Few things in life are as exciting as buying a home. But before purchasing real estate in New Jersey, take note of these crucial pointers first:
What’s your credit score?
To get the best rates on your mortgage, you need to have a good credit score.m What’s a good credit score? According to Experian, “for a score with a range between 300-850, a credit score of 700 or above is generally considered good.” New Jersey and federal law entitles you to get one free credit report each from Equifax, Experian, and TransUnion annually. Get this as early as possible so you can check if your report contains errors that might be negatively affecting your score.
Research your lender
In the same way that your lender will be determining your creditworthiness, you should also check your lender’s legitimacy. First of all, find out the true identity of the lender – this will help you determine if they are a licensed lender or just a servicing company. Then ask if they are a licensed mortgage lender in the state of New Jersey. To verify, get their license number and confirm it with the Department of Banking and Insurance at www.dobi.nj.gov.
Know your rights
New Jersey laws have several provisions that protect homebuyers. For instance, the New Jersey Homeowners Security Act of 2002 (NJHOSA) prohibits lenders from charging a late fee in excess of 5% of the payment due or charging a fee when inquiring about your mortgage balance. It also offers protections for high- cost loans, such as the prohibition against so-called balloon payments and negative amortizations.
Pay attention to off-site conditions
Before purchasing a house, perform due diligence first to check the desirability of a neighborhood. Municipal clerks maintain a list of so-called off-site conditions that might affect the property values of homes in the vicinity. These may include planned constructions or even known toxic waste contamination incidents. Information like these are crucial but may not always be known (or willingly disclosed) by sellers.
Don’t forget inspection!
Real estate contracts in New Jersey are sold as-is, meaning the property must be priced to reflect its current condition. That said, local laws also allow you to bring in a licensed inspector to uncover any undisclosed deficiencies that might affect the asking price. If issues are indeed found, you can ask the seller to make repairs first or give you a credit to carry out repairs yourself. Should the seller say no, you can walk away from the deal.
Get homeowner’s insurance
As per state regulations, mortgage lenders cannot allow you to close a deal without securing homeowner’s insurance first. It’s an added expense, but it does offer invaluable protection against incidences like fire or theft. If you already have car or life insurance, ask your provider if they can bundle a home insurance policy as well. They’ll often agree to a discount for such arrangements.
As you can see, buying a home involves a lot of technicalities. If you need help navigating this complex process, call Cindy Pagnotta at 908.436.7947 or e-mail her at info(at)pagnottahomes(dotted)com.