How Much House Can You Afford in the NJ Real Estate Market?

NJ real estate

As a prospective first time home owner, it can be easy to get caught up in the dream of finding the perfect house without adequately taking your finances into account. In the rush of excitement, things like down payments, property taxes, and closing fees can be pushed to the back of your mind. You might find yourself in love with a property only to realize it is way out of your budget when the final numbers are laid out. When you first start the home buying process, it can be hard to know how much house you can actually afford. Before you jump into looking at houses, it is important to determine a realistic real estate budget. If you are looking own NJ real estate, here are some tips:

Know your take home pay.

Before you can start browsing property listings, you’ll need to become uber familiar with your current financial situation. Determining your take-home pay is a great first step to figuring out how much house you can afford. Your take-home pay is how much money you bring home in a month once taxes and other contributions are taken out of your paycheck. Unless you have a hefty savings that can cover the full price of a house, this monthly take-home pay is the money you will be using to cover your monthly mortgage payments on the loan you will take out to purchase the house.

Determine the length of your loan.

When it comes to a real estate loan, there are three major aspects to consider: the term, the interest rate, and the principal. The term of the loan is how long it will take for you to pay back the loan in full, including interest. The average mortgage term in NJ is 30 years.  Every home loan will come with interest. Interest is the amount that is in addition to the principal amount you will pay back to your lender. Mortgages have compound interest, meaning the interest is calculated monthly based on the overall debt you owe that month. You will be able to pay less in interest if you can afford higher monthly payments over a shorter period of time.

Decide on “fixed rate” or “adjustable rate.”

The amount of interest that will accrue on your loan will depend on whether you have a fixed rate mortgage or an adjustable rate mortgage. A fixed-rate loan has a locked interest rate. If it starts out at 4.2% it will always be 4.2%. This is typically the better option, especially if you can lock in a low interest rate, because your monthly payment will never change. With an adjustable mortgage, your interest rate will change with the fluctuations of the real estate market. This means you could end up with a very high interest rate over time.


Your total monthly loan payment is the biggest determining factor in determining how much house you can afford.


Allocate funds for an adequate down payment.

Most real estate experts suggest allocating no more than 25% of your take-home pay on housing expenses. If you can keep your housing expenses to less than 25% of your take-home pay, you should be able to manage the rest of your monthly living expenses comfortably. The size of your down payment can make your monthly more affordable. The more money you put down, the less money you will have to borrow (and repay.) It is generally suggested to put down at least 10-20% of the purchase price of the home. If you can afford a 20% down payment, you will not have to pay for private mortgage insurance (PMI), which can result in big savings on your monthly loan payment.

Of course, the money you borrow from a lender isn’t the only thing to consider when buying a home. You must also remember to calculate and prepare for:

  • Property taxes
  • Homeowners insurance
  • Closing costs
  • Renovations (if applicable)

All of these things will have an impact on your monthly costs for housing and your ability to afford a particular property. Buying a house is a major financial investment. Thankfully, there are plenty of online tools to help simplify the process for you. SmartAsset.com offers a free mortgage calculating tool that includes the home insurance and taxes you can expect to pay as a home owner in New Jersey.

Becoming a homeowner is a cause for celebration, but the process itself can also be very stressful. Veitengruber Law is a full service real estate law firm in NJ. We can help you through all of the financial aspects of the real estate process so you can focus on the excitement of your new home.

What to do with Your Old 401(k) When Changing Jobs

401k

When you are looking forward to a new job, your retirement savings plan is typically not the first thing on your mind. However, for many of us, an employer-sponsored 401(k) is one the biggest and most financially beneficial perks of a job. Your 401(k) is your future. It is a huge factor in your ability to retire when you are ready and live comfortably in your golden years. That being said, what happens to your old 401(k) when you leave your current job? The best decision will often depend on your specific financial circumstances. Here, we look at the four options you have for your 401(k) when you are starting a new job.

1. Leave it

Of all the options available to you, leaving your 401(k) where it is with your previous employer is the easiest option. The money in your account will continue to grow tax-deferred and be available to you upon retirement. If the plan comes with low fees and good investment options, you may want to stick with it. There are some cons to keeping your 401(k) with your previous employer. Depending on the employer, you may not be able to make additional contributions, take a plan loan, or make a partial withdrawal once you leave. Some employers will charge higher fees if you aren’t an active employee. There is also the risk that you could miss important updates about your plan, or forget about the account entirely. This option will highly depend on your individual circumstances and the details of your former employer’s plan.

