New Jersey is a wonderful place to live. Whether you enjoy beachside views or rich autumn leaves, there’s scenery to enjoy for everyone. The job market and economy are thriving, and its connection to major metros like New York City and Philadelphia adds plenty of conveniences, jobs, and amenities. However, New Jersey has a small problem with housing costs due to the popularity of the Garden State. What can prospective buyers do to lower the intimidating price tag of a new home?
Don’t Wait for Price Drops
New Jersey is notorious for its high costs of living, including property taxes. New Jersey has recently seen a 6.2% increase in median property prices, but that doesn’t mean you should wait for it to plunge, as it likely won’t. While prices may fluctuate during certain months or years, you’ll be waiting forever if you’re waiting for a significant price drop.
Lower Your Interest Rate
If you can save up for a decent down payment, you can buy down your interest rate. You’ll pay off your mortgage sooner and have lower monthly payments when you buy down an interest rate. While your home’s price tag won’t change, the lower interest rate will significantly improve the health of your loan. It works by paying for mortgage points that lower the rate by around 0.25% at a time. A mortgage point is usually around 1% of the home’s purchase price. However, these rates may vary per lender or loan.
Take Advantage of Loan Programs
Many government programs aim to help make housing more affordable. FHA (Federal Housing Administration) and USDA (US Department of Agriculture) loans are meant to provide attractive loan terms for families with lower incomes or in rural areas, respectively. There are lower credit score requirements with FHA loans, making homeownership more accessible, even in New Jersey. USDA will require you to live in less populated (rural) areas of New Jersey, but you can cut housing costs significantly. New Jersey also offers down payment assistance programs for first-time homebuyers that can help lower the cost of your mortgage.
Consider a Mild Fixer-Upper
A brand new or turnkey home is going to cost you more for the convenience. If you don’t mind getting your hands dirty, you may want to consider a fixer-upper to cut on housing costs. Renovation costs in New Jersey will likely cost less than a brand-new home, depending on what work needs to be done. Don’t buy a money pit, but it doesn’t have to be turnkey right off the bat. Get homes inspected and obtain estimates before you commit to an older or fixer-upper home.
Build Your Own
In most cases, building your own home through a construction company costs more than buying an existing home. However, you should talk to some construction companies before making a decision. Some builders will offer attractive interest rates or discounts for new builds that you may not receive with existing homes. Compare the costs of all your options; you may be surprised.
Go Modular
Many people confuse modular homes with manufactured homes, as both construction processes can occur offsite. However, manufactured homes are built entirely in warehouses and only adhere to national government Housing and Urban Development (HUD) codes. Modular homes are constructed partially offsite and then completed onsite. For added safety, modular homes must adhere to all regional housing codes, including local New Jersey codes. Modular homes are much cheaper to buy or build than traditional construction, as the offsite labor is easier and quicker. Therefore, they’re much safer and sturdier than manufactured or mobile homes. Modular homes may be a great option to cut housing costs.
Find a Good Real Estate Agent
A real estate agent does far more than look at house listings for you. A great agent will vouch for you and engage in competitive offer battles on your behalf. They’ll know when to double down on a home price and when to back away. Your agent can save you a lot of money on a home and will know when and how to ask for a lower price effectively.
Browse in the Winter
Winter is not a popular time for real estate; it’s cold, and many holidays interfere with buyer and seller plans. Those who list their home for sale during the winter are likely desperate to get it out of their hands, so you may be able to snag a good deal. Consider browsing listings with your agent during the wintertime.
Find a Small Town
It may be convenient and ideal to live right next to the George Washington Bridge to New York, but you’re going to pay top dollar for it. Many beautiful, quaint, smaller towns will cut your housing costs nearly in half. Towns and cities like Parsippany, Cranbury, and Princeton aren’t major urban hubs but offer many amenities and housing options.
Townhomes or Condos
If you aren’t picky about the type of home you move into, you may want to consider a condo or townhome. These homes can be smaller, and you’ll live in a community close to neighbors. However, you will see cheaper prices compared to single-family homes. If you’re sensitive to loud or close neighbors, it may not be the right choice for you. Check out townhomes and condos in your area before making a final decision.
Conclusion
The cost of housing remains one of the only downsides to living in The Garden State. However, you can lower the costs more easily than one may think. Sometimes, all you need is a great real estate agent and a strike of luck. You can also strategically plan to cut costs with options like modular construction or smaller-town life.
