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If you're buying a high-value property in New Hampshire, you will likely need a jumbo loan once your mortgage amount exceeds the 2024 conforming loan limit of $766,550 in most counties. These non-conforming mortgages come with stricter qualification standards, including higher credit score requirements and larger down payments, due to the increased risk for lenders. This guide breaks down the essential details for New Hampshire homebuyers.
A jumbo loan is a type of mortgage that exceeds the conforming loan limits (CLL) set annually by the Federal Housing Finance Agency (FHFA). Conforming loans are those that meet FHFA standards and can be purchased by government-sponsored enterprises like Fannie Mae and Freddie Mac, which often results in more favorable terms for borrowers. When a home's purchase price requires a loan larger than the CLL, a jumbo loan becomes necessary, typically for luxury properties or homes in high-cost areas.
It's crucial to understand that the need for a jumbo loan is determined by the loan amount, not the home's sale price. For example, if you make a substantial down payment on an expensive home, your loan amount could still fall under the conforming limit.
The conforming loan limit is the baseline for determining when a jumbo loan is required. For 2024, the standard limit for a single-family home in most U.S. markets is $766,550. However, in New Hampshire, limits are adjusted for higher-cost counties.
| County | 2024 Conforming Loan Limit (Single-Family Home) |
|---|---|
| Carroll, Grafton, and Rockingham Counties | $862,500 |
| All Other New Hampshire Counties | $766,550 |
Source: Federal Housing Finance Agency (FHFA), 2024 data.
In a higher-cost county like Rockingham, a loan of $800,000 would be considered a conforming loan, not a jumbo loan. Conversely, a loan of $770,000 in a standard-limit county like Hillsborough would require a jumbo mortgage.
Lenders impose more rigorous criteria for jumbo loans to mitigate the risk associated with larger loan amounts. Based on our experience assessment, typical requirements in New Hampshire include:
Higher Credit Score While some conforming loan programs may accept scores near 620, jumbo loan lenders typically require a minimum credit score of 720. A higher score demonstrates a strong history of debt management and improves your chances of approval.
Larger Down Payment Jumbo loans usually require a larger down payment. Expect to put down at least 10%, with many lenders requiring 20% or more. A down payment below 20% will likely require private mortgage insurance (PMI), which protects the lender in case of default.
Lower Debt-to-Income Ratio (DTI) Your debt-to-income ratio (DTI) is calculated by dividing your total monthly debt payments by your gross monthly income. For jumbo loans, lenders generally prefer a DTI below 43%, and ideally closer to 36%. This is stricter than for some conforming loans, where a DTI up to 50% may be acceptable.
More Substantial Cash Reserves Lenders will want to see proof of significant liquid assets. You may need to show you have enough savings to cover six to twelve months of mortgage payments, including principal, interest, taxes, and insurance. This proves you can withstand financial fluctuations.
Potentially Additional Appraisals Due to the high loan value, a lender might order a second home appraisal to validate the property's value, especially in areas with few comparable recent sales. This additional step ensures the property is adequate collateral for the loan.
Securing a jumbo loan in New Hampshire involves navigating specific thresholds and preparation. Determine your needed loan amount first by subtracting your down payment from the home's price. Check the conforming loan limit for your specific county, as this directly dictates if you'll need a jumbo loan. Finally, prepare for stricter financial scrutiny by reviewing your credit score, DTI, and cash reserves well in advance of your home search. Understanding these requirements can make the process of purchasing a high-value home significantly smoother.