2. Roll it into your new plan

While this may not be an option with all plans and every place of employment, this option will allow your retirement savings to continue growing, tax-deferred. You will be allowed to make contributions to the account, typically after a mandatory probation period ends. If your new employer has a better plan (lower fees, better investment options, etc.), it might be worthwhile to take your money with you. There are two ways you can roll your old 401(k) into your new one:

  • Direct rollover: The administrator of your old plan transfers the money directly into your new 401(k) account.
  • Indirect rollover: The administrator of your old plan transfers the money directly to you. Then you must manually apply the money to your new account. This option is typically for people who are in need of a short-term loan. Your employer will withhold 20% for taxes in case you decide to keep the money outright. If you add the money to your account in full within 60 days, the 20% will be returned to you when you file your tax returns.

3. Roll it into an IRA

Instead of rolling over your savings into another 401(k), you could put those funds into an individual retirement account (IRA). Because this account does not have to be connected to an employer, it is a great option for those leaving their job to go back to school, become stay-at-home parents, start their own business, or for those who do not have access to another 401(k). The money can be sent directly or indirectly, only this time you will not have to pay taxes like you would with a 401(k) or a Roth IRA. With an IRA, your money will be able to grow tax-deferred and you will have access to a wider variety of investment options than with a 401(k). An IRA also does not require you to pay fees if you withdraw your money for college, to buy your first home, or to pay off medical debt.

4. Cash Out Your 401(k)

When it comes to deciding whether or not to cash out your 401(k), it really depends on you and your specific circumstances. Most financial planners and asset protection attorneys will advise against it; taxes and penalties will cause you to lose a big chunk of the money you and your employer have invested. However, you know your financial situation best. You may need a big lump of cash to go back to school, as an emergency fund when one parent decides to stay home with the kids, or to start your own business. If you are considering cashing out your 401(k), you MUST make sure you understand what it will cost you.

When you cash out your 401(k), your employer will typically withhold 20% of your balance to pay off the IRS. You will also have to pay state taxes and, if you are under 59 ½, a 10% early withdrawal fee. It is also important to understand that by cashing out this money early, you will be missing out on the money your account could be making in the years between now and retirement. A 401(k) with $50,000.00 when you are 35 will turn into $216,000 by the time you retire at 65. If you were to cash out this 401(k) now, after taxes, fees, and penalties, you would receive approximately $35,000.

Veitengruber Law has experience providing long-term planning guidance at any stage in your career. Protecting your assets and preparing for retirement will look different for every client. We offer personalized strategies to help you make informed decisions about your retirement goals.

What You Need to Know About Long Term Elder Care Costs

elder care costs

In the United States, more than 12 million people require long-term care every year. Long term care can include many different kinds of services, from help around the house and with chores to personal tasks like bathing, dressing, and eating. On average, these services are needed by an individual for at least three years. If you are not factoring long-term care costs into your financial planning for retirement, chances are you should. Long-term care for elderly persons can be very expensive and create an undue burden on your retirement funds. Here are some things you should know about long-term care costs and how to plan for your future.

1. You Can’t Rely on Medicare Alone

Many people over 65 use Medicare to help cover some aspects of long-term care, but there are some significant limitations to the kinds of care Medicare will cover. Medicare tends to pay for assistance for a short period of time – nowhere near the average need of three years. For example, Medicare will only cover a nursing home or rehabilitation center stay for up to 100 days. Medicare also does not cover non-skilled assistance care for help with dressing, bathing, and eating. These forms of assistance tend to make up the majority of long-term care services. Medicare is a great help in the beginning of long-term care, but it cannot cover everything needed for you or a loved one that you are financially responsible for.

2. Medicaid and Government Support have Limits

For people under 65, Medicaid may provide some of the cost coverage needed for long-term care. Medicaid has different requirements depending on your state and income level. Different programs will provide different kinds of long-term care. The best way to determine what you are qualified for is to contact your local agency. Like Medicare, Medicaid coverage will come with time and cost limits. Other public programs, like the Older Americans Act and the Department of Veterans Affairs, will cover some aspects of long-term care. However, these programs only cover specific circumstances for select populations. While this can alleviate the full burden of the expenses of long-term care – they will not cover everything.

