Are you planning to buy a luxurious house in New Hampshire or a home in an expensive market this year? If so, you might be wondering what a jumbo loan is and whether it’s right for you. Maybe you’re planning to buy a new home in Salem or a townhouse in Manchester, let’s break down what a jumbo loan is in Nebraska, the 2023 conforming loan limit, and what’s needed to qualify for this type of loan.
What is a jumbo loan?
A jumbo loan in New Hampshire is a type of mortgage that enables homebuyers to borrow more than the limits set by the Federal Housing Finance Agency (FHFA) for conforming loans. The conforming loan limit (CLL) is the maximum amount of money that a lender will provide to borrowers at a specific interest rate and is established each year. Jumbo loans are necessary for homebuyers who want to purchase a high-value property, such as a luxury home, that exceeds the conforming loan limit.
If the home you’re purchasing will require you to borrow more than the CLL, you’ll need to apply for a jumbo loan. However, it’s important to note that jumbo loans come with higher interest rates and stricter requirements than conventional loans due to the large$828,000 r loan amounts and risk associated with them. For instance, a larger down payment and a higher credit score may be required to qualify for a jumbo loan in New Hampshire.
What is the jumbo loan limit in New Hampshire?
In 2023, the conforming loan limit for a single-family home in most markets is $726,200. But in New Hampshire, the jumbo loan limit varies based on the county you’re buying a home in.
- $726,200 is the conforming loan limit in most New Hampshire counties
- $828,000 is the maximum limit in higher-cost counties
As a reminder, the loan amount is what determines whether or not you’ll need a jumbo loan, not the price of the home you’re buying. So, if you were to put $50,000 down on a $750,000 home in Hillsborough County, the loan would be $700,000, which is under the CLL for this area. In this case, your loan wouldn’t be considered a jumbo loan.
The following counties in New Hampshire have a conforming loan limit beyond $726,200 for 2023:
| County | FHFA Conforming Loan Limit |
| Rockingham County | $828,000 |
| Strafford County | $828,000 |
Additional information regarding the conforming loan limits in New Hampshire can be found here.
What are the requirements for a jumbo loan in New Hampshire?
To qualify for a jumbo loan in New Hampshire, borrowers must meet stricter requirements than they would for a conforming loan. The specific requirements can vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan.
Higher credit score: In order to be eligible for a jumbo loan, most lenders will require a credit score of 720 or higher. While some lenders may be more lenient and accept a score as low as 660, a score below this threshold is generally not accepted. In contrast, a credit score as low as 620 could suffice for a conforming loan with some lenders.
Larger down payment: When purchasing a higher-priced home, buyers will typically need to make a more substantial down payment. While borrowers seeking traditional mortgages may be able to find programs that allow for down payments as low as 3%, those seeking a jumbo loan should expect to put down a minimum of 10%, and in some cases, as much as 30%. If a lender allows for a down payment of less than 20%, the borrower will need to pay for private mortgage insurance (PMI).
More assets: During the asset review process, lenders typically request that jumbo loan borrowers provide evidence of sufficient liquid assets or savings to cover the equivalent of one year’s worth of loan payments.
Lower debt-to-income ratio (DTI): When applying for either a conforming loan or non-conforming loan, lenders evaluate your spending habits and creditworthiness by analyzing your debt-to-income ratio (DTI). The DTI is determined by dividing the total of your monthly debt payments by your gross monthly income. While some lenders may accept a DTI as high as 50% for a conforming loan, those applying for a non-conforming loan should aim for a DTI under 43% and ideally closer to 36%.
Additional home appraisals: For a jumbo loan, lenders may require an additional home appraisal as a second opinion, especially if the property is located in an area with few comparable sales. This is to ensure that the home is worth the loan amount or more and to mitigate the lender’s risk. The cost of the appraisal may also be higher in places with limited sales.
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