So you’ve landed a decent gig, you’ve got the guy (or girl) of your dreams, your dog is obviously your best friend, and your apartment is a 5th floor walk-up with a random toilet in the kitchen and 10,000 or so insect neighbors. Which of these things doesn’t belong?
Using these helpful home buying tips, you can break out of your current rental apartment woes and get into the home of your dreams (or at least out of the apartment of your nightmares).
Tip 1 – Consider Buying a Home Outside the City in New Jersey
New Jersey is a short train ride from two major northeastern job markets with amazing schools, infrastructure, and a thriving housing market. Buying a home in New Jersey, in 19 out of 21 counties, is actually cheaper than renting. The average cost of renting just a one-bedroom apartment in New Jersey is $1,800 a month. If you want roomier, 3-bedroom digs you’re looking at a $2,770 figure subtracted from your monthly budget. Based on current rates and a 30-year fixed-rate mortgage on a $200,000 home loan, you can whittle that payment down to roughly $900 a month … AND build equity in your home. So, instead of throwing money in the middle of the street on rent, purchasing a home and paying down your mortgage means you’re investing in something you can eventually own.
A mortgage being more cost efficient than your rent may seem counterintuitive as you drown in your student loan debts, rent, car payments, and skyrocketing costs of Kim Kardashian’s mobile game. However, lower monthly rates and the ability to grow wealth is an undeniable positive when it comes to homeownership. That’s exactly why the New Jersey real estate market is so good for young people – costs are low to own, you get to build wealth through home equity, and you won’t foreclose in a month only to move out West like an old-time Okie in search of arable land. Being that close to NYC and Philly with those kinds of monthly payments is enough to make anyone rethink their current housing situation.
Tip 2 – Understand the Differences Between a 30 vs 15 Year Mortgage
Thinking about life 15 to 30 years from now still involves hover-boards, giant holographic shark advertisements, and time-traveling DeLoreans – so putting a mortgage payment into terms the average millennial can understand is a tad difficult. We’ve done a pretty decent job explaining the 15 year vs. 30 year mortgageexperience – but to reiterate – it’s the only way to make your home purchase both affordable (in the short term) and equitable (in the long term). This isn’t deciding between an Uber and a cab – this is the place you and your (future or current) family will grow and experience life, so thinking with the long term in mind is a must.
It’s scary. It’s big. It is incredibly important to do correctly – but that’s why we’re here! To boil it all down – it’s what you have in savings, what you can get from the bank, and what you can pay month to month. Figuring it out isn’t easy, but taking a realistic look at your financial situation, assessing what you can do, and then actually doing it are all important first steps to take before you start looking at homes for sale in New Jersey.
If you’re shopping for a home in New Jersey, how can I explain it? Well, let’s take it frame-by-frame it: It’s good to know a realistic rate for a home and what may seem to be “too good to be true.” The average median price of a home in New Jersey is $285,000. It’s a little higher than the national average with the current (as of December 2014) median home price clocking in at $209,500.
Keep in mind that Jersey’s statewide average is driven up by the higher cost of homes along the coast. Even though Snooki and J-Wow have long since departed the Jersey Shore, the closer you are to the ocean, the cost of that home goes up incrementally. For instance, the average median sales price of a home in seaside resort town Wildwood is close to $336,000 – and that’s a seaside bargain when you compare Wildwood’s median home price to that of the more affluent shore town of Avalon, NJ. Median home prices in Avalon can go for close to $1.8 million.
Other counties help to round out those costs. The median cost of a home in beautiful Williamstown, NJ can usually fetch a $166,000 price tag – below the national average! It all depends on where you want to live. Areas that are more residential and less resort town are usually a great bargain for younger people looking to branch out on their own.
Circling back to an earlier point, when looking for a home, it’s good to know what’s “too good to be true.” Look at some of the “hidden costs” associated with owning a home. You’ll want to do your homework and find out what the property taxes and homeowners insurance costs are in your area before you take the plunge. You can take a look at those costs on a county-by-county basis in NJ here. In the past few years, New Jersey had been hit by several natural disasters, including Super Storm Sandy. For this reason, some areas are higher than others in terms of flood zone insurance and can be an added (possibly hefty) line item on your monthly budget, depending on where in the state you move. Again, if you’re closer to water, you may end up paying more.
Tip 3 – Know what You’re Looking For
Are you looking for a Spanish style mansion with a sprawling yard, quarter-mile driveway, and a fountain in the landscaping out front? Or maybe something that isn’t insane? Well knowing what you’re looking for is going to help a lot. Obviously your real estate agent (if you’ve made it that far) or advertisements (for those of you earlier in the process) will have pictures of homes for sale in New Jersey, descriptions of the amenities, etc. – but looks can be deceiving and doing your research will take you a long way and save you a lot of time.
Know what mold behind dry wall looks like? What drainage issues after new constructions might look like? How about rain seepage in a basement? Figuring out that you’re looking for a three-bedroom home in a multi-family unit is step one. (They’re actually booming in NJ, as we speak!) Figuring out whether or not the whole thing might come crashing down around you is another thing altogether.
Tip 4 – Research – Same as Above but MORE
You’re reading this, so that is a good start. The key to learning more about the housing market and tips for buying a home is reading more. Do your homework! When it comes to buying a home, this may be the most important bit of research you do in your entire life. (Term paper? Pfft! Forget that!)
