Are you looking to put down roots in The Garden State? Do you want to find your first home to call your own? Then an FHA-backed mortgage could be the perfect solution for you.
As a first time home buyer, the FHA offers federally back insurance to cover your loan with your lender. This option gives your lender a little more assurance they will be able to recover their money from your loan if you default.
When you apply for an FHA loan in New Jersey, your mortgage broker will give you a budget or a loan limit that you should not exceed when purchasing your first home.
As you know, homes in New Jersey can have a wide range of prices and those prices have been going up steadily over the last few years. As a result, there are new FHA guidelines you will need to follow if you want to apply for an FHA loan.
To ensure smart lending practices, there are loan limits for FHA loans in New Jersey. The maximum limits range from county to county and change from year to year.
New FHA guidelines
Since the guidelines change from year to year, it is vital to stay informed of any updates in your area. The FHA guidelines for 2020 can be found on the HUD website.
The U.S. Department of Housing and Urban Development governs the FHA insured financing program. According to the HUD website, the nationwide range for mortgage limits are $331,760 to $765,600. Here in New Jersey, 12 of our 21 counties list $765,600 as their max FHA loan amounts.
These new FHA guidelines loan limits offer a slight increase in 2020 as compared to the max loan limits from 2019. As home prices go up, so too will the loan limits to keep up with the markets.
So, if you are a first-time homeowner and want to apply for an FHA loan, then talk to your mortgage broker to see if you qualify.
FHA Loan Requirements for New Jersey
Knowing how to get an FHA loan can be tricky. However, if you know where to find the information you need, then you will be a new first-time home buyer in no time.
While lenders want to make sure the loan limits still allow you to be able to get into the perfect home for you and your family, they still need to put some requirements and restrictions on who can get an FHA loan and for how much.
Here are 5 of the main FHA loan requirements for New Jersey:
- You must live in the house as the primary residence.
- Your loan can’t exceed the maximum loan limits in New Jersey.
- Your debt must not exceed 43-56% of your income with the new loan.
- Your credit score must be higher than 580.
- You must have a down payment of at least 3.5% of the purchase price.
These FHA loan requirements help protect you as a new home buyer. You do not want to unknowingly commit yourself to a mortgage that is not sustainable within your budget.
If you do not currently qualify for all of these FHA loan requirements, then it is a good idea to keep working on your finances until you do. While FHA loans do tend to be easier to qualify for over traditional mortgages, you do still want to make sure you qualify for these minimum loan requirements.
A knowledgeable mortgage broker in your area will be able to help you stay within your budget and stay under the new limits for FHA loans. When you talk to your mortgage broker ask them the best course of action to ensure you meet these minimum requirements. They can help you decide if you need to focus on improving your credit score or continue saving to increase your down payment.
FHA loan limits for New Jersey
While the federally backed insurance for your first-time home mortgage is incredibly helpful for first-time buyers, there are some strict loan limits to help protect buyers.
FHA insured loans offer first time home buyers the chance at purchasing a home due to the much lower down payments required versus traditional mortgages. However, since most FHA loans are meant for those with less than stellar credit and tighter budgets, it is important to remember the max FHA loan amounts.
Due to the varying costs of homes in New Jersey, there are varying maximum loan limits.
For example, you will not need as much money to buy your first home in Cumberland as you would in East Newark. Therefore, the limits set by HUD are not uniform nationally or state-wide. Each county has its own FHA loan limits.
As a first-time homebuyer, the mortgage process can be confusing. A realtor might try to sell you more home than you need. However, with the right information and a knowledgeable mortgage broker, you can protect yourself from taking on too big of a loan.
FHA loan limits also protect you from taking on too big of a mortgage in your first home.
Get Your FHA Loan in New Jersey Today
Buying your first home can be exciting. You are putting down roots and making a house a home. Unfortunately, navigating the financing process can be daunting.
FHA loans in New Jersey do not have to be confusing. If you know where to find the most current information regarding the new FHA guidelines, then you too can take advantage of this helpful program assisting first time home buyers.
If you have more questions, reach out to the experts at 7th Level Mortgage. We would love to help get you in your first new home.
From FHA loans in Florida to Maryland, and of course New Jersey, here at 7th Level, we can help get your one step closer to holding those keys to your first home in your hands.
7th Level Mortgage is a leading one-stop mortgage company providing deeply informed, custom-tailored assistance with every phase of each mortgage transaction. If you are searching for a home loan in New Jersey, Pennsylvania, Delaware, Maryland, New York, or Florida, please contact us today so that we can determine the best Mortgage Lender to place your loan with and get you the best possible rate and program.