3. Insurance is Available to Cover Long-term Care

Long-term care insurance is a specific coverage for the support and special services needed due to aging, disease, or other health conditions. Coverage does vary, but long-term care insurance typically covers most services from in-home personal care to nursing homes, rehabilitation facilities, and other in-patient services. When you are selecting an insurance plan, there are typically a range of different coverage options and benefits for you to choose from. Many insurance providers are now offering hybrid policies that include long-term care coverage. These hybrid policies will allow you to add on long-term care coverage for an additional cost to an existing insurance plan, like your life insurance plan. Long-term care insurance can be expensive, but it could save you big time when the time comes to use it.

4. Relying on Family and Friends can be Taxing

Many people in need of long-term care turn to their loved ones for support. Relying on a trusted family member or friend can help alleviate the financial burden of acquiring professional long-term care. While in many cases a loved one will be up for the task of helping with long-term care, you need to be sure to pick a reliable and capable person. Providing long-term care can be very difficult, time consuming, and physically and emotionally taxing. With this kind of long-term care, it is a good idea to have a back-up plan in case the task becomes too much for your loved one to handle alone.

In general, most people do not properly think about long-term care until they already need it. Waiting until you are in the middle of a long-term care situation to start planning for your healthcare needs can limit your options for care coverage. Planning for long-term care in advance can save you and your loved ones money and alleviate the stress of any future medical events. You can start planning for long-term care today by including it in your estate plan. Veitengruber Law is experienced in offering long-term planning guidance for all stages of life. We can assist you in choosing the right legal solutions to protect your future.

3 Ways to Teach Your Kids About Budgeting

budgeting

Every parent wants the best for their child. As a parent, it is your goal to raise bright, capable adults. And yet, even while saving thousands towards their child’s college fund, many parents do not discuss financial issues with their children. Many parents wait until high school to begin having financial discussions with their kids, but many financial experts caution against this. While it may seem shocking that your four year old is picking up financial habits, children actually start developing an understanding of money from a very early age. Even if your kids are already in their teens, it is never too late to start teaching them smart ways to earn, spend, and save money. If you are ready to have the money talk with your kids, here are some great ideas to start.

1. Teach them how to earn money.

Some parents do not like the idea of an allowance earned for work kids should be doing as contributing members of a household. It can also be difficult to find the funds for a weekly allowance. But an allowance can help your kids connect early on that work and money go hand in hand. Allowances do not have to be a lot. Starting off with quarters for certain tasks or a dollar a week can still facilitate the same lesson. You can choose to reward household chores that go above and beyond the normal household work, or instead opt to provide a financial reward for earning specific grades in school (or other similar milestones.)

If you have a little one with an entrepreneurial spirit, encourage them to practice their business savvy with babysitting jobs, neighborhood yard work, or a lemonade stand. The main goal here is to connect hard work with financial gain. Money does not just magically appear and it is important for kids to understand the dedication and commitment required to earn a buck.

2. Teach them how to spend money.

One of the biggest lessons you can teach your child is how to differentiate between needs and wants. Even adults struggle with this lesson sometimes, so including your kids in conversations about spending can give them the head start they need for future financial success. We often make financial decisions on behalf of our children without explaining why. If your child is begging for ice cream on your weekly grocery run, instead of just saying “no,” take a minute to explain why getting chicken, potatoes, and veggies for the whole family is more important. When back to school shopping, explain why pencils and notebooks are more important than decorations for their locker.

In addition to this, let your kids make real life transactions. Help them count out coins from their allowance to buy a treat. When they are a little older, make them responsible for buying their lunch by giving them actual money instead of simply adding money to their online account. A big part of being a financially healthy adult is knowing how to spend responsibly. Teaching budgeting skills early can set your child up for success in the future.

3. Teach them how to save money.

Let’s face it: saving money can be boring for adults, much less kids. It can be hard for kids to fight the desire to instantly gratify their spending urges when they finally have money of their own. Adding a little creativity and fun to savings can liven up the process while still allowing your kids to learn very important financial lessons. Have your child draw something that symbolizes the item they are saving for and then slowly start to color it in the more they save for it. This will give them a visual to remind them of their goals and help them see how far they have come in achieving them.

While piggy banks are time tested savings tools for smaller children, when your child get a little older it may be worthwhile to open a savings account in their name. Whether you do this at an actual bank or online, opening an account for your child will give you the opportunity to teach your kids about banking. From monthly statements and fees to deposits and withdrawals, your child will be able to watch their savings grow. You could even designate this savings account for college, a car, or some other big financial expense. Involving your child in the saving process for these big ticket items will help your child feel invested in their financial future.

