Many first time home buyers assume that the down payment is really the only item they need to have money for when buying a home. Nothing can be further from the truth. When buying a home, typical closing costs in NJ can add up to between $8,000 – $10,000. These costs are in addition to the down payment required for the mortgage. These closing costs in NJ are made up of the property taxes (and HOA fees if they apply), home inspection fee, loan closing costs including the appraisal, and buyer side title insurance. Real estate agent commissions could be a factor, but these are usually already set between the listing agent and the seller, and do not directly affect what the buyer will pay. Read on for all of the details about home closing costs in NJ!
Property Taxes & HOA Fees
You may ask, how much does a home buyer usually spend on property taxes and HOA fees. The answer to this question all depends on the size and location of the property. There is not one specific amount. Some houses are $6,000 per year in taxes, while larger ones have more than $15,000 per year in taxes. This varies widely by the town and the state. NJ has one of the highest property tax rates in the nation. If you are looking to save money on taxes, your best bet may be to buy a small home in NJ that does not have much land or square footage. This could help reduce the amount of property tax you will have to pay.
The Home Inspection
A home inspection is one of the most important items on a home buyers list. This is something that should not be taken lightly. Without one, you will not be aware of any potential problems with the property that can end up costing you money down the road. The cost of a home inspection in NJ is usually around $550 give or take a little bit depending on the overall house size. It can also increase in price if you decide to include a radon test, a sewer pipe scope, and termite testing. It’s recommended to include all of those extra items, as any related repairs to those things can be costly. To save money on a home inspection, shop around and negotiate with the inspectors. Ask them if they can match another companies lower price. Additionally, ask your Realtor for references as they may have an existing relationship with a home inspector that can save you some money.
Mortgage Fees & Down Payments
On top of the loan closing costs we just discussed, the buyer will have to have cash for a down payment. In New Jersey, there are a number of down payment options for mortgages. The best options available to you as a buyer will depend on how much money you have, and how good your credit score is. Many loans have down payment options that range anywhere from 3.5% to 20% of the purchase price. If you happen to be a veteran, you can get a VA loan that requires 0% as a down payment.
Buyers Title Insurance
Real Estate Agent Commissions
Home closing costs in NJ can sometimes be complicated. If you’re not sure exactly how much money you will need to buy a home, it’s best to talk to a professional real estate agent. They can advise you on the specifics, and help you in ways that you may not have thought of. Even if you are 1 or more years out in the buying process, it is always best to get professional advice. A good real estate agent can help you get started and guide you along the way to achieving your home ownership dreams.
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