How to Buy a House in New Hampshire: 6 Steps

Purchasing a house represents a major financial decision, requiring careful consideration of various factors. In New Hampshire, the average home value is $485,943, which is notably higher than the national average of $362,481. This discrepancy underscores the importance of understanding the local real estate market when planning to buy a home.

Understanding down payment assistance programs, mortgage types and state-specific regulations and requirements can ensure a smooth journey toward homeownership in the Granite State. MoneyGeek compiled the essential pointers to help you navigate the homebuying process in New Hampshire, from saving the down payment and choosing the ideal location to finding the best financing option for your particular needs and credit history.

Key Takeaways

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The average home value in New Hampshire is $485,943, which is higher than the national average of $362,481.

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To buy a home in New Hampshire, start by finding an ideal location, checking mortgage options, preparing to meet lenders' requirements and closing on the loan.

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New Hampshire Housing offers down payment assistance programs like Cash Assistance to help New Hampshirites achieve homeownership faster.

Step 1: Prepare to Buy a House in New Hampshire

According to the U.S. Census Bureau, the homeowner vacancy rate in New Hampshire for the second quarter of 2024 was 0.5%. The homeowner vacancy rate measures the proportion of homes available for sale compared to the total number of homeowner-occupied units.

A stable homeowner vacancy rate is around 2%. New Hampshire's 0.5% rate suggests there is not enough inventory on the market to satisfy homebuyer demand. This low rate indicates high competition among buyers, which can lead to increased home prices and limited options. For homebuyers, this means they may need to act quickly when they find a suitable property and should prepare for potential bidding wars.

Before buying a house in New Hampshire, closely examine your financial and credit history. A strong financial profile is essential because it improves your chances of getting approved when applying for a mortgage.

Check Your Credit Score

Your credit score plays a pivotal role in determining the mortgage loans and interest rates you qualify for. A higher score increases your chances of securing a reasonable rate. According to Experian, the average credit score in New Hampshire is 736.

If you have bad credit (a score between 300 and 579 on the FICO scale), obtaining mortgage approval may present challenges. Check the table below to identify which mortgage type suits you based on the minimum credit score requirements.

Mortgage Type
Description
Minimum Credit Score

Conventional Loan

Conventional loans are standard loans not insured by the government, typically offering competitive rates.

620

Jumbo Loan

Jumbo loans exceed conforming loan limits, making them suitable for high-value properties.

700

FHA Loan

FHA loans are designed for low-to-moderate-income borrowers, often with lower down payment requirements.

500–580, depending on the down payment

VA Loan

VA loans offer veterans and active military members favorable terms and no down payment options.

None given, but may require at least 620

USDA Loan

USDA loans are aimed at rural property buyers, often with no down payment required.

580

Source: Experian

Review Your Debt-to-Income (DTI) Ratio

Your debt-to-income ratio (DTI) is a key metric lenders use to evaluate how much of your monthly income is allocated to debt payments. This helps them determine the amount of mortgage debt you can comfortably manage. According to Experian, the average mortgage debt in New Hampshire was $216,493 in the third quarter of 2023. This figure highlights the additional financial responsibility you may take on when purchasing a home.

Your DTI calculation encompasses monthly debt payments, such as mortgages, car loans, student loans and credit card payments. Use our debt-to-income ratio calculator below to assess your front-end DTI, which includes housing-related debt, and your back-end DTI, which considers all debt obligations. This can help you understand your total monthly debt payments.

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Determine How Much You Can Afford

Avoid the financial strain of purchasing a home beyond your means by adhering to the 28% rule. This guideline suggests that no more than 28% of your gross monthly income should be allocated to your mortgage payment. This ensures that your housing costs remain manageable and do not jeopardize your overall financial health.

According to the U.S. Bureau of Labor Statistics, the median annual income in New Hampshire in April 2024 was $49,980. This translates to a gross monthly income of $4,165 before taxes. Applying the 28% rule, your monthly mortgage payment should not exceed $1,166.

Use our mortgage calculator below to estimate your potential monthly mortgage payment in New Hampshire.

