New Jersey Mortgage Calculator

Best mortgage lenders in New Jersey

The most popular mortgage lenders in New Jersey operate nationwide. These include such recognizable names as Rocket Mortgage, AmeriSave, First Citizens Bank. Several lesser known but trustworthy options include New Jersey-based Jersey Mortgage Corporation, New Jersey Mortgage Services.

How to calculate mortgage payment in New Jersey

Use our simple mortgage calculator NJ to evaluate your future monthly expenses. A comprehensive, step-by-step guide is provided below.

Why and How to Use Our Mortgage Calculator

Use our house payment calculator New Jersey for thorough planning of your future spendings. Let’s take a closer look at each field in order to gain a better understanding of the mortgage in New Jersey parameters.

The first piece of the puzzle is the home price – that is, how much you are planning to spend on your future property. A down payment is the portion of this price to be paid upfront. To avoid costly insurance, you must come up with at least a 20% down payment (in the case of a conventional loan). The remaining amount makes up the principal (e.g., 80% of the home price given a 20% down payment).

The term of the loan is the period of time to fully repay the mortgage by making scheduled payments. Fixed rate loans can last up to 30 years, while adjustable rate options usually have a shorter term.

The interest rate is a fixed or floating fraction of the principal that you must pay throughout the duration of the loan. It is worth mentioning that you are actually charged an annual percentage rate (commonly abbreviated as APR), which is not exactly the same as the interest rate. Although the interest rate makes up the bulk of the APR value, the latter also includes various fees (e.g., origination fee, closing costs, insurance payments, etc.).

For more precise assessment, the interest rate used for these calculations is based on the current mortgage rates in New Jersey, given a $400,000 home price and a 10% down payment.

Median property taxes in New Jersey counties

The property tax is another essential factor to consider when selecting your future home. Many lenders insist on setting up a mortgage escrow account to ensure that the borrower keeps up with tax and insurance costs.

Source: American Communities Survey 2016, U.S. Census

New Jersey Housing Market 2024

In the past year, there has been a notable increase in the market value of homes in New Jersey. This trend has been ongoing and was further accelerated by the COVID-19 pandemic. Nevertheless, the rate of growth has slowed compared to the previous year. Furthermore, both purchase and refinance rates have been steadily increasing for some time, and it is anticipated that they will continue to rise in the near future. This dynamic housing market presents opportunities and challenges for potential buyers and homeowners.

How do I calculate my mortgage payment?

The most convenient way to accomplish this is by using our calculator. It operates based on a simple formula, which you can also manually use to calculate the required amount:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine it, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the overall number of monthly payments)

Imagine you are applying for a 15-year mortgage loan with a fixed 6.99% APR (which is represented as 0.0699 as a unit fraction). The house costs $500,000, and you plan to make a 10% down payment, which amounts to $50,000. Consequently, the principal amount (P) will be equal to 90% of the initial home cost, which is $450,000 ($500,000 - $50,000).

I = .0699 % / 12 = .005825%.

Finally, let’s convert the loan length from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

So, you are going to pay about $4042 a month.

It is important to note that the calculated M value is approximate, as no extra fees are taken into account.

Tips for first-time home buyers in New Jersey

To begin with, there are various federal agencies, such as USDA, FHA, and VA, that provide loan guarantees for specific borrowers. These agencies offer many first-time homebuyers the opportunity to explore options that align with their budgetary constraints.

Besides these government-guaranteed programs, it is worth considering some offers from UHC (New Jersey Housing Corporation) available to New Jerseyns. In particular, first-time home buyers can apply for FirstHome – down payment and closing costs assistance program, if they qualify for a FHA loan and their FICO score is at least 660. This option covers up to 6% of the loan amount toward down payment and/or the closing costs. It is important to note that this option comes in the form of a 30-year-fixed-rate second loan only. If you do not qualify for the FirstHome program, do not despair. New Jersey Housing Score Loan is an alternative program that covers up to 4%. The minimum satisfactory credit score is 620.

Useful tips for first-timers:

1. Obtain Pre-Approval in Advance: Getting pre-approved for a mortgage in advance can enhance your creditworthiness in the eyes of home sellers. It is highly recommended to obtain pre-approval letters from not just one, but at least two or three different lenders.
2. Compare Mortgage Rates: Research and compare mortgage rates from at least three lenders; the more options, the better.
3. Perform Preliminary Calculations: Based on the amount you have been pre-approved for, conduct preliminary calculations to plan your future expenses.
4. Save for a Down Payment: Begin saving for a down payment as early as possible. A larger down payment can reduce the principal amount, subsequently lowering your potential expenses. So, it is important to start saving in advance.
5. Explore VA Loans: If you are eligible for a VA loan, consider this option as a priority.
6. Consider Government-Backed Plans and Local Assistance Programs: Explore government-backed mortgage plans and local assistance programs, as they may present attractive offers that you shouldn't miss out on.
7. Address Previous Debts: If possible, work on paying off any existing debts, as this can have a positive impact on your financial situation.