Refinance in New Jersey

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Contributor, Benzinga
June 15, 2020

If you can no longer afford your monthly mortgage payment or need cash to cover an unexpected expense, a refinance might be the right option for you. Use our guide to refinancing in New Jersey to learn more about the best places to refinance a mortgage loan.

Refinance Calculator

Best Refinance Lenders in New Jersey 

Mortgage lenders offer a number of refinancing options in New Jersey — from the Quicken Loans® streamlined Rocket Mortgage® platform to affordable VA refinances from Veterans United. 

If you don’t know where to start, check out a few of our favorite lenders below.

Current New Jersey Refinance Rates

Many homeowners in New Jersey refinance their mortgages to take advantage of changing interest rates. Online mortgage lenders now make it easy to view current rates without making a commitment. If rates are lower now than when you got your loan, you might want to consider refinancing.

Below you can view a chart of today’s average market interest rates in New Jersey. We update this information regularly to ensure you have the most accurate data.   

Loan TypeRateAPR
30-year fixed 6.832% 7.02%
15-year fixed 6.28% 6.598%
7/1 ARM (adjustable rate) N/A N/A
5/1 ARM (adjustable rate) 6.438% 7.641%
Rates based on a loan amount of $180,000 and property value of $225,000.
See more mortgage rates on Zillow

Refinance Process

Refinancing your loan might seem intimidating, but a bit of education can make the process simple. Here are the basic steps you’ll take to refinance your loan.

  • Choose your refinance type. Before you apply to refinance a mortgage, determine your goals. If your goal is to lower your monthly payment, you may want to refinance to a longer term or a lower interest rate. If you have high interest debt, you may want to take a cash-out refinance to access a portion of your equity in cash. Familiarize yourself with your current equity, monthly payment and principal balance and decide what you want out of your refinance.
  • Select a lender to service your refinance. Each lender offers different terms, interest rates and other loan options. The best mortgage company for you will vary depending on your needs. Compare a few lenders and choose based on the best rates and terms for the type of loan you need.
  • Apply. Apply for your refinance using your lender’s preferred method. Your lender will likely ask you for bank statements, W-2 forms and pay stubs to prove your income. If you’re self-employed, your lender might also ask you for your full tax return.
  • Lock in your rate. After you apply for your refinance, you’ll receive a decision in 3 days or fewer. The best refinance mortgage companies will allow you to lock your rate for 15 to 30 days. If you’re happy with the interest rate when you apply, it’s a good idea to lock in your rate.
  • Get an appraisal. In most circumstances, your lender will require that you get a new appraisal when you apply for a refinance. Your lender will assist you in scheduling your appraisal.
  • Review your Closing Disclosure. Once your lender finishes underwriting your loan and your appraisal closes, they’ll send you a Closing Disclosure with the final terms of your loan. Review your Disclosure and acknowledge it with your lender to keep your refinance on schedule.
  • Attend a closing meeting. The final step in the refinancing process is closing. At your closing meeting, you’ll pay your closing costs if you have any and sign off on your new loan.

Most refinances take between 30 and 45 days to close. Your loan’s closing time may vary depending on the lender you choose and where you live. 

When Should You Refinance in New Jersey?

There are plenty of reasons why you might want to refinance your mortgage loan. Let’s take a look at some of the benefits you can take advantage of when you refinance.

  • Take on a lower monthly payment. If you can no longer afford to make your monthly mortgage payments each month, consider refinancing to a longer loan term. When you increase your loan term, you give yourself more months to pay off what you owe and decrease your monthly mortgage payment.
  • Change your loan’s interest rate. When you refinance your mortgage, you take on an interest rate that’s in line with current market rates. If rates are lower now than when you got your loan, you can save money each month by refinancing to a lower rate.
  • Get rid of FHA insurance. If you have an FHA loan, you must make monthly FHA insurance payments. You cannot cancel your FHA insurance, but you can refinance your FHA loan into a conventional loan if you have at least 20% equity in your property. This removes the FHA insurance requirement.

Many homeowners also use cash-out refinances to take away a portion of their home’s equity to consolidate debt. 

When Should You Not Refinance?

Refinancing isn’t right for everyone. Let’s take a look at some instances when refinancing might not give you the benefits you need.

  • Interest rates are higher now. If interest rates are higher now than when you got your loan, you might end up paying thousands of dollars more by the time you fully own your home.
  • You plan on selling your home in the next few years. If you sell your home shortly after you refinance, you might end up paying more in closing costs than you saved with your refinance.
  • You can’t afford your closing costs. Some lenders offer “no closing cost” refinances that don’t require you to pay anything in closing costs when you sign on your loan. However, these loans aren’t actually free of closing costs. Your lender adds your closing costs onto the principal balance of your loan and increases your interest rate. Don’t be fooled by the name — these loans often end up costing more than the balance of your closing costs. Wait until you can afford to pay upfront before you refinance. 

Bad Credit Refinance

If you have bad credit, you might have a harder time getting the refinance you need. However, there are a few strategies you can use to refinance if you’re still working on building your credit score.

  • VA IRRRL. If you have a VA loan, you may want to refinance your rate or term with a VA interest rate reduction refinance loan (VA IRRRL). A VA IRRRL may allow you to refinance your mortgage loan without a new appraisal or credit check. To qualify for a VA IRRRL, you must already have a VA loan and have made your last 6 monthly payments on time. You must also have had your loan for at least 270 days before you refinance.
  • FHA streamline. The FHA streamline refinance is similar to the VA IRRRL. It allows you to refinance an existing FHA loan without a credit check or new appraisal. Like a VA IRRRL, you can only qualify for an FHA streamline if you already have an FHA loan, have made your last 12 mortgage payments on time and are only refinancing to get a lower interest rate or monthly payment.
  • Add a non-occupying co-client. A non-occupying co-client is someone who doesn’t live in your home but allows your lender to use their credit when you apply for your refinance. If you fail to make payments on your loan, your lender can pursue your non-occupying co-client for your loan balance. If you know someone who has excellent credit, adding them as a co-client on your loan can increase your chances of approval.  Just be 100% sure you can make your payments before you have them sign on.

You can also wait to refinance until you have a chance to boost your credit score. Taking a few months to make your loan payments on time, limit your credit usage and dispute any inaccuracies on your credit report can mean a world of difference when it comes to your score — and your refinancing options.  

Time to Refinance

Should you refinance your mortgage loan right now? The answer depends on your unique loan and what you want to get out of your refinance. If interest rates are lower now or you urgently need to change your monthly payment, refinancing can be a good option for you. If you’re still building up your credit and rates are higher than average, you may want to hold off on refinancing for now. Contact our recommended lenders to learn more and start your refinance today.

Get Ready for Take Off

Rocket Mortgage® is an online mortgage experience developed by the firm formerly known as Quicken Loans®, America’s largest mortgage lender. Rocket Mortgage® makes it easy to get a mortgage — you just tell the company about yourself, your home, your finances and Rocket Mortgage® gives you real interest rates and numbers. You can use Rocket Mortgage® to get approved, ask questions about your mortgage, manage your payments and more.

You can work at your own pace and someone is always there to answer your questions — 24 hours a day, 7 days a week. Want a fast, convenient way to get a mortgage? Give Rocket Mortgage® a try.