Buying a house in New Jersey

In general, to understand the process of buying a house in New Jersey, you must consider three essential steps:

1. Save for the home’s down payment.
2. Get pre-approved for a mortgage, such as a conventional, FHA, VA loan, or a state program.
3. Go through the mandatory attorney review period after signing the contract to confirm or cancel the purchase with an NJ real estate attorney.

Those are only the basic—but essential—steps. In this article, we explain each stage of the process in detail, the real costs you should plan for, and practical tips that can make a meaningful difference when buying a home in the Garden State. 

Steps to know for Buying a house in New Jersey in 2026

The process to buy a house in New Jersey is similar to other states, but it includes a few important local specifics. Below, we break down each step so you have a clear, practical guide as you move forward with your home purchase.

Step 1: Save for the down payment

The first step to buying a home in NJ is setting aside your down payment. Lenders often request 20% of the purchase price, but some programs allow you to put less down:

• Conventional loans: May allow down payments from 3% to 5%, but they typically require private mortgage insurance (PMI) until you reach 80% loan-to-value.
• FHA loans: May allow a 3.5% down payment, but they include mortgage insurance (MIP), which in some cases can remain for the life of the loan.
• VA loans (for eligible veterans and service members): No down payment and no monthly mortgage insurance, but there is a VA funding fee generally ranging from 1.25% to 3.6%.
• State programs NJHMFA: New Jersey offers assistance for first-time buyers, including grants up to $15,000 that may help cover part of the down payment and closing costs.

Practical example of Buying a house in New Jersey: how to purchase a $350,000 home

Assuming you’re buying a home at this price point, the numbers would look like this:

• 20% down payment = $70,000.
• With FHA, the down payment is 3.5% = $12,250, but you’ll also have MIP.
• With state programs, the down payment may be reduced to close to $0 if grants and loans are combined.

Remember that MIP (Mortgage Insurance Premium) is mandatory mortgage insurance on FHA loans and it often remains for the life of the loan, increasing the total cost.

Step 2: Evaluate your financial situation

Before you start searching for a home, you should be clear on your true budget. It’s not only the mortgage—there are also related costs such as:

• Property taxes: About 2.23% average annually of the home’s value (average effective rate; it can vary by municipality/county).
• Homeowners insurance: Often ranges between $800 and $1,500 per year in NJ.
• Maintenance: A common recommendation is to set aside at least 1% of the home’s value per year.
• HOA fees (Homeowners Associations): Common in NJ for condos, co-ops, and townhouses. Monthly fees may range from $150 to over $500, and unpaid HOA dues can result in a lien against the property.
• Closing costs in NJ: Often fall between 2% and 5% of the purchase price and may include attorney fees, appraisal expenses, and other charges.

Estimated additional expenses

Beyond the down payment and mortgage, New Jersey has recurring and one-time costs every buyer should anticipate. For a $400,000 home, key expenses could include:

• Property taxes: $8,800 per year.
• Homeowners insurance: $1,200 per year.
• Closing costs: Between $8,000 and $20,000 (one-time).

That’s roughly $10,000 to $12,000 in additional costs per year, plus your mortgage.

Part of your closing costs may include purchasing title insurance in New Jersey, which helps protect your investment from hidden liens or ownership claims.

Step 3: Get pre-approved for a mortgage

In NJ, most sellers require a mortgage pre-approval letter before accepting an offer. To issue it, a lender typically reviews:

• Credit score (ideally 670+).
• Debt-to-income ratio (DTI).
• Employment history (commonly at least 2 years).
• Available funds for down payment and closing.

After you receive a pre-approval, here are a few practical tips:

• Don’t open new credit lines.
• Don’t change jobs abruptly.
• Keep payments current so your score isn’t affected.

A pre-approval letter does not obligate you to take the loan with that specific lender.

Restrictions for immigrants

In practice, some lenders apply stricter criteria for certain types of mortgage loans when the buyer is not a lawful permanent resident. In those situations, options may be limited to:

• Conventional loans (sometimes with additional documentation and stricter underwriting).
• NJHMFA state programs that may still accept an ITIN, depending on the specific program and participating lender.

Example: A buyer earning $80,000 per year with minimal debt may be approved for a $350,000 mortgage in NJ. However, they may still need at least $15,000–$20,000 available to cover the down payment and closing costs.

Self-employed mortgages in New Jersey

If you’re self-employed, lenders typically review your last two years of tax returns to determine your qualifying net income.

Some lenders offer self-employed mortgage loans that allow bank statements or financial statements instead of relying solely on tax returns.

