New Hampshire offers breathtaking scenery and a long list of outdoor activities.
With a state motto declaring “Live free or die,” it’s an exciting place to live and explore, especially if you appreciate a small-town feel. New Hampshire’s industry includes a large technology sector, along with biotech and biomedical research.
If you’re searching for a home in New Hampshire, remember to shop around and compare mortgage rates. What may seem like a small difference could add up to thousands over the course of a 15-year or 30-year mortgage.
- Mortgage debt in New Hampshire
- Types of home loans
- Conforming loan limits in New Hampshire
- First-time homebuyer programs in New Hampshire
- Mortgage refinancing rates in New Hampshire
Mortgage debt in New Hampshire
Credit Karma members with mortgages in New Hampshire had average mortgage debt of $202,920 in 2020, with average monthly mortgage payments of $1,568.
That puts New Hampshire a good bit above average for both mortgage debt and average monthly mortgage payments compared to Credit Karma members across the U.S. in 2020.
Types of home loans
If you choose to finance your dream home, you might be overwhelmed with the number of mortgage loan options out there. Here are some of the more common mortgage types New Hampshire homeowners may consider.
Conventional loans in New Hampshire
Conventional loans are mortgages that aren’t part of government programs. These loans tend to be good for people with solid credit and a down payment of at least 3% to 5%.
New Hampshire FHA loans
FHA loans are a good option for first-time homebuyers to explore — particularly if your credit is less than perfect. That’s because you may be able to qualify with credit scores as low as 580 with a 3.5% down payment or 500 with a down payment of 10%. This FICO® score requirement is the FHA minimum standard. In general, additional lender credit score requirements may apply.
The FHA loan limit in 2021 is generally $356,352 for a one-unit property, but it can reach as high as $822,375 depending on where you live.
Two areas in New Hampshire have higher limits.
- Boston-Cambridge-Newton, MA-NH
You can find the exact limit by county on the U.S. Department of Housing and Urban Development website.
VA loans in New Hampshire
If you’re an eligible veteran or service member comparing mortgage rates in New Hampshire, a VA loan can be attractive since down payments and mortgage insurance aren’t typically required, and you may be able to qualify even if you don’t have great credit.
Similar to FHA loans, VA loans are insured by the federal government but issued by private lenders.
Conforming loan limits in New Hampshire
Conforming loans are a type of home loan that meets certain loan limits set by the Federal Housing Finance Agency. This means they can be bought by Fannie Mae and Freddie Mac, federal-government-sponsored enterprises that guarantee mortgages.
Loans that exceed conforming loan limits are known as jumbo loans. Lenders often consider these loans riskier than conforming loans.
Many counties in New Hampshire have a conforming loan limit of $548,250 for single-unit properties in 2021. Two counties have a conforming loan limit that’s higher than normal: Rockingham and Strafford.
First-time homebuyer programs in New Hampshire
If you’re hoping to buy your first home, there may be some assistance programs available to you in New Hampshire.
- Home Preferred and Home Preferred Over 80% AMI programs: Offered by the New Hampshire Housing Finance Authority in conjunction with the Fannie Mae HomeReady mortgage, these programs include 97% loan-to-value conventional mortgages with low mortgage insurance coverage. Home Preferred mortgages are offered through a network of participating lenders and can be used to purchase or refinance. The Home Preferred program is for borrowers with incomes up to 80% of the area median income. The Home Preferred Over 80% program allows for income above 80% AMI, as long as it doesn’t exceed $137,400. To take advantage of these programs, you must have a credit score of at least 620 and must also meet certain purchase limits. A homebuyer education course may be required depending on property size and/or whether you’re a first-time home buyer.
- Home Preferred Plus, Home Preferred Plus Over 80% AMI, and HomeFlex Plus programs: These programs provide eligible borrowers with cash assistance to help with down payments and closing costs. The funding comes in the form of a second mortgage, which is forgiven in full after four years as long as you don’t sell your home, refinance or file for bankruptcy during that time. Income limits for Home Preferred Plus and Home Preferred Plus Over 80% AMI are the same as for the Home Preferred and Home Preferred Over 80% AMI programs, and the same credit score and homebuyer education requirements apply. HomeFlex Plus, which is the version of these programs specifically for VA, FHA and USDA borrowers, has an income limit of $137,400. Homebuyer education is required for at least one borrower.
- Homebuyer Tax Credit: With the Homebuyer Tax Credit program, you can save money on your federal tax bill. It allows you to claim an annual tax credit for some of the interest you pay of up to $2,000. To be eligible, you must be a first-time homebuyer or purchase a house in a targeted community. There are income, purchase price and homebuyer education requirements too.
Mortgage refinancing rates in New Hampshire
If you’re thinking about refinancing your mortgage, keep a few things in mind:
- Break-even cost — Once you know the closing costs for your refinance, you can use any savings on your monthly mortgage payment to calculate how long it will take you to recoup that investment and “break even.”
- Cash-out refinance — Have you accumulated equity in your home that you’d like to convert to cash? A cash-out refinance lets you refinance your home for more than what you owe and get cash in return. But you’ll owe the full amount plus interest and you’ll end up owning less equity in your home, which means less cash in your pocket if you sell in the future.
- Loan term — You also may want to either shorten or extend your loan term. For instance, if you have a 30-year mortgage, you may want to convert it to a 15-year loan. Keep in mind that reducing your term likely means you’re paying more each month — but less in interest over time. Lengthening your loan term may mean you pay less each month, but more interest over the course of the mortgage.