North Jersey - Bergen County 5% Down

[Ali Khalid]

Hi All - looking to get some advice on how much I should have in cash when seeking a property in North Jersey at 5% down. I understand there are figures beyond the downpayment and I am looking for a home at the range of $425,000 - $510,000. I have found some good properties that have sold quick. 

Additionally, if anyone is aware of better channels to looks for deals and prices rather than the typical Zillow, Realtor, etc. it would be greatly appreciated.

Thanks!

[Jason Wray]

Ali,

When planning to buy in NJ the biggest thing I would tell you is to plan/research for the closing costs. When you are putting less than 20% down you have to escrow your taxes and insurance into the loan & payment. Depending on the time of year you plan on buying the closing can be much higher. This is due to the number of months the Bank/Lender is required to hold in escrow for both taxes and home owners insurance.

As an example if you buy a home at or over $500K and the taxes are $9800 a year and you buy in a certain month you may be required to have 1 year up front paid on HOI & Taxes plus several months escrowed. That could be as high as $14K to $15K not to mention Title fee's, origination fee's and days of interest another $7K to $8K.

If you choose a lender or broker and they hit you with lender/broker fee's/points that’s another added cost.

My best advice as a Banker is reach out now get a Pre-approval letter up front and give the Bank an idea of what neighborhood or a "mock" address and you can get an actual quote up front to avoid surprises. I have seen many buyers get cold feet once they get into underwriting with a local lender and the loan officer fails to go over total costs including down payment and closing costs.

If you have any questions feel free to reach out I enjoy talking REI and helping

[Shawn Mcenteer]

Hi @Ali Khalid what type of properties are you looking for?  I get a decent a mount of off market multi family deals perfect for those looking to house hack in NJ but they tend to be much higher price point