There are plenty of creative and meaningful ways to teach your kids about good financial habits. Taking the time to provide lessons about money now can save them from struggling in the future. When it comes to teaching your kids about money, it is never too early to start!

NJ Foreclosure: Am I Entitled to Mortgage Surplus Funds?

mortgage surplus

Most people view foreclosure as the end of a long battle to keep their home. While it may feel as though you are losing everything, there is still a chance you could get something out of the process. Foreclosure can be a very frustrating experience, but there is a potential for you to receive some funds from the sale of your home to help ease the burden of losing your residence. The monies homeowners can be entitled to after the sale of their home at auction are known as mortgage foreclosure surplus funds. Here, we take a look at who is entitled to mortgage surplus funds.

Once your lender has obtained a final judgement of foreclosure, they will begin trying to sell your home in a sheriff sale in order to make up for the money you owe on your mortgage and any expected costs or fees that have accrued. A sheriff sale typically occurs in the form of an auction. The lender can start the bidding at any amount up to the total amount owed to pay off the debt. However, if multiple buyers are interested in the property, a bidding war can jack up the ultimate sales price. If the buyer ends up paying more for the house than the total amount the owed by the original homeowner, there is a mortgage surplus. Alternatively, if the home sells for less than the borrower owed on the house, the remaining balance is a deficiency. While the lender can file a separate lawsuit to recuperate these funds, it is not a common practice to do so in New Jersey.

Am I entitled to any mortgage surplus funds?

You are likely entitled to surplus funds if: 1) your home was sold in foreclosure for more than you owed the lender, 2) you had equity in your home before foreclosure, or 3) you received a letter from the foreclosure trustee notifying you of surplus funds. It is important to note that any other creditors with liens or judgements on the property may also be eligible to receive surplus funds. If these other creditors do not make application or if there are no other creditors connected with the property, the funds will go to the homeowner.

After your home has been sold and the lender has received payment for the amount owed in the final judgement of foreclosure, the excess money will be deposited into the Superior Court Trust Fund. The lender is not entitled to any funds exceeding what was described in the final judgement, including taxes or insurance costs accrued after the fact. In the event that there is a surplus, the County Sheriff who oversaw the sale will be able to provide information concerning how to receive payment. The former homeowner can file a motion with the court explaining why they are entitled to these funds. If the court approves this motion, an order directing payment of the surplus funds to the former homeowner will be issued.

If you think you are entitled to mortgage surplus funds, Veitengruber Law can help. We are highly experienced in the New Jersey foreclosure process and are proud of just how many NJ homeowners we have helped to the other side of losing their home. We can help you recover a surplus from your foreclosed property. Additionally, we can help you navigate the legal process and handle complex paperwork so you can get your money back faster. We understand the stress and anxiety going through foreclosure can have on our clients. Our goal is to ensure the recovery of any monies due so your brighter financial future can start sooner!

How to Save Money This Summer and Still Have Fun

With longer days, warmer weather, and the kids out of school, summer is a time for exciting activities, long-awaited trips, and idle indulgences. It can also be very expensive. Paying for extra summer activities, vacations, a climbing electric bill, and even more daycare can cause a strain on your finances. This doesn’t have to be the case. There are plenty of ways to stay frugal while indulging in the joys of summer. Here are a few ways to enjoy the summer without letting your spending run wild.

1. Skip the Gym

During the summer, the weather is nice and you find yourself spending more and more time in the great outdoors. Summer might be a great time to consider canceling your gym membership so you can take advantage of the great weather. Walking, running, biking, hiking, swimming, and outdoor sports are all great ways to stay in shape that allow you to enjoy being outside. While some people might need the gym for specific workouts, the majority of those with a gym membership could get the same workout at home without spending the extra cash. If you want to keep your gym membership for the winter, see if your gym will pause your membership plan through the summer months.

2. Find Free Fun

Summer is the ideal time for festivals, concerts, fairs, carnivals, and other free activities. Check out your town’s calendar or website to see what events are upcoming. Free events can be a great way to get the whole family out of the house and doing something together, or it can be a great excuse for an inexpensive adult escape. Take advantage of local parks. If you live near a national park, scope out the free entry days and plan a day trip. If you are looking to relax, check out a good beach read from your local public library. You don’t have to drop a ton of money to enjoy summer!

