How to Qualify for a Larger Mortgage in New Hampshire 21 Jan 2025, 5:59 pm

You may have an idea of what a “large” mortgage means to you, but in the mortgage world, we have something called “jumbo” mortgages. These are mortgages that are so large, they are greater than the Fannie Mae or Freddie Mac conforming loan size which in 2025 is $806,500 with a $914,250 limit in Rockingham and Strafford counties.

Qualifying for a jumbo loan works the same way as a regular conforming loan in the respect that you have to meet program requirements for satisfactory credit, enough liquid savings (cash), enough income to repay the mortgage debt (capacity), and a satisfactory property (collateral).

1. Credit – Most programs require you have a minimum FICO credit score of 640. A higher credit score will put you in a more favorable and lower interest rate program. For an optimum interest rate, work toward getting as close to a 740 FICO as possible.
2. Cash – You need some. The down payment requirements are the biggest difference between a Conforming loan and a Jumbo loan. Where smaller loans for first-time home buyers require as little as $0 down, Jumbo loans require 10% to 20% down.
3. Capacity – This has to do with what you have for income, what you have for debt, and what your capacity is to pay more debt, like a new mortgage payment. As a rule, you never want to pay more than 50% of your gross income toward debt: This is known as debt-to-income ratio or DTI. Some of the lowest rate jumbo programs restrict the DTI to 45%.
4. Collateral is the property. You have to buy a home that is worth the price you are paying, it has to be in good condition, and it can’t have any health or safety hazards. That’s why you’ll want to have a home inspection and an appraisal before closing on the home.

Find out how much you qualify for as part of the mortgage qualification process. It starts with a phone conversation to discuss your current income and monthly debts. From there, we’ll explain what your best mortgage program choices will be and how much home you can qualify for.  If you’re ready to explore large mortgage qualification, just email me.

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Glimmers of Hope for NH First Time Homebuyers in 2025 21 Jan 2025, 5:13 pm

It’s no secret that first-time home buyers are facing a limited number of homes to choose from and higher home prices. There are a few glimmers of hope for those who are trying to find and qualify for a mortgage.

Get Cash Assistance

First-time homebuyers need better mortgage programs to help make a home purchase affordable. The New Hampshire Housing Finance Authority has down payment assistance that range from $5,000, $10,000, $15,000, $20,000, and even $25,000 as of January 2025. Even with the Down Payment or Cash Assistance, expect to contribute from your own funds a minimum of 1% of the purchase price. There are income limits, purchase limits, and other requirements for these and all other NHHFA programs. Download the PDF with limits here.

Home First Government: Combines New Hampshire Housing with FHA, VA, or Rural Development.  These programs are available with Down Payment Assistance or get a lower interest rate without the assistance!

Home Conventional: Combines New Hampshire Housing with Conventional Financing for more property choices.  Like the Home First Government program, these programs are available with Down Payment Assistance or get a lower interest rate without the assistance!

Home Flex and the Fannie Preferred programs: Combines New Hampshire Housing with FHA, VA, RD, and Conventional with less restrictive income limits.  These programs have Down Payment Assistance like the Home First and Home Conventional Programs.

A lower interest rate and a lower monthly payment with a higher credit scores and more

So much of getting the lowest rate and payment for your situation has to do with positioning yourself for the best possible program. There are several criteria that determine your lowest cost mortgage program, interest rate, and payment.

• How much cash you have to put into the transaction
• The type of property; single family, multi-family, condo
• The term or how long of a mortgage you choose
• Your income-to-debt ratio
• Your credit score

Most people get a 30-year fixed rate mortgage. Generally, you’re going to choose a property and price range based upon your income and savings. That leaves us with your credit score. If your credit score is in the 600s, you can still get a good mortgage program with a government backed or guaranteed program like FHA or VA. If you have a higher credit score, you will have more options for lower rates and discounted mortgage insurance.

Bottom Line: Because interest rates and mortgage insurance costs are tiered based upon credit risk, anything you or we can do to improve your credit score is going to make you new home cost that much less.

If you’d like details on any of these programs or strategies for securing an affordable mortgage, ask here or call us at 603-471-9300.

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VA Loan Limits, Eligibility and Entitlement Explained 21 Jan 2025, 3:50 pm

In this article we offer some answers and clarifications to common questions about VA home loans in New Hampshire.