Step 4: Start your home search

Finding the right home takes planning. For example, you’ll want to consider:

• Your priority list: Bedrooms, bathrooms, location, transportation access, proximity to schools and services.
• Market timing: May and June often have more inventory, while December and January may have less competition, which can translate to better pricing.
• Types of houses in New Jersey: You may run into options such as:
  • Single-family: More privacy, more maintenance.
  • Multi-family: Potential rental income, but often stricter requirements.
  • HOA properties: Monthly fees that may cover services, but with stricter rules.
  • Fixer-uppers: Can be a strong investment, but require thorough inspections.

Practical example: A $380,000 home in Newark with a $200/month HOA may cost about the same as a $420,000 home in a suburb with no HOA.

Step 5: Attorney review period

In New Jersey, most real estate purchases using the standard NJ Realtors contract include a 3-business-day attorney review clause. During this time:

• Your attorney may review or propose changes to the contract.
• The agreement may be canceled without penalty.
• Both sides may negotiate new terms.

This period may not apply automatically if an attorney drafted the contract from the start or in private sales (For Sale by Owner) that do not use the standard form. In those cases, a lawyer should review the document before you sign, because you may not have a built-in right to cancel.

That’s why it’s essential to work with an NJ real estate attorney, because they can:

• Protect your interests during negotiations.
• Review mortgage, inspection, and contingency clauses.
• Help prevent legal problems later on.

Example: A buyer discovered—through their attorney—that the home had hidden tax liens. Attorney review allowed them to cancel the contract without losing their deposit.

Step 6: Make an offer

Once you find the right property, it’s time to submit an offer. To do it strategically, you should understand the following:

Core elements of an NJ offer

These elements give the offer structure and help the seller make an informed decision:

• Proposed purchase price.
• Financing terms.
• Contingencies (for example, inspection, mortgage approval, or appraisal).
• Estimated closing date.

Key clauses

Beyond the basic offer terms, clauses can protect you throughout the process. They typically address risk and responsibilities between buyer and seller:

• Mortgage contingency: Protects you if the loan is not approved.
• Pest and radon inspections: Common in NJ due to environmental risks.
• Shared expenses: Negotiations around repairs or closing costs.

Because mortgage rates have been high, many sellers are offering concessions—for example, paying part of the closing costs or reducing the price in exchange for a faster closing.

Example: In Bergen County, a buyer negotiated for the seller to cover $10,000 in closing costs in exchange for closing in under 30 days.

Step 7: Get a mortgage in New Jersey

After your offer is accepted, the formal mortgage application process begins. 

Once you meet the mortgage requirements in NJ, you can choose from several types of lenders in the state:

• Traditional banks.
• Credit unions.
• Private mortgage companies.

Factors to compare

Before you sign a mortgage, it’s smart to compare lenders on multiple points so you can secure the best terms:

• Interest rates: After a period of elevated rates in 2025, when 30-year fixed mortgages generally ranged around 6% to 7% depending on the market and the lender, buyers entering the New Jersey real estate market in 2026 continue to face variable rates based on their borrower profile and overall market conditions.
• Closing costs (often 2% to 5% of the purchase price).
• Additional fees (appraisal, credit reports, insurance).

Required documentation

To evaluate your mortgage application, the lender will require documents that show your ability to pay and support the transaction details.

• Tax returns for the past 2 years.
• W-2 forms and pay stubs.
• Bank statements and a list of debts.
• Signed purchase agreement.

Since 2025, some banks tightened internal verification and documentation requirements for certain profiles without lawful permanent residency. In practice, many NJ lenders may require:

• A valid Green Card or a current work visa, and
• An active Social Security number.

Quick example: A couple earning $90,000 per year obtained a $350,000 mortgage with a 10% down payment. Their monthly payment—including taxes and insurance—ended up around $2,750.

Step 8: Inspection and appraisal

A home inspection in New Jersey is critical because it can uncover hidden defects. Common inspections include:

• Home structure, including foundation, roof, electrical, and more.
• Radon testing.
• Pest inspection (such as termites).

The average cost for these inspections often runs between $400 and $700, depending on the property size and location.

Home appraisal

Like the inspection, the lender will also order a New Jersey home appraisal to confirm the property is worth the amount being financed. 

This process typically considers factors such as: 

• Location,
• Condition of the home, and 
• Recent comparable sales in the area.

If the appraisal comes in lower than the agreed price, the buyer may renegotiate or even cancel the contract. 

However, this is typically only possible if the contract includes an appraisal contingency. Always confirm your contract includes it to avoid losing your deposit.

Example: In Hudson County, a home listed at $500,000 appraised at $470,000. The buyer negotiated a $20,000 price reduction to move forward with closing.

