8 Steps to Buying a House in New Hampshire

Thomas O'Shaughnessy

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Thomas O'Shaughnessy

May 21st, 2022
Updated May 21st, 2022

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8 Steps to Buying a House in New Hampshire

Buying a house in New Hampshire is an exciting milestone, but the process can take some time. Several factors, like your financial situation, market conditions, and the local economy can affect both how long it takes you to find a home and how much it costs you.

For example, homes in Manchester are hitting the market at $449,900 and selling within 33 days — 31 days faster than the state average! — so you'll need to move quickly if you want to beat out the competition.

However, homes typically stay on the market longer in Berlin, so you'll be able to take your time and potentially find a better deal.

The more you know about the steps to buying a house and New Hampshire's current real estate trends, the more prepared you'll be to navigate this complicated process as quickly and smoothly as possible.

No matter where you are in your home buying journey, Clever's concierge team can connect you with local real estate pros who will help you purchase your New Hampshire dream home!

The best part? When you buy with a Clever real estate agent, you could earn a cash-back refund worth up to 0.5% of the home price. On a qualifying $300,000 purchase, you'd get $1,500. That's real money back in your pocket!

» START: Buy with a top local agent, save thousands with Clever Cash Back

Step 1: Save for a down payment

🔑 Key Takeaway:

Your down payment can be less than 20% of the purchase price — $82,442 for the typical home in New Hampshire — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.

Your down payment is the initial portion of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in New Hampshire want you to contribute 20% of the purchase price as a down payment. That would be $82,442 for a $412,211 home — the typical home value in New Hampshire.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

Mortgage Type
Minimum Down Payment (%)
Down Payment ($)
VA Loan
0%
$0
FHA Loan
3.5%
$14,427
Conventional
3%
$12,366
Based on typical home values from Zillow (February 2022)

» READ MORE: Everything you need to know about low-income home loans

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Down Payment
Monthly Payment
Total Interest
Total Cost
5%
$20,611
$208,861
$621,072
20%
$82,442
$175,883
$588,094
Based on a $412,211 home, the typical home value in New Hampshire (Zillow, February 2022) with a 3.08% interest rate for a 30-year loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

New Hampshire down payment assistance programs

Do you need help saving up for a down payment?

There are numerous down payment assistance (DPA) programs for first-time and low-income buyers in the state of New Hampshire. If you're eligible, you can apply for one of these options to receive a government grant or second mortgage to cover closing costs or a down payment.

Here are a few DPA programs in New Hampshire that could help you afford a home:

New Hampshire Housing Home Flex Plus

New Hampshire Housing's Home Flex Plus program offers homebuyers 4% of the base loan amount in financial assistance. The assistance comes as a second mortgage that's fully forgiven after four years.

Eligible participants must take a homebuyer education course and must not earn more than the maximum household income of $137,400.

New Hampshire Housing Home Preferred Plus

The Home Preferred Plus program is eligible for those earning up to 80% of the area median income. The program offers up to 4% of the buyer's base loan amount in cash assistance to cover closing costs or a down payment.

Borrowers must complete a homebuyer education course and not earn more than $137,400 annually to qualify.

U.S. Department of Housing and Urban Development

HUD’s list of alternative DPA programs in New Hampshire can be found here.

Step 2: Get pre-approved for a mortgage

🔑 Key Takeaway

Mortgage lenders consider your full financial situation, including total income, personal debt, and cash reserves, to determine how much you can borrow for a home. Most lenders will require your debt-to-income ratio to be less than 36% including your future mortgage.

A mortgage pre-approval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in New Hampshire will require pre-approval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and pre-approval amounts from several lenders to make sure you're getting the absolute best terms when you buy your New Hampshire home.

Get Pre-approved Today!

Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?

To get a pre-approved for a mortgage, you'll fill out a mortgage application and provide details about your financial situation. They'll look at the following information to determine your mortgage pre-approval amount:

Total income

Lenders need to know that you earn enough to make your mortgage payments each month. Most lenders want your monthly housing costs to be less than 28% of your monthly income.

Personal debt

Lenders also consider your other debts, including credit cards, student loans, auto loans, and personal loans. They use this information to calculate your debt to income ratio (DTI) — or your total debt (including future mortgage) divided by your total income.

While some lenders will approve mortgages for buyers with DTI as high as 43%, it's best to keep your DTI under 36%.

Because of this, you might consider paying off some of your other debts before applying for a mortgage in New Hampshire.

Cash reserves

Mortgage lenders in New Hampshire want to see that you have enough cash in the bank to cover your down payment and closing costs without completely draining your cash reserves.

