So you're getting ready to buy a home in the Granite State. It's a big step and a life goal for many, but it doesn't have to be an overwhelming hassle. Here you'll find the latest information on mortgage programs for first-time buyers, how interest rates vary in New Hampshire, resources for calculating monthly payments based on different interest rates and loan amounts, and how much cash you're likely to need in closing costs for your new home.
Check Mortgage Rates in New Hampshire
Beyond the credit worthiness of the applicant, mortgage rates in New Hampshire can vary on several factors, including housing demand and the strength of the state economy, which influences employment and salaries. A rate quote is free for the asking; many New Hampshire lenders post their rates online, or you can speak directly with lenders to learn the current rates. The actual rate you may receive will be based on such factors as your credit history, net worth and ability to repay the loan. Learn more about the factors that drive mortgage rates.
First-Timer? Get Homebuying Help in New Hampshire
The New Hampshire Housing Finance Authority is the key state agency providing help to first-time homebuyers. The agency offers government-secured, fixed-rate mortgages to low- and moderate-income homebuyers, and serves as a clearinghouse for free seminars held statewide to educate first-time homebuyers on the process of securing a mortgage, shopping for a home, and closing the sale. It also provides rental assistance to low-income families and individuals, and finances housing developments throughout New Hampshire. The agency reports it has helped more than 41,000 New Hampshire families secure financing for a new home. New Hampshire Housing also posts daily mortgage interest rates available through their lending programs, as well as current market conditions for housing in the Granite State.
One advantage of working with a government agency like the New Hampshire Housing is the agency offers fixed-rate mortgages with zero points. A "point" is simply a fee tacked onto the loan, usually a percentage of the loan amount. Paying zero points means saving money that can be used for closing costs, moving expenses and other bills facing the new homeowner.
The New Hampshire Housing Authority recommends working with an experienced realty agent to save time when searching for a house to buy. Brokers and agents will be better prepared to match your needs with the available housing inventory. New Hampshire agents also know the ins and outs of various mortgage programs available through the state housing authority, so can help the lending process conclude smoothly.
In addition, the New Hampshire Housing Authority occasionally has a selection of homes for sale. A list of the agency's foreclosed properties for sale is available here. The Northern New England Real Estate Network also maintains listings of New Hampshire properties of interest to the first-time home buyer.
Check out this guide for an overview of the homebuying process.
Financial Assistance in New Hampshire for First-Time Buyers
New Hampshire's housing authority and federal agencies like HUD offer a variety of financial assistance and special lending programs to help first-time homebuyers acquire a home of their own. Many of these resources are outlined below.
Find a Housing Counselor in New Hampshire
Understanding Home Affordability in New Hampshire
One of the fastest ways to get up to speed on the New Hampshire housing market is by attending an educational seminar. These are offered regularly in cities throughout the state, covering topics such as home affordability, qualifying for a mortgage, understanding credit scores and how to shop efficiently for a house. Housing affordability in New Hampshire is a factor of the buyer's income and the cost of the property. In many cases, the first-time New Hampshire homebuyer can expect a 30-year mortgage, which works out to 360 monthly payments. Depending on the mortgage loan and whether it is government-secured, as is the case with the New Hampshire Housing Authority's loans, there will be a ceiling on how much the buyer can afford in a monthly payment. This ceiling is a percentage of gross monthly income, typically no more than 33 percent.
How New Hampshire Mortgage Rates and Home Prices Affect Monthly Payments
|Metro Area||Estimated Monthly Mortgage Payment*||Q1 2016 (Change from Previous Year)||2015 Median Home Price||2014||2013|
Source: National Association of Realtors Q1 2016 Metropolitan Median Area Prices and Affordability report.
*Estimated Monthly Mortgage Payment is based on median home prices for the metro area in Q1 2016 and a 30-year fixed mortgage with today's rates.
Determine How Much You Can Borrow in New Hampshire
The FHA's New Hampshire office can approve loans with a down payment as low as 3.5 percent of the appraised home value. In some cases, the required down payment can be bundled into the loan package. FHA loan limits vary by county in New Hampshire but range from about $271,000 to more than $521,000 depending on the type of housing.
The state housing authority also offers a mortgage calculator that helps prospective homebuyers determine a manageable debt level for a mortgage based on their annual gross income. Alternatively, a borrowing estimate can be based on the purchase price of the home or the target amount the buyer desires for the total monthly payment.
