Today's Mortgage Rates
|Product (Rate Program)||Rate||APR|
Whether you're a first-time homebuyer or real estate veteran, refinancing or taking out a home equity loan, finding the best mortgage rates in NJ can be a challenge. Current NJ mortgage rates can change daily, sometimes by the hour, and the rate you get will likely be different from that of your neighbor – even from the same lender. So what's the secret to getting the best mortgage rates in New Jersey?
Patience. And understanding. That's not to get all squishy here, but those are the key to finding the lowest mortgage rates in NJ or anywhere else. Patience to shop around different lenders and to get the information you know to understand how mortgage rates work so you don't get sucked into a bad deal.
The lowest rates may not be the best NJ mortgage rates
Here's a key thing to know: what may look like the best mortgage rates in NJ are not necessarily the best deal. That's because the mortgage rate is only part of the cost of the loan. A low mortgage or refinance rate may come with a lot of fees piled on that increase the cost of the loan.
In particular, an advertisement for a low mortgage rate that includes two or more discount points may not be as good a deal as it seems. Discount points are a way of buying a lower rate by paying an additional fee. They can save you money over the long term, but they can also be used to disguise the true cost of a loan.
A better way to gage the cost of NJ home loans and find what's truly the best mortgage rate is by the APR, or annual percentage rate. That expresses the total annualized cost of the loan, the rate, points and other fees included, in terms of the equivalent interest rate. The lower the APR, the lower the long-term cost of the loan on a fixed-rate mortgage.
Current NJ mortgage rates vs. your rate
Today's NJ mortgage rates are listed at the top of the page. But those aren't necessarily the rates you'd get if you locked at rate today. The current mortgage rates listed are averages of what borrowers are paying – and the mortgage rate you pay varies depending on your borrower profile and the type of loan you get. New Jersey borrowers with high credit scores get better mortgage rates than those with weaker credit. A large down payment usually gets you a better rate than a smaller one. Whether you pay for discount points is a factor. The type of loan you get, such as conventional, FHA, VA or jumbo will affect your mortgage rate.
Lenders also vary among themselves in how they price the rates on their mortgages. So to get the best mortgage rate, you need to shop around among lenders licensed to do business in New Jersey. You can do that by calling around directly to get personalized quotes; you can also obtain multiple quotes at once by using a rate request form such as the one at the top of this page. Each quote is based on your personal borrower profile, so you can compare what different lenders are willing to offer you specifically.
Here's a look at some of the major mortgage types you will encounter in New Jersey and how the rates vary among them.
"Conventional loans" is the term used to refer to mortgages backed by Fannie Mae and Freddie Mac. These are the most common type of home loans written in the United States, accounting for over half of all mortgages. Lenders who make loans adhering to Fannie Mae and Freddie Mac's standard receive a partial guarantee against the default of those loans, which allows them to offer lower rates and more lenient terms than they could otherwise.
Conventional loans often offer the best mortgage rates and terms for borrowers with good or excellent credit. Their rates are tied to your credit score, so borrowers with weaker credit pay higher rates. Down payments of as little as 3 percent are allowed, but you'll get a lower mortgage rate with a bigger down payment.
FHA loans in NJ
Another popular option for NJ borrowers are FHA loans. Borrowers with weak credit can often get a better mortgage rate on an FHA loan than they can on a conventional mortgage, and will likely have an easier time qualifying as well. However, FHA loans also charge an upfront mortgage insurance premium of 1.75 percent of the loan amount. While that is often offset by the lower rate available to borrowers with weaker credit, it makes these loans less attractive to borrowers with higher credit scores.
Refinance rates in NJ
You won't find much difference between NJ refinance rates and the rates on a mortgage used to purchase a home. From a lender's perspective, they're pretty much the same. Your credit score and loan-to-value ratio are bigger concerns. On a refinance, your home equity plays the same role your down payment did when you purchased the home, so if you have 40 percent equity when refinancing, it's like making a 40 percent down payment.
Home equity loan rates in NJ
Home equity loans are another type of mortgage, as they're backed by the value of your home. Home equity loan rates run higher than the rates on a primary mortgage used to finance a home purchase, because in the event of a default they don't get paid off until the primary mortgage is satisfied. So they're sometimes called "second mortgages."
There are two types of home equity loans: A standard home equity loan, where you borrow a sum of money and pay it back, and a home equity line of credit (HELOC) that gives you a certain limit you can draw against as you wish for a number of years before you have to begin to repay it.
Standard home equity loan rates can be either fixed or adjustable. Fixed rates are unchanged; adjustable rates start out lower but then adjust periodically to follow current NJ mortgage rates. HELOCs are always adjustable-rate during the draw period when you can borrow money, but can often be converted to a fixed rate once you reach the repayment phase.
Ready to check current NJ mortgage rates and find the best mortgage rate for you? Use the form at the top of this page to request personalized rate quotes from multiple lenders with no obligation.