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Updated: Nov 1, 2024

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BUDGET FOR ADDITIONAL HOMEOWNERSHIP COSTS

When planning your budget to buy a house, it's important to account for more than just the mortgage payment. Additional housing expenses, such as property taxes and homeowners insurance, can significantly impact your financial planning. These costs are essential to consider as they can vary greatly depending on the location and value of the property.

In New Hampshire, residents pay a property tax rate of 1.93% on owner-occupied properties, according to Tax Foundation data. The average cost of homeowners insurance in New Hampshire is $1,002 annually. These figures highlight the importance of factoring in these expenses when budgeting for a home purchase in the state.

Step 2: Save for a Down Payment in New Hampshire

A down payment is the initial amount paid when purchasing a house, serving as a portion of the total purchase price. Traditionally, a 20% down payment is considered standard. This can be a significant hurdle for many homebuyers. In New Hampshire, the average home value is $485,943, making a 20% down payment approximately $97,189. For homes above the average value, such as $510,000, the 20% down payment would be $102,000.

Fortunately, saving for a 20% down payment is not required for all homebuyers. Many mortgage types allow for lower down payments. For example, VA loans require no down payment, while FHA loans require just 3.5%.

If you put down less than 20%, your lender may require you to take out private mortgage insurance. You can use our PMI calculator to estimate your monthly private mortgage insurance (PMI) premium based on your credit score and down payment.

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Calculate your monthly private mortgage insurance (PMI) premium in New Hampshire based on your credit score and down payment.

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Explore Down Payment Assistance Programs

New Hampshire offers various down payment assistance programs to help make homeownership more attainable. These programs are designed to ease the financial burden for prospective homebuyers. Refer to the table below for more information about available programs in New Hampshire offered by New Hampshire Housing.

Program
What It Offers

Cash Assistance

This program provides up to $10,000 for downpayment and closing costs. It is structured as a second mortgage, which is forgiven after five years unless the borrower sells, refinances or files for bankruptcy within that period.

Step 3: Find the Right Location in New Hampshire

Finding the right location in New Hampshire involves considering several factors. Start by examining the average house price in various cities to determine what fits your budget. Consider proximity to family, friends, work or school, as this can significantly impact your daily routine. Access to public transportation, parks, restaurants and shopping centers can enhance your quality of life and should be weighed in your decision-making process.

The cost of living also plays a key role in choosing your new home. According to the Missouri Economic Research and Information Center (MERIC), New Hampshire's cost of living index in the first quarter of 2024 was 113.6, which is above the national average of 100. When evaluating locations, consider the following expenses:

  • Food
  • Health care
  • Clothing
  • Utilities
  • Education
  • Transportation
  • Entertainment

Check out the table below to see some cities in New Hampshire and their average home values based on recent data. You can also use our cost of living calculator to help you estimate how much you'll need to pay for all the essentials in different locations.

City
Average Home Value

Concord, NH

$416,277

Derry, NH

$473,020

Dover, NH

$513,956

Manchester, NH

$417,245

Nashua, NH

$475,006

Source: Zillow

Work With a Real Estate Agent

Working with a real estate agent can expedite your house hunt in New Hampshire. They provide the advice you need, assist with paperwork and offer an expanded list of property options you might not find on your own. They can also recommend other service providers like title companies and inspectors, ensuring a smoother process when buying your home.

When finding a real estate agent, ensure you do your due diligence and interview those with experience in the neighborhoods you're interested in. Consider the following tips:

  • Find someone compatible with your needs and personality
  • Verify the agent's credentials, training and licensure
  • Ensure they have in-depth knowledge of the area
  • Shop around for agents and compare their rates

You can also use the license holder search tool from the New Hampshire Office of Professional Licensing and Certification to find or verify real estate agents in New Hampshire.

Step 4: Shop for the Best Financing Options in New Hampshire

The homebuying process can be complex, but finding a mortgage you can afford is essential. In New Hampshire, you have options like conventional, jumbo, FHA, VA and USDA loans. You can select loan terms of 10, 15, 20 or 30 years and choose between a fixed-rate mortgage or an adjustable-rate mortgage (ARM). Selecting the best financing option improves your chances of approval and saves you money in the long term.