Any increase in the interest rate on the mortgage in New Hampshire will increase the monthly payment proportional to the cost of the home. For example, a $200,000 mortgage with a 15-year loan at five percent works out to a monthly payment of $1,581.59. If the interest rate is just .25 percent more (5.25%) the monthly payment rises to $1,607.76. That's an extra $26 each month. Over the life of the loan, it amounts to more than $4,000. The following table can be searched to find out conventional and FHA loan limits in the New Hampshire county where you wish to buy a home.
Buying a Home in New Hampshire: Experts Weigh In
Jane Lawis director of communications for the New Hampshire Housing Finance Authority.
Ignatius Maclellan is managing director of the homeownership division at the New Hampshire Housing Finance Authority.
What's the biggest thing first-timers overlook when they're ready to buy a house?
One of the things we continually try to get across to new borrowers is to get education, either online or one-on-one. It can save you time and money by learning the things you need to do to get a mortgage.
We're real big believers in getting homebuyers some education before they start the process. I see it even among my own family members; they get so excited that they jump into the process before they even know what their credit is, what types of mortgage products are available to them based on their financial situation. So we really encourage first-time buyers to meet face-to-face with lenders or come to us and don't try to do it all online. A lot of people also don't realize we're one of the states that offers a federal tax credit for first time homebuyers. They can save $2,000 a year for the life of the mortgage.
What are some good ways to repair damaged credit so a new homebuyer can qualify for a mortgage?
We are strong supporters of the free homebuying seminars offered everywhere in our state. We're talking budgeting, credit scores, home inspections, preparing for the types of costs you face at the closing table, various mortgage products and the importance of shopping around.
There is no such thing as credit repair; there is only credit rebuilding. Some companies advertise they'll rebuild your credit, but they don't. They might be able to rebuild it. It takes time to rebuild, to pay off collections, to catch up on debt. There's a real strategy behind rebuilding your credit, and having someone who knows what they're doing is important if they're going to help you.
What's are the greatest obstacles to home ownership in New Hampshire? Inventory or affordable housing? Income levels? Other?
In New Hampshire the obstacles include having enough cash for down payments. We have programs to help people with cash assistance.
Affordable housing inventory is a challenge because first-time buyers are competing with more experienced and better financed buyers. I tell people don't be afraid of the diamond in the rough, the fixer-upper. A lot of times, first-time homebuyers don't have a clear idea of the housing they can get. You build up to your dream home over a period of years.
Don't Forget New Hampshire Closing Costs
New Hampshire is one of the less expensive states in the country for closing costs on a mortgage, according to a recent survey by Bankrate.com. More general information on how lenders establish their closing costs and what you can expect can be found here. The infographic below highlights average closing costs in New Hampshire.
Average Closing Costs in New Hampshire
Source: Bankrate's 2015 survey of closing costs.
Refinancing a Mortgage in New Hampshire
The FHFA reports 766 mortgage refinances during the first quarter of the year as interest rates fell in New Hampshire in January and February. Lenders will sometimes forego certain fees in a New Hampshire mortgage refinance to stay competitive with other banks and mortgage companies. It also doesn't hurt to ask about a break on fees when shopping for a deal on refinancing, recommends Jane Law with the New Hampshire Housing Authority.
It's always best to consider refinancing while mortgage rates are low, but realize that rates can change day-to-day in New Hampshire, so the goal is to lock in the lowest possible rate. If news reports indicate rates may fall further, hold off until you're confident rates will go no lower. A reputable mortgage broker in New Hampshire should be able to offer insight and predictions on which way interest rates are going to move - and how far. Here's an overview of the refinancing process.
Other New Hampshire Mortgage Resources
Eligible homebuyers apply for a Mortgage Credit Certificate (MCC) from New Hampshire Housing. The Homebuyer Tax Credit lowers the first-time homebuyer's income tax. This results in an increase in take-home pay, helping individuals qualify for a larger mortgage and still make the payments. It enables many first-time buyers to purchase a bigger house than they could otherwise afford. This annual tax credit of up to $2000 is good for the length of the original mortgage.
Federal home ownership assistance available through the Department of Housing and Urban Development specific to New Hampshire homebuyers.
Offers numerous financing programs to support affordable housing in the Granite State.
Provides a schedule of free seminars to educate new home buyers in New Hampshire.
Offered by the New Hampshire housing Finance Authority, this site offers links to available properties in counties and cities throughout the state.
Listing of grants and financial assistance programs available in New Hampshire for first-time house buyers.
Rundown of programs available to help new home owners come up with a down payment.
An overview of different loan types for individuals with a poor credit rating.
Resources to help distressed homeowners get caught up on their mortgage payments and save their homes.
Foreclosure prevention help in New Hampshire.