenders on the same day.

Mortgage rates fluctuate daily, so when researching rates, assemble quotes from your target lenders on the same day. Reach out to at least three different institutions to give yourself a broad enough sample of what is available in the industry; this can include both larger and smaller lenders, as well as credit unions.

Give each lender the same information.

Loan officers are required to provide you with a loan estimate if you provide them with the right information. The Consumer Financial Protection Bureau suggests you have the following information ready:

  • Your income
  • Social Security number (so the lender can pull a credit report)
  • The address of the property you hope to buy
  • The property’s estimated value
  • The mortgage amount you may need
  • The type of mortgage you are considering (e.g., fixed- or adjustable-rate, for a single or multi-family home, etc.)


Add up all lender fees to confirm your total loan amount.

Mortgages involve more than just the loan. Research all potential fees and costs, so you can choose the rate that works for you. Here are some of the most common costs and fees:

  • Appraisal
  • Home inspection
  • Lender’s title insurance
  • Owner’s title insurance
  • Homeowners insurance premium
  • Mortgage insurance premium


Know when to lock in the rate.

In a market where rates typically change daily, work with your lender to understand what you can afford, and see if you can lock in a desirable rate if rates go up. Rate locks are usually good for 30 to 60 days. Because the residential real estate market in New Jersey is now a seller’s market, it’s wise to see if you can be preapproved for a mortgage early in the shopping process. Some lenders let buyers lock in a rate as soon as they receive preapproval.

The information in this article is accurate as of the date of publishing.