Your New Jersey Home Is Under Contract but Has Not Closed

Key takeaways

Under contract is not closed. Until the sale funds, the departing residence's full PITIA stays in your ratio unless a documented rule removes it. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
Agency financing wants evidence the sale will fund, in practice the executed contract plus the closing disclosure or settlement statement. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
Even with a contract in hand, the number your plan runs on is net proceeds, not the contract price. (NJ Division of Taxation, Realty Transfer Fee page, updated 05/21/26.)
The seller-paid Realty Transfer Fee comes off at every price, and above $1,000,000 the Graduated Percent Fee stacks on top starting at 1%.
If the closings cannot be aligned, carrying both payments and recasting afterward is the most predictable route. (Fannie Mae B3-3.8-05, dated 09/02/2026.)
Above the applicable limit, $832,750 or $1,209,750 depending on the county, some jumbo investors will not release the departing payment before the sale funds.

Program and regulatory figures verified September 25, 2026. Details change; confirm your scenario with us.

By Mike Certo, Cornerstone First Mortgage · NMLS #260555 · Updated September 25, 2026

A signed contract tells you the price. It does not tell you what reaches you, and in New Jersey the gap between those two numbers is larger than most sellers expect.

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Where underwriting draws the line

A contract is a promise; funding is an event. The departing residence's payment comes out of your debt-to-income ratio when the file can show the sale is done or documented to the point the guideline accepts, and not before.

If your purchase closes before your sale funds, you are qualifying while holding two payments regardless of how solid the contract looks.

The number your plan actually runs on

With a contract in hand it is tempting to treat the price as settled money. In New Jersey it is not, because the seller carries both transfer fees.

The Realty Transfer Fee applies on its graduated per-$500 schedule at every price. Above $1,000,000 of consideration the Graduated Percent Fee stacks on top, beginning at 1% of total consideration and rising to 3.5%, and the New Jersey Division of Taxation states the seller is statutorily responsible for both.

Take the contract price, subtract both fees, subtract the mortgage payoff, subtract any second mortgage taken for the down payment, subtract ordinary costs of sale. What remains is what retires a bridge or funds a recast. See the net proceeds page.

What to have ready

The fully executed contract on the departing home.
The closing disclosure or settlement statement once it exists.
Current statements on the departing mortgage, taxes, insurance and any association dues.
Evidence of reserves, which is usually what carries a file through an overlap.

Your agent and your closing attorney handle the contract and its dates. We work on what the money has to do around it.

Which structure fits

Structure	Fit when under contract
Carry both, recast after	Strong. Net proceeds become the recast principal reduction, and nothing depends on an investor accepting an offset
Borrow against departing equity	Workable. The second is repaid from net proceeds, behind both transfer fees in the waterfall
Keep it and rent it	Generally unavailable once committed to a buyer

If you are buying above the conforming limit

New Jersey's 2026 one-unit limit is $1,209,750 in the twelve New York metro counties and $832,750 in the other nine. Above the applicable limit some jumbo investors will not release a departing payment until the sale funds, which makes reserves the central conversation. See the jumbo page, the structures page, and if your home is listed rather than under contract, listed but not sold.

Frequently asked questions

Does a signed contract on my current home remove that payment from my ratio?

Not on its own. Underwriting treats a contract as a promise and funding as the event. The departing residence's full PITIA generally stays in your debt-to-income ratio until the file documents the sale, which in practice means the executed contract plus the closing disclosure or settlement statement.

Is the contract price the number my move-up plan should use?

No, net proceeds is. In New Jersey the seller carries the Realty Transfer Fee at every price and, above $1,000,000 of consideration, the Graduated Percent Fee on top starting at 1% of total consideration. Both come off before payoff and costs of sale.

What if my New Jersey purchase closes before my sale funds?

Then you are qualifying while holding both payments, and the answer is a structure rather than a timing hope. Carrying both payments and recasting the new loan after the sale is the most predictable route.

Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content about financing, not a loan commitment and not legal, tax, or real estate advice. New Jersey's Realty Transfer Fee and Graduated Percent Fee are administered by the New Jersey Division of Taxation and exemptions depend on your facts; your closing attorney, your CPA, and your real estate agent each handle their own part. Loans are subject to borrower and property qualification.