3. Travel on a Budget

Most people tend to do the most traveling in the summer months. Kids are out of school and the sunny weather energizes the explorer in all of us. The good news is you don’t have to ruin your budget to travel this summer. If you are up for an outdoors adventure, camping is a fantastic family activity that can be very inexpensive without sacrificing any of the fun. Many regions known for camping will have free campsites, allowing you to spend more money on seeing the sights and doing fun outdoors activities.

If camping just isn’t your style, you can still save money without having to rough it. Airbnb homeowners offer great options for budget travelers all over the world, from quaint cabins to glamorous apartments in big cities. Opting for a vacation rental with a kitchen can also save you money in food expenses, allowing you to stay in and cook instead of going out for every meal. When traveling anywhere, be flexible with your travel days in order to take advantage of any flight or accommodation deals.

4. Be Smart About Keeping Your Home Cool

Jersey summers can get rough. The humidity coupled with some really hot days can be miserable and force you to stay inside. On these days, it can be tempting to crank the AC. Instead, try keeping your thermostat set in the mid-70s when you’re home, turning your AC up a few degrees when you’re out of the house. Keep your home cool in other ways, like black-out curtains to block out the sun. Avoid cooking hot meals that get your kitchen boiling on really hot days. Summer is a great time to do some grilling outside or whip up something quick and easy in a crockpot. This will keep your house cool and prevent you from turning down the AC after your oven heats up the house. Keeping your thermostat at a reasonable temperature can save you up to 10% on your electric bill.

5. Shop Second Hand

Summer is a great time for refreshing your style. If you find yourself with the shopping bug this season, think twice before running out to the mall. Yard sales and flea markets tend to be in full swing during summer months, offering incredible deals on everything from vintage dresses to nesting tables for your living room. Thrift shops like Goodwill and second hand home improvement stores like ReStore are great places to score excellent finds for your wardrobe or your house. In addition to the money you can save by thrift shopping – exploring yard sales, flea markets, and second hand shops are a fun and unique way to spend a summer morning.

You don’t have to break the bank to enjoy everything New Jersey’s hottest months have to offer. Keeping your finances in mind during the summer will allow you to enjoy this season without finding yourself broke in the fall.

Secured vs Unsecured Debt: Understanding the NJ Bankruptcy Petition

New Jersey bankruptcy

At the beginning of every bankruptcy case, the person filing will need to complete official bankruptcy forms. The cover document, known as the petition, will include identifying information like your name, address, and the chapter of bankruptcy you are filing. The petition will also include information about your income, your creditor claims (or debts), and assets in specific forms called schedules. Classifying creditor claims can be complicated. All of your debts will need to be listed as either a secured or unsecured claim. It’s important that you properly label each debt. Here, we look at how to list creditor claims in your bankruptcy paperwork.

Secured Claims

In order to have a secured claim in bankruptcy, you must have two things: a debt that you owe and a lien or security interest on property that you own. Examples of secured debt are a mortgage, a car payment, or another collateralized debt. If you fall behind on payments or are unable to keep up with the terms of your contract, the lien can allow the lender to recover the property through foreclosure or repossession. The lender will then sell the property and use the proceeds to pay down your account balance. Secured claims are typically voluntary, but a creditor could obtain an involuntary lien against your property. A creditor could secure an involuntary lien against your property through a lawsuit, whereas if you fall behind on your taxes, the IRS automatically has the right to a tax lien against your property.

During bankruptcy proceedings, a creditor with a secured claim has an advantage. A bankruptcy charge will remove your obligation to pay a debt, but it will not remove a lien on your property. Because of this, a creditor can still opt to take back the property if the loan does not get paid. Therefore, if you file for bankruptcy but you don’t want to lose your property, continue making payments to the lender until the debt is paid off. It is possible to get rid of specific types of property liens in bankruptcy. One option is to get a legal judgement on the grounds that a lien negatively impacts your bankruptcy exemptions. Another option is to wipe out an unsecured junior lien through Chapter 13 bankruptcy.

Things can get complicated, though, if there is significant equity in the property in question, as you will be able to protect a certain amount of equity in bankruptcy. Under Chapter 7 bankruptcy, the trustee will likely try to sell the property. However, the trustee has to make enough in the sale to pay off the loan, return any exempt funds to you, and pay off creditors. The trustee will likely not sell the property if there is not enough equity to pay something worthwhile to creditors. On the other hand, a Chapter 13 bankruptcy will allow you to keep any property with significant equity, as long as you can afford high monthly payments towards the nonexempt equity in the plan.