Know the Current Mortgage Rates

Interest rates on a mortgage can change daily due to several factors, including the type of mortgage, the lender, and the economy. While the interest rate is the percentage charged on the loan amount, the annual percentage rate (APR) reflects the true cost of borrowing by including additional fees and charges. Understanding the difference between these two can help you better evaluate your mortgage options.

As of October 2024, the APR for a 30-year fixed conforming loan in New Hampshire is 6.04%, while the APR for a 15-year fixed rate FHA loan is 7.85%. To see the current mortgage rates in New Hampshire by mortgage type, check the table below.

Data filtered by:Results filtered by:
Loan Type:
Loan Type:10-Year Fixed
5.70%5.86%
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FHA LOAN VS. CONVENTIONAL LOAN

When shopping for a mortgage in New Hampshire, you typically choose between government and conventional mortgage programs. FHA loans, backed by the government, often allow lower down payments than conventional loans, which are not government-backed and may require higher down payments. Understanding this distinction can help you decide which option aligns with your financial situation.

To compare these options, use our FHA loan vs. conventional loan calculator. By entering details such as your home price, down payment, term length, credit score and interest rate, you can determine the best mortgage for you.

Get Pre-Approved

Getting pre-approved for a mortgage in New Hampshire can streamline your home-buying process. It allows you to understand your borrowing capacity and strengthens your offer when negotiating with sellers. Lenders provide a pre-approval letter, which acts as a commitment to lend you a specified amount. This letter is usually valid for 60 to 90 days, giving you a clear time frame to find your home.

To obtain a mortgage pre-approval, you need to submit several documents. These typically include:

  • Proof of income, such as pay stubs or tax returns
  • Credit history reports
  • Employment verification
  • Proof of assets, like bank statements
  • Identification documents

Understanding the difference between mortgage pre-approval and prequalification is vital. Pre-approval involves a detailed financial review, providing a specific loan amount you qualify for. In contrast, prequalification is a preliminary assessment based on self-reported information, offering an estimate of what you might afford.

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HOW TO CHOOSE THE RIGHT LENDER

There are plenty of lenders in the market, each with unique eligibility requirements, interest rates and fees. Banks usually offer a wide range of loan products, though they may have stricter requirements. In contrast, credit unions often provide lower rates and personalized service, but their product offerings might be limited.

Consider these tips when choosing the right lender:

  • Ensure the lender offers the type of loan you want. If you’re seeking an FHA loan, confirm that the lender is FHA-approved.
  • Compare the lender's sample rates with today’s mortgage rates in New Hampshire.
  • Learn about the lender’s underwriting process and whether you can complete a mortgage application online, by mail or in person.
  • Check reviews to assess the quality of customer service offered by the lender.

Step 5: Conduct a Home Inspection in New Hampshire

Home inspections are a recommended step in the homebuying process in New Hampshire. They help identify potential problems that could affect the property's value or safety. Inspectors typically examine various parts of the house, including the roof, electrical systems, plumbing, HVAC and structural elements. An inspection report usually includes detailed findings, potential issues and recommendations for repairs or further evaluation. This report helps buyers make informed decisions about their purchase.

For example, an inspection might reveal significant issues such as a failing roof or outdated electrical systems. These findings can affect the home's appraisal, potentially lowering its market value. In some cases, buyers may decide to rescind their offer based on the inspection results, especially if the cost of repairs is substantial.

State-Specific Inspections

The New Hampshire Board of Home Inspectors, which operates under the Office of Professional Licensure and Certification (OPLC), regulates home inspections in New Hampshire. Home inspectors must adhere to specific standards of practice that require the inspection of various elements of a home, including its structure, exterior, roofing, plumbing, electrical systems, heating and cooling systems, interior, insulation and ventilation.

If you're looking for a home inspector in New Hampshire, ensure they are licensed. It's wise to check online reviews and ask for references to gauge the inspector's reputation. You can also use the OPLC's license search tool to verify their licensing status.

Go Through Appraisal

In New Hampshire, home appraisals determine a property's fair market value, ensuring that buyers pay a reasonable price. According to the 2023 Appraisal Survey from the National Association of Realtors (NAR), the median appraisal cost in 2023 was $500.

