For Immediate Release:
October 20, 2008
A LOOK AT MORTGAGE OPTIONS IN TODAY'S MARKET
(Edison, NJ) Navigating through the often complex process of
obtaining a home mortgage can seem to be one
of the most daunting parts of buying a home,
especially in these challenging economic
times. However, New Jersey residents are now
proactively evaluating the effect of
economic changes, weighing their mortgage
options and exploring assistance programs
before they have even begun the search for a
home.
New Jersey's lending climate. For the
past several months, news headlines on high
foreclosure rates nationwide have dominated
the media. Most of these foreclosures were a
result of subprime mortgage lending- loans
typically granted to individuals with poor
credit histories who, as a result of their
deficient credit ratings, would not be able
to qualify for conventional mortgages.
According to recent statements from New
Jersey Banking and Insurance Commissioner
Steven Goldman, subprime mortgages represent
about 10.5 percent of all loans in New
Jersey, while nationally, subprime mortgages
represent about 12.2 percent of all loans.
In the second quarter of 2008, New Jersey
had a 17.1 percent delinquent rate of those
subprime loans, while nationally, the
delinquency rate was 18.2 percent. While
current conditions have lead to more home
foreclosures and tighter financing
guidelines, there are still lending options
available to consumers on sound fiscal
footing. New Jersey home buyers in good
financial standing can take advantage of
historically low interest rates, increased
loan limits from the Federal Housing
Administration (FHA) and statewide mortgage
assistance programs.
"There is no question that the process is
different than it was two years ago.
Purchasing a home may now take a little
longer and buyers may have to fill out more
paperwork, but it is not an impossible task,
especially for those who are well
qualified," said 2008 NJAR® President Drew
Fishman, CRS. "Researching all your options
may take time but in the end homeownership
has a lot of advantages, including many tax
benefits."
Marijohn Mazza, a recent home buyer from
Spotswood, commented on her experience
obtaining a mortgage. "For me, it was a very
smooth process and it turned out where my
mortgage payment was actually lower than my
rent," said Mazza.
Shopping for the right mortgage. With
many different types of loans and lenders
out there, education is the best way to
begin the process of obtaining a mortgage,
even before a property has been selected.
There are websites, seminars, financial
planners, REALTORS® and mortgage
professionals available to help buyers
understand the details of obtaining a
mortgage. Buyers can calculate their future
mortgage payments through the website
http://finance.realtor.com/homefinance/,
but should also consider related insurance,
taxes, homeowner association fees and other
costs rolled into the mortgage payment.
Buyers should also compare different sources
for mortgages such as direct lenders and
mortgage brokers, but when comparing loans
between lenders, buyers should take into
account more than interest rates. Consumers
should also be aware of additional costs
such as points, origination charges,
administration fees, commitment fees and
other processing and closing fees- they
could affect how much the loan really costs
you.
"REALTORS® are a wealth of knowledge and may
be able to guide consumers to reliable
financing institutions and help walk them
through their lending options. In the end,
it is always best to read over all paperwork
carefully and seek out legal advice if
necessary to ensure you understand what
you're signing will really pay off in the
long run. In these times, buyers can't
afford to make hasty, uninformed decisions
because every penny counts," added Fishman.
Eric Bonham of Blackwood maintained an open
dialogue with his REALTOR® and mortgage
company when he recently purchased his home
with his girlfriend. "When we found the
house, our next call was to the mortgage
company to make sure it was in our price
range. Our REALTOR® and loan provider
remained in constant contact, keeping us up
to speed on the next steps," said Bonham.
Exploring assistance programs.
Buyers, especially those purchasing a home
for the first time, should also explore
state and federal assistance programs with
their REALTOR®, mortgage lender or broker.
As of July 2008, the Housing and Economic
Recovery Act created a new, temporary tax
credit to provide an incentive for
first-time home buyers. The $7,500 credit
will be available for the purchase of
principal residences on or after April 9,
2008 and before July 1, 2009. The New Jersey
Housing and Mortgage Finance Agency (HMFA)
also provides a variety of programs and
services that can be used by prospective
buyers. For example, Live Where You Work (LWYW)
is a home mortgage incentive program that
provides low-interest mortgage loans to home
buyers purchasing homes in towns where they
are employed. The Smart Start Program is
also available to participants in HMFA's
first mortgage home buyer's program for
those purchasing homes in Smart Growth
areas, which helps families by offering a
second mortgage for downpayment and/or
closing costs up to four percent.
Kerri Kushner recently utilized a mortgage
assistance program when she bought a home in
Old Bridge. "Everyone is really surprised
that there are programs out there like the
Smart Start program, which is what enabled
me to purchase a home. It's great especially
for first-time buyers to have help in this
area and will hopefully get more people
excited about buying."
NJAR® is encouraging New Jersey residents to
Get the REAL StorySM on real estate in New
Jersey with a public education campaign that
features an informational website and
advertising campaign that also features real
stories from recent buyers and sellers. For
more information on the campaign, or simply
to Get the REAL StorySM on real estate in
New Jersey, visit
www.REALstoryNJ.com.
The New Jersey Association of REALTORS®,
with approximately 53,000 REALTOR® and
REALTOR-ASSOCIATE® members, is one of the
largest trade organizations in the state.
NJAR®'s membership is comprised of real
estate professionals who subscribe to a
strict code of ethics and are members of the
national and local REALTOR® organizations.
As the leading advocate for the real estate
industry and private property rights in New
Jersey, NJAR® is committed to protecting the
dream of homeownership. For more
information, please visit
www.njar.com.
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