Real Stories

Couple Moves from Small Rental to Roomy Home at the Jersey Shore

Stephanie and Michael moved from Philadelphia to a rental in North Brunswick in 2005, after they both got new jobs in New Jersey. After a few years in the small rental, they felt the apartment was getting too small for them, and knew the market was right to try and buy. They heard about the 2009 $8,000 federal homebuyer tax credit, but knew their income level was too high to qualify.

"Even though we didn’t think we could get the tax credit, we decided to jump on things while homes were affordable," said Stephanie. In late 2008, the couple began researching neighborhoods in Northern New Jersey, and searching for homes. Michael and Stephanie also honed in on their requirements – a three-level townhome with large rooms, a kitchen island, and a deck – to narrow their search. By April, they had not found anything that they were excited about.

"Most of the homes we saw were too old, too small, or too pricey for us," said Stephanie. "Not deterred by all the homes, we started to think of other areas to look at. Mike loves to surf and we both love the beach, so we decided to shift gears to beach-area homes." The couple found a REALTOR®, Shana, and began to look at homes in South Amboy, Old Bridge, and other shore communities. In early June, Shana sent them a listing of a new townhouse development in Middletown.

"When we first saw the drawing of the development, we thought it might be too far of a commute for me," said Stephanie. "But, we decided to look at the house anyway, and we fell in love with it. It was so close to the beach and, after doing the calculations, I decided that the commute was manageable. We also loved it because we wouldn't need to do any renovations or have to deal with lawn care and snow removal. The development offers upgrades to make each home right for its owners and takes care of the outdoor maintenance."

Michael and Stephanie were also enticed to make an offer because of an incentive package. The development gave them several free upgrades - hardwood floors, tiles in the bathroom, high-end kitchen appliances, and a morning room near the kitchen. They were under contract two weeks after first seeing the home.

Once the deal was negotiated, the couple went through the lengthy process of getting a mortgage and mortgage insurance. They wanted to go through a conventional lender but Michael’s credit score was too low to secure mortgage insurance.

"I didn't know this when we started applying, but when two people apply for a mortgage, the lender uses the lower of the two credit scores,” said Stephanie. “We were approved for the conventional loan but couldn't get the mortgage insurance.” Their mortgage broker went over all possible avenues for obtaining a mortgage and introduced them to Federal Housing Administration (FHA) loans, which added a two-month waiting period. FHA financing is growing in popularity for buyers and the turnaround time was longer than that of typical mortgages.

"Even though we had to wait for the mortgage process to end, Shana told us what to expect and guided us through it," said Stephanie. "We closed in November and were able to get the $8,000 tax credit because Congress had just expanded the credit to include a higher income qualifying level."

Stephanie and Michael make the most of their new location, spending free time in other nearby shore towns like Red Bank and Long Branch.

"I'm happy that we stuck with the house hunt even after seeing many homes that weren’t a good fit," said Stephanie. "In the end, we got the home we really wanted."