Step 9: Prepare for closing

Closing is the final step where documents are signed and ownership is transferred.

Before closing:

In the days leading up to closing, it’s important to confirm everything is in order and the property matches what was agreed.

• Do a final walk-through 24 hours before closing.
• Verify agreed repairs were completed.
• Confirm appliances and systems are working properly.

During closing:

This is the moment to sign the legal documents and make the required payments to complete the transaction. This may include:

• Signing the promissory note and mortgage.
• Signing and recording the NJ property deed in the buyer’s name.
• Transferring funds (down payment and closing costs).

After closing:

Once the process is complete, the buyer officially takes ownership and the loan becomes active. As a result:

• You receive the recorded deed.
• The lender provides your mortgage payment schedule.
• In some cases, the loan may be transferred to a different servicer.

Key NJ tip: Closing costs are often high (around 4% to 5% of the purchase price). For a $400,000 home, that can mean paying an additional $16,000 to $20,000.

What does buying a house in New Jersey involve?

Buying a house in New Jersey isn’t identical to buying in other states. There are a few local factors every buyer should understand, including:

• Mandatory attorney review clause: In NJ, after signing a standard real estate purchase contract, both parties typically have 3 business days for an attorney to review or cancel the contract. This helps protect buyers from unfair terms.
• Competitive market conditions: After elevated mortgage rates throughout 2025, buyers entering the New Jersey market in 2026 are still dealing with tighter affordability and careful lender scrutiny.
• High property taxes: New Jersey has some of the highest property taxes in the country (an average effective rate close to 2.23% of the home’s value).
• Special requirements for immigrants: While you don’t need to be a U.S. citizen to buy, some loans (such as FHA or VA) may have additional requirements depending on immigration status and lender policy.

Example: If you buy a $400,000 home in NJ, in addition to your down payment, you should plan for at least $8,800 per year in property taxes and about 2% to 5% in closing costs.

If instead of buying you’re thinking about selling a house in New Jersey, we also offer a complete guide and legal services to support you through the entire sale process.

Frequently asked questions about Buying a house in New Jersey

Do I have to be a U.S. citizen to buy a house in NJ?

No. Anyone can buy property in New Jersey regardless of citizenship. However:  

• If you’re financing the purchase with a mortgage, most banks require the buyer to have obtained a Green Card or to hold a valid work visa.
• If you’re paying all cash, financing requirements don’t apply, but you still must present valid ID and meet the legal requirements of the transaction.

For more details on buying in NJ based on immigration status, read: “Can an illegal immigrant buy a house?”.

What is the minimum down payment to buy a house in NJ?

Your minimum down payment depends on the type of mortgage you choose and your financial profile. Here are common requirements:

• FHA loans: Minimum 3.5% if your credit score is 580 or higher. If it’s between 500–579, the down payment may increase to 10%.
• Conventional loans: Options from 3% to 5%, depending on the lender, your credit, and your debt-to-income ratio.
• VA loans: 0% down for eligible veterans.
• USDA/Rural loans: Up to 100% financing if the property is in an eligible area and you meet income requirements.

Can I buy a home in NJ with no credit?

Yes, it’s possible, but the process is usually more complex. Some lenders accept alternative credit histories—such as proof of rent and utility payments—but interest rates may be higher.

What programs exist for first-time homebuyers in NJ?

If you’re looking for assistance as a first-time homebuyer in New Jersey, there are state and federal programs that may make the process easier:

• NJHMFA First-Time Homebuyer Program: Assistance for down payment and closing costs.
• First-Generation Down Payment Assistance Program: May provide additional funds (for example, $7,000) for those who are the first in their family to become homeowners, when combined with an NJHMFA mortgage and DPA program, depending on eligibility.
• HFA Advantage Mortgage Program: A 30-year fixed conventional loan with lower down payment options and reduced mortgage insurance.
• First-Time Homebuyer Mortgage Program: Another baseline mortgage program for first-time buyers.

How our real estate attorneys help you with Buying a house in New Jersey

Learning how to buy a house in New Jersey can be exciting, but it’s also a legal and financial process that needs careful handling. 

Every decision—from mortgage pre-approval to closing—can impact your financial future. At Curbelo Law, our real estate professionals in Ridgewood, NJ support you throughout the process, including:

• Contract review and negotiation.
• Attorney review period strategy.
• Resolving issues that arise from inspections or appraisals.
• Representation at closing and deed recording.
• Strategic guidance for immigrant homebuyers.

Don’t take this step alone. Contact us today for a private consultation and make sure your investment is protected at every stage of the process.