While this requirement varies by lender, most want you to keep at least enough to cover two mortgage payments including insurance and taxes.

⚠️ Don't Jeopardize Your Mortgage Approval!

Once you're pre-approved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.

Here are some easy ways to ensure your credit doesn't change after you receive your pre-approval letter:

  • Avoid opening new credit accounts
  • Don't close any accounts that have been open for a long time
  • Make all of your credit card payments on time

Step 3: Choose the right location

🔑 Key Takeaway

Search for neighborhoods where:

  • Home prices are within your price range
  • Home values are on the rise
  • The local amenities support your lifestyle

A house's neighborhood can be just as important as its layout and features. In general, you should consider the following factors when deciding which neighborhood is best for you:

What's your home buying budget?

Once you know your budget (a pre-approval letter will tell you the most you can expect to borrow), you can narrow your search to neighborhoods where homes are selling within your price range.

Currently, the typical home value in New Hampshire is $412,211, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years. You want to choose a neighborhood that's in your budget, but could also lead to a big return when you decide to sell.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Manchester:

Home value appreciation in Manchester

Neighborhood
2015
Current
Appreciation %
Straw-Smyth
$221,224
$394,079
43.9%
Northwest Manchester
$175,169
$310,027
43.5%
North End
$258,212
$454,170
43.1%

Local lifestyle

Once you have a list of neighborhoods with homes in your budget, you should evaluate how well each one meets your personal needs and preferences. To finalize your list of target areas, consider factors like:

  • School districts
  • Your daily commute
  • Crime rates
  • Restaurants and amenities
  • Transportation options

Step 4: Find a great real estate agent in New Hampshire

🔑 Key Takeaway

Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent should be an expert on buying a home in New Hampshire.

They'll help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in New Hampshire.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. you should pay attention to a realtor's:

  • Years of experience
  • Number of transactions in the last year (the more the better!)
  • Experience in your price range
  • Overall review score
  • Individual reviews and complaints

Ask each of them questions about your target neighborhoods, how they prefer to communicate, and their strategy for helping you find and close on your new home. You should feel comfortable with the agent's knowledge, experience, and process before committing to an agent.

Top Local Agents Hand-Picked for You!

Clever matches you with multiple agents in your area so you can interview, compare, and choose the best one to help you buy your next home.

Hiring a real estate attorney

New Hampshire does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.

finding a buyers agent

Step 5: Start house hunting in New Hampshire

🔑 Key Takeaway

To help you narrow your choices and find your new home faster, keep in mind these important factors:

  • "Must-haves" vs. "Nice-to-haves": No home is perfect. As you view homes in New Hampshire, you'll have to decide which of your priorities are non-negotiable and which are just nice bonuses.
  • Housing inventory: Depending on the time of year and trends in the New Hampshire cities you're searching in, you may have fewer options to choose from.

Searching for homes in New Hampshire is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Prioritize your needs vs. wants when buying a home in New Hampshire

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in New Hampshire can have a big impact on your number of options. For example, in New Hampshire, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, January gives you the fewest choices in New Hampshire. Historically, there are 61.8%) fewer homes for sale than during New Hampshire's peak season.

Housing inventory in New Hampshire by season

Season
New Listings per Month
Spring
2,318
Summer
2,614
Fall
1,885
Winter
1,464
Based on January 2022 data from Realtor.com

Step 6: Make an offer

🔑 Key Takeaway

Rely on their expertise, keeping in mind these tips for getting your offers accepted:

  • Move fast: In New Hampshire, homes typically stay on the market for 71 day before going under contract — more desirable homes could sell for much faster! If you find a home you love, you shouldn't hesitate to submit an offer.
  • Know how to sweeten the deal: Price is only one factor you can use to convince a seller to accept your offer. You can also sweeten the deal with other compromises — like no contingencies — to create a deal that works for you and the seller.

Once you find a New Hampshire house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in New Hampshire, homes stay on the market for 71 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, New Hampshire homes sell fastest in June, where the average property is only on the market for 46. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in February, you have a bit more time to search. Homes typically stay on the market 31 days longer than New Hampshire's annual average.

Average time homes spend on market in New Hampshire

Annual average
71 days

January
89 days
February
83 days
March
67 days
April
52 days
May
50 days
June
46 days
July
51 days
August
54 days
September
60 days
October
65 days
November
71 days
December
98 days
Based on January 2022 data from Realtor.com

What should your offer include?

