If you are considering moving to New Hampshire and you’ve started the home-searching process, you probably feel overwhelmed by the number of things you need to learn when buying a home. Before setting your foot on the uncharted territory of real estate there, check our list of 5 things homebuyers in New Hampshire should know.
Check Your Finances
First and foremost, prepare your money. You will need a 20% down payment and a credit score of at least 620 to purchase a home in New Hampshire. The cost of living in New Hampshire is significantly higher than the national average; therefore, it typically takes at least $100,000 in savings to purchase a home there. However, the need for a good credit score shouldn’t dissuade you from house hunting. A thorough examination of your finances is the first step in purchasing a house anyplace. Examine your credit standing, debt-to-income ratio, and spending plan to determine your affordability before you ever contemplate buying a property.
Calculate Your Down Payment
You will require a 20% down payment on your house in New Hampshire to qualify for a conventional loan. New Hampshire’s typical house prices range from $315,000 to $400,000 and change seasonally depending on the real estate market. Before closing expenses or other fees, your down payment on a $350,000 house would be roughly $70,000.
In some cases, you may be able to pay down less, mainly if you are eligible for a government-backed loan, such as a mortgage from the Federal Housing Administration (FHA) or the Veterans Administration (VA). If your credit score is high enough, FHA loans allow you to put down as little as 3.5%, while VA loans may not require any down payment and can provide comparably cheap interest rates and closing expenses.
Verify Your Credit Rating
You should contact the three major reporting agencies and ask for your credit report. You will need a score of 620 or above to qualify for a conventional home loan. It doesn’t hurt to improve your credit as much as possible before you start looking to buy, even if you satisfy the minimal requirement.
Here are some suggestions for raising your score:
- Refute false information or false credit charges. Examine your credit reports for any dubious data, and then follow the instructions in the report to get inaccuracies deleted or fixed.
- Reduce the amounts on your credit cards so that they are low. To determine your credit usage ratio, lenders analyze the amount of credit you have available to you to your outstanding obligations. Your credit usage determines about 30% of your credit score, and those with the best scores only use 7% to 30% of their available credit. By requesting higher credit limits on open accounts, you may potentially improve your usage score.
- Make sure your payment history is immaculate. Your payment history mainly influences your credit score. Budget wisely to ensure that all credit, loans, and other financial payments are made on schedule every time.
- Take action on accounts for collections. Make a strategy to pay off any collections-related accounts you may have as soon as possible. Reach out to your debtors since collection accounts have a 7.5-year impact on your credit score. When you pay off the accounts, ask that it be deleted or recognized as satisfied.
Determine Your Debt-To-Income Ratio (DTI)
Lenders can determine from your debt-to-income ratio how much of your income is presently being used to pay off obligations such as credit card debt, personal or installment loans, mortgage payments, and auto payments. Your lender will be looking for a DTI of 36% or less for you to be eligible for a loan. Additionally, they’ll check to ensure your mortgage payment is less than 28% of your total income. Work on paying off credit card debt, auto loans, and other debts if you need to lower your DTI. Also, avoid financing any major purchases for at least a year before you apply for a house loan.
Closing Fees And Other Expenses
The buyer is also liable for some of the closing charges and fees related to the home buying process in addition to the down payment. Although closing expenses are frequently split in some form between the buyer and the seller, on average, plan to spend an additional 2% to 5% of the home’s worth on them. This typically runs from $6,000 to $16,000 in New Hampshire.
Your closing fees will often include the following:
- Home Evaluation
- Fee for credit reports
- Cost of a home inspection
- Mortgage protection
- Tax on real estate
There will also be a few additional expenses you should factor in. A common task people forget is organizing the move itself. Once you do the math, make the down payment on a house, and close the deal, finding the best local movers that can help you settle into your new home will be the last step towards finally starting a new life in New Hampshire. Although many people leave booking a moving company for later, you may have trouble finding available dates if you contact them too late. Being responsible with your money is the most significant way to position yourself for long-term happiness and success because homeownership comes with many unforeseen fees.
Speak with a financial counselor before beginning the house purchasing or even the home hunting process. A financial advisor can offer you a clear picture of your present financial situation and what you can and cannot afford. They can also explain how to take advantage of your equity once you’ve bought a home.
Additional tip: Don’t forget to do your research. Check into first-time buyer programs in New Hampshire for additional financing options and homebuying benefits. Residents of New Hampshire can choose from various programs to help them become homeowners, including Housing in New Hampshire, Home Flex Plus, Purchase Rehab, and several County-Specific Programs.
We hope this list of 5 things homebuyers in New Hampshire should know has given you some insight into purchasing real estate. You should now be a step closer to buying your dream home in New Hampshire. Good luck in your house hunting!