It's essential to differentiate between home inspections and appraisals. While appraisals assess the property's value, inspections evaluate its condition. Lenders require appraisals to protect their investment by ensuring the property is worth the loan amount.

Step 6: Close on Your House in New Hampshire

Closing marks the final step in purchasing a home, where ownership officially transfers and you receive the keys. Your lender must provide a closing disclosure document three days before the closing date. This document outlines your loan terms, monthly payments and closing costs. Schedule a final walk-through with your real estate agent near closing day to ensure the property remains in the expected condition.

Sign All Documents

On closing day, you will review and complete various paperwork to finalize your home purchase. Some of the documents you will need to sign include:

  • Final loan application: This document confirms the agreed-upon terms of your mortgage, such as the interest rate and monthly payment. It ensures all details match what was previously discussed with your lender.
  • Deed transfer: This legal document transfers ownership of the property from the seller to you. It is recorded in public records to establish your ownership rights.
  • Promissory mortgage note: This is your legal promise to repay the mortgage loan. It outlines the terms of repayment, including the loan amount, interest rate and payment schedule.
  • Homeowners insurance: Homeowners insurance in New Hampshire protects your new home against damages and liabilities. It covers specific risks associated with New Hampshire, ensuring your property is safeguarded against potential threats.
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CONSIDER HIRING A REAL ESTATE LAWYER

Hiring a real estate lawyer is a common practice when buying a house, whether it's mandatory in New Hampshire or not. A real estate lawyer specializes in property law and assists in various aspects of the homebuying process. They review contracts, ensure compliance with state and federal regulations, and represent your interests during negotiations. They can provide legal protection, help you navigate complex transactions and avoid potential pitfalls.

The cost of hiring a real estate lawyer typically ranges from $700 to $1,250. This variation depends on factors such as the complexity of the sale, the location of the property, the type of property being purchased and your specific needs as a homebuyer.

Pay Closing Costs

Closing costs are the fees and expenses you pay when finalizing a mortgage. These costs can vary by location. The average closing costs in New Hampshire are $5,355, according to NAR. Understanding these costs can help you prepare financially for buying a home. Here are some of the fees included:

  • Appraisal fee: This fee pays for a professional to assess the value of the property you are purchasing.
  • Title search and insurance fee: This covers the cost of researching the property's title history and insuring against any future claims.
  • Escrow deposit: An escrow account holds funds for property taxes and insurance premiums.
  • Prepaid costs: These are upfront payments for items such as homeowner's insurance and property taxes.
  • Other closing costs: These can include fees for loan origination, recording and credit reports.

New Hampshire Homebuying Details: What You Should Know

While we have outlined the general steps for navigating the homebuying process, New Hampshire has unique regulations you should understand. Being aware of these state-specific processes helps ensure a smooth transaction and prevents potential legal or financial issues.

1
Disclosed dual agency is allowed

Dual agency occurs when a real estate agent represents both the buyer and the seller in the same transaction. In New Hampshire, dual agency is legal, but it requires the written consent of both parties. This consent must explicitly acknowledge that the buyer and seller are aware of the dual agency and agree to it, understanding that the agent is serving both interests.

2
Seller disclosures are required

In New Hampshire, sellers are required to disclose specific information about the property's condition that could materially affect its value or desirability. This includes details about the physical condition of the property, environmental hazards and any material defects.

3
New Hampshire has a homestead exemption

New Hampshire provides a homestead exemption, which allows property owners to protect a certain amount of equity in their primary residence from creditors. Knowing this can be particularly beneficial in financial planning and protecting one’s investment.

If you are a first-time homebuyer, learning about the different first-time homebuyer programs in New Hampshire can help you achieve homeownership faster.

FAQ About Buying a House in New Hampshire

Buying a house in New Hampshire represents a financial commitment that lasts for years. We answered some frequently asked questions about buying a house in the Granite State to kickstart your homebuyer journey.

How much does it cost to buy a house in New Hampshire?
What are the requirements to buy a house in New Hampshire?
What credit score do I need to buy a house in New Hampshire?
How much income do I need to buy a house in New Hampshire?
Is buying a house in New Hampshire a good idea?

About Zachary Romeo, CBCA


Zachary Romeo, CBCA headshot

Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production.

Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.


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