Your real estate agent can help you decide which of these common options you should include in your offer:

  • Seller concessions: You'll have to pay for most of your closing costs out of pocket when you buy a home, but you may be able to ask the seller to cover some of those costs for you. This option may allow you to offer a higher purchase price and essentially include your closing costs in your mortgage.
  • Repair credits: If the home is in need of repair, you could ask for credits instead of having the seller make and pay for the repairs. The seller avoids the hassle of waiting for contractors to complete the job, and you get to oversee the repairs in the future to make sure they meet your expectations.
  • Inspection contingencies: Most purchase agreements have inspection contingencies that allow you to change your offer (or back out all together) if the inspection turns up major problems. If you have a high degree of certainty about the house's condition (like if the seller can show you a recent inspection report), you can forgo this contingency to give the seller a higher sense of confidence.
  • Letter to the seller: Many sellers have a personal attachment to the home. They've lived there for years and want to know the next owner will take care of the property. Writing a letter to the seller can show them how you picture your life in the house and appeal to their sentimental side.

👋 Next Steps: Talk to an expert!

If you're weighing your options for buying or selling a house, Clever can help!

Our fully-licensed concierge team is standing by to answer questions and provide free, objective advice on getting the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your info below. Our concierge team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

  • Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
  • Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.

Home inspections in New Hampshire

Having your New Hampshire home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

  • Roof
  • Foundation
  • Electrical system
  • HVAC system
  • Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

New Hampshire-specific inspections

New Hampshire's disclosure laws are less stringent compared to other U.S. states. Homebuyers are strongly recommended to take additional precautions to ensure a property is safe and in good condition before closing.

Although a general home inspection will uncover most issues, buyers may want to consider having the following specialized tests done as well:

  • Radon testing: New Hampshire tends to have elevated levels of radon, which can cause long-lasting health issues if the substance enters a home. If the seller hasn't tested the property for radon in the past year, it's recommended to do a test as soon as possible. You can order a free radon test kit here.

  • Pest inspection: Only seven counties in New Hampshire require buyers to complete a pest inspection before closing, but it's a good idea for all homebuyers. Termites and other pest infestations can cause property damage and pose health risks before a seller is aware of their presence. A quick inspection will ensure that a home is free from any unwanted critters before you move in.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

inspections and appraisals

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

Once you finish your inspections and your lender approves your financing, you'll be ready for closing! Closing is the process of finalizing your mortgage and transferring ownership of the property.

Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.

» READ: The final walkthrough checklist every buyer needs

Closing on your New Hampshire home will require you to complete the legal documentation and settle your closing costs.

On closing day, you'll meet at the title company to finalize your paperwork. Expect to spend about an hour reading and signing all the required documents, which will include:

  • Your final loan application
  • The deed
  • The mortgage promissory note
  • The disclosure statements

This paperwork is crucial for legally transferring the title to your name and finalizing your loan, so read everything carefully before signing. If there's anything you don't understand, ask your agent for assistance.

After you're done with the paperwork, you’ll have to pay your closing costs. The title company will make this process easy by collecting the total amount you owe and distributing the funds to the correct recipients on your behalf.

As a homebuyer, your closing costs can be divided into four separate categories:

  • Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. Other costs related to your loan may also apply, such as appraisal fees and survey fees.
  • Title and escrow charges: Fees the title company charges for facilitating the closing process. These charges will also cover the costs of the title search and title insurance.
  • Prepaid costs: Ongoing costs of owning a home. Most lenders require buyers to pay for certain expenses up front, such as property taxes and homeowners insurance.
  • Other closing costs: Miscellaneous expenses that can vary based on each buyer's situation. Some common expenses may include natural disaster certification fees or real estate attorney fees.

Buyers in New Hampshire typically pay 3-5% of the purchase price in closing costs. For a $412,200 home — the typical home value in New Hampshire — that's between $12,366 and $20,610!

» MORE: Closing costs for buyers in New Hampshire

Frequently asked questions

  1. Save for down payment
  2. Get pre-approved for a mortgage
  3. Choose your preferred New Hampshire neighborhoods
  4. Partner with the right real estate agent in New Hampshire
  5. Go house hunting
  6. Make a strong offer
  7. Inspections and appraisals
  8. Do a final walkthrough and close

Yes! New Hampshire Housing offers its Home Start Homebuyer Tax Credit to first-time buyers and buyers located in target counties. This program reduces the amount of federal taxes that a buyer needs to contribute by up to $2,000 per year. This tax credit is active for up to 30 years, as long as the buyer remains in their home.

Household income and home purchase price limits apply and vary by county.

» READ: What are the top first-time homebuyer programs?

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