Unsecured and Priority Claims

With unsecured claims, there is no lien involved in the debt owed. It is, however, important to know if the claim is priority unsecured or nonpriority unsecured. Priority unsecured claims are not dischargeable and will take precedence in repayment plans over nonpriority debts. Examples of priority claims are alimony, child support, tax obligations, and debts from personal injury or drunk driving lawsuits. Priority debts cannot be discharged in a Chapter 7 bankruptcy and you will still be responsible for paying back the full balance. In Chapter 13 bankruptcy, you will have three to five years to pay back the balance in full.

Nonpriority unsecured claims are dischargeable with the exception of student loans. Before these debts can be paid with bankruptcy funds, all priority debts must be taken care of first. Examples of nonpriority unsecured claims are credit card debt, medical bills, and personal loans.

Filing for bankruptcy includes a lot of detailed, complex paperwork. Determining how to categorize your debts can be confusing for the average consumer. Veitengruber Law offers a total approach to debt relief. Our experienced legal team knows how to expertly demystify the bankruptcy process so that our clients have a clear understanding of what is happening – every step of the way.

What You Need to Know About the NJ Appraisal Process

NJ appraisal

Whether you are buying or selling a home in the Garden State, you will have to go through the NJ appraisal process. If the buyer is taking out a mortgage, their lender will need to make certain financial decisions based on the results of a home appraisal. While this is a huge step in most real estate transactions, many people buying or selling a home aren’t sure what their role is in the home appraisal process. Here, we break down that process so you know exactly what a home appraisal can mean for you.

It’s true that a home inspection is intended to protect the buyer, a home appraisal is intended to protect the mortgage lender that is financing the real estate transaction. With a home appraisal, the lender in a mortgage is looking to get an objective estimate of the home’s value. They use this estimate to ensure that they are not lending more than the actual worth of the property. During a home appraisal, the appraiser is looking at everything on the entirety of the property, including: size, location, condition of internal and external home structures, any recent or necessary upgrades, and the price of comparable homes in the area. These pieces of information will provide insight into the true value of a home. From there, the appraiser will offer the lender a baseline sales figure.

In most real estate transactions, the buyer will pay for a licensed home appraiser to assess the property on behalf of the lender. The buyer will either pay at the time the appraisal takes place or add the fee to their closing costs. The lender will choose a licensed appraiser they feel will be the best judge of a home’s value, typically with a background in home construction, contracting, or home maintenance. A licensed home appraiser goes through at least 200 hours of coursework and must pass the state appraiser licensing exam before they can practice in the state of NJ.

A lender needs to be confident in the ability of the appraiser to remain objective in their appraisal, as well as their capability to back up every finding and their overall assessment of a home’s value. The appraisal report will include a drawing of the exterior, a map of the street and surrounding area, photos of the home’s exterior and street views, information on how the square footage was calculated, public tax and land records, and data surrounding area market sales. If any of these documents are missing, it can have a big impact on the home’s appraised value. If you notice any of this information missing, ask for another appraisal.

During the home appraisal process, it is common for the appraised home value to be more or less than the sale price of a property. If an appraisal is higher than the sale price for a home, this will benefit the buyer. But while the appraisal price and the listing price do not necessarily have to match, a major discrepancy in which the home is appraised for can lead to issues. As a buyer, you have a few options going forward. First, you can ask the seller to lower the sales price to match the appraisal price or pay the difference. A motivated seller may comply with this request.

If the seller does not comply, or the buyer is contractually obligated to move forward with the original sales price, there are still some things the buyer can do. If the buyer is concerned about losing their home loan, they can offer to increase the down payment. This way, the buyer is not borrowing as much money and may still be approved by the lender. The buyer could also agree to pay mortgage insurance. Borrowers who are financing more than 80% of their home purchase price will need mortgage insurance. This monthly payment would be tacked onto the regular mortgage payment and is typically .5%-1% of the total loan amount.

If the above options are not able to resolve the issue, a seller or buyer can dispute the home appraisal figure. The disputing party can work with their real estate agent or another licensed appraiser to come up with their own data. If this data diverges from the findings of the lender’s appraiser, there may be a case to correct the previous appraisal value. A lender will look at these findings and work with their own appraisal unit to come up with a new decision.

A home appraisal is an important part of any NJ real estate sale. Being knowledgeable of the process and understanding your options can save you a major headache later on. Real estate transactions are complex and the process never looks the same twice. Veitengruber Law’s experienced real estate team can help you navigate any potential problems with your appraisal, and throughout the entirety of your real estate transaction.