New Jersey Mortgage Calculator | Ascension
New Jersey Real Estate Market
New Jersey has one of the most expensive housing markets in the United States, with a median home value of $ 342,527, almost 38% higher than the US average (Zillow). However, median home prices vary widely within the state. Cities in the New York metropolitan area are among the most expensive housing markets in the country. Houses along the coast also tend to be more expensive.
That considered, an average home in New Jersey costs $ 194 per square foot. Depending on your particular needs, you can use it to get an idea of how much your house could cost. You can also use our New Jersey mortgage calculator to estimate monthly mortgage payments for different mortgage sizes.
If you are looking for a home in New Jersey, be sure to check current New Jersey mortgage rates, as your mortgage rate has a significant impact on the total cost of your mortgage.
The New Jersey housing market is less healthy than that of the typical US state by a few key indicators. About 10.5% of New Jersey homeowners have negative equity in their properties (are “underwater”), compared to the US average of 8.2%. And 1.9% of New Jersey homeowners are behind on their mortgage. This is significantly higher than the average of 1.1% in the United States.
How do I calculate my mortgage payment?
Your monthly mortgage payment is made up of the interest paid to your lender and a portion of the principal you owe. You will likely have to pay some other expenses that we will discuss later in this section in addition to your monthly mortgage payment. However, the principal and interest (P + I) you pay each month is your actual mortgage payment. This is one of the many reasons why it is important to know current mortgage rates when shopping for a lender.
There are three main factors that determine your payout:
How much you borrow: The most obvious and simplest factor in your mortgage payment is how much you are borrowing to buy your home. It depends on the price you pay for the house and how much you put down. This is the only one of the three factors that has a linear relationship to your mortgage payment – in other words, your payment on a $ 400,000 mortgage will be exactly double the payment on a $ 200,000 loan, all others. factors being equal.
Interest rate: Lenders charge interest when they lend money, based on the borrower’s perceived credit risk. Your mortgage will have an interest rate. This rate is the amount of interest you will pay, expressed on an annualized basis. For example, a mortgage of $ 200,000 at 5% interest will initially earn interest at the rate of $ 10,000 per year. But here’s where it gets mathematically complex: Each month, a portion of your mortgage payment reduces the principal you owe and, therefore, the amount of interest that accumulates before your next payment is due. Over time, the amount of your payment that goes to interest will gradually decrease and the amount applied to your principal balance will gradually increase. This is the basic idea behind the mathematical concept called mortgage amortization. The credit rating required for a home loan varies by lender, but if your credit rating is good, you will likely benefit from a lower interest rate.
Repayment period: If you are deciding between a 15 or 30 year mortgage, there are a few things to consider. First, your monthly payment on a 30-year mortgage will be less than your monthly payment if you choose a 15-year mortgage. But thanks to the mathematical complexities of amortization, it’s not a linear relationship – the 15-year payment won’t be exactly double the 30-year payment.
All of these factors are factored into our New Jersey mortgage calculator above.
The mortgage payment formula
Determining a mortgage payment can be mathematically complex. That’s why we provide this handy New Jersey Mortgage Calculator that does the hard work for you.
If you insist on calculating your mortgage payment by hand, here is the mathematical formula to do it:
For example, let’s say you borrow $ 300,000 to buy a house and get a 30 year (360 month) mortgage at an interest rate of 3.5%. Here’s how it works (and don’t forget to convert the interest rate to a decimal):
Your actual monthly payment will likely be much higher, especially in New Jersey
Your mortgage payment of principal and interest doesn’t say everything about your income Actually will pay every month. Most mortgage lenders require borrowers to pay a monthly share of their property taxes and risk insurance with their mortgage payment. And if the property is located in a community with a Homeowners Association (HOA), you may need to pay the monthly dues to your lender, who will then pay them on your behalf.
And if you put less than 20% down when you got your loan, you will likely have to pay for private mortgage insurance, or PMI. You will also send it with your monthly payment.
This is especially important to know before buying a home in New Jersey. Unfortunately, the Garden State has the highest property tax rates in the United States. We will discuss the specifics of New Jersey property taxes in the next section. Just remember that there are many different things included in monthly mortgage fees, and your monthly payment is likely to be considerably more than the principal plus interest you owe.
Fortunately, our New Jersey mortgage calculator lets you factor in these expenses. You will notice text that says “show additional entries” below the main input boxes of the calculator. If you click on it, you can add your taxes, insurance, and HOA dues to the payment.
What to Know Before Buying a Home in New Jersey
New Jersey is one of the most expensive real estate markets in the United States. Additionally, New Jersey’s property taxes are among the highest in the country. According to data from the US Census Bureau, the average New Jersey homeowner pays 2.13% of their home’s value in property taxes each year. This is more than double the national average. This means that the median property tax bill in New Jersey is around $ 7,300.
Also, if you live near the coast (excuse me – the “shore”) or in a low area, you may need to purchase flood insurance. And even if you are not obligatory to get this done through your lender, you may want to consider purchasing flood insurance anyway. It is important to note that all Home insurance policies specifically exclude water damage caused by flooding. Buying flood insurance could save you from financial disaster in the future. Remember to add the cost of flood insurance when using our NJ mortgage calculator to get the most accurate estimate of your monthly mortgage payments.
Tips for First-Time Home Buyers in New Jersey
New Jersey has programs to help residents become homeowners. Here is an overview of the two main programs, along with links to learn more:
- The NJHMFA Down Payment Assistance Program offers repayable assistance of $ 10,000 to qualified first-time homebuyers. These funds are intended for the down payment and closing costs.
- The New Jersey Housing and Mortgage Finance Agency (NJHMFA) First-Time Home Buyers Mortgage Program provides low- to moderate-income first-time homebuyers with government-insured mortgages through a network of participating lenders. Home buyers can use this program and down payment assistance.
It should also be mentioned that there are many types of mortgage loans. A loan specially designed for first-time buyers may not be right for you. So it’s a good idea to take a look at our guide to home loans to familiarize yourself with what’s available.