VA Loan Limits and Purchase Price Limits – What’s the maximum?

The VA does not have a maximum loan amount or purchase price limit. You can borrow a million dollars on a VA loan if you want—assuming you meet the income, credit, cash, and collateral requirements. The size of your loan will likely determine whether you can get a conforming loan and interest rate or if you’ll need a higher interest rate jumbo loan.

I used my VA Eligibility in the past.  Does this impact how much can you borrow?

If you have used your VA eligibility in the past and you have since sold that home, you likely have all your eligibility back and there is no loan limit restriction.

If I have a VA loan now, can you get another one?

If you used your eligibility in the past, you may still own that home.  If so, your eligibility is not yet fully re-instated but you may still qualify for another VA loan.  As a rule, your “remaining entitlement” and any cash down payment may be enough to qualify for another VA loan if they total 25% of the purchase price.

VA Lenders – Who actually loans the money?

The VA doesn’t lend the money to you for your VA loan. The VA only provides a guarantee to the lender that the VA will cover the cost of losses due to default by the veteran.  It’s the VA guarantee that gives the lender confidence to provide 100% financing.  There are several ways to structure a VA loan. We can help identify which program will be right for your situation.

If you are a veteran and believe you meet the eligibility requirements for the VA, please contact Charley at (603) 471-9300 or Apply for VA Loan to get started with guidance on eligibility and information on the latest mortgage rates.

Let us know if you need help calculating what your new VA loan limit might be.

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FHA Loan Limits in NH – 2025 21 Jan 2025, 3:00 pm

Due to the increase in home prices throughout New Hampshire, the Federal Housing Authority (FHA) has increased its maximum loan amount for 2025 to stay in step with homebuyers who need to finance most of the purchase price. The new loan limits for single-family homes in New Hampshire range from $524,225 to $914,250, depending on the county in which a property is located. Two-unit to 4-unit properties have even higher loan limits.

Here are the 2025 loan limits for each NH County:

If you want to know more about the FHA loans in NH or other home loan programs that you might qualify for, feel free to call me at 603-471-9300 or send me an email.

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 First Generation Homeowners: NHHFA Offers Down Payment Assistance – New Program 14 Jun 2023, 2:32 pm

1stGenHomeNH is a new pilot program from the NHHFA that provides $10,000 down payment assistance to be used towards down payment, closing costs and prepaid escrows on a purchase. The grant functions as a $10,000, 4-year forgivable second mortgage. This program is being offered on a first-come, first-served basis on applications dated after June 1, 2023 as funding is limited during the pilot program.  NH Housing reserves the right to suspend or terminate this initiative at any time.

To be eligible the borrowers must:

• Be a first-generation homebuyer
• Be purchasing a single-family primary (1-4 unit) residence in NH
• Complete face-to-face homebuyer education offered through either AHEAD, HOMEteam or the Housing Partnership (minimum 6 hours course).
• Must be used in conjunction with the NH Housing First Mortgage Program

What is a First-Generation Homebuyer?

For purposes of the 1stGenHomeNH Program, first-generation homebuyers are borrowers that do not currently, nor have previously owned a home; their parents/legal guardians do not currently, nor have they previously owned a home in the homebuyer’s lifetime; their non-borrowing spouse (if applicable) does not currently, nor has previously, owned a home. If borrowers were in foster care or legally reside in the United States as refugees or under asylum status granted by USCIS, they also qualify as first-time homebuyers.

*Additional terms and conditions apply. Subject to underwriting approval.

For complete details and to get started on your application, contact Charley by phone at 603-471-9300 or use the form below. Your information will be kept completely private.

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Mortgage Documentation Alternatives for Self-Employed, 1099 Employees, and Non-Traditional Income Earners 5 Jan 2023, 3:47 pm

When you apply for a home loan, we need to document that you have enough income to repay the money you are borrowing. If you are self-employed and your income is tricky to document, there are viable mortgage programs that don’t require traditional tax return documents.

In the past, you may have heard terms like no-doc loans; no income verification mortgages; and stated income loans: all of which are misnomers by today’s standards. These were the programs that contributed to the 2007 and 2008 bond market and real estate crash. Today’s mortgage options include more consumer protections and are more accurately called Alternative Documentation Loan Programs or No Tax Return Mortgage Programs.

No Tax Return Mortgage Programs

Let’s be clear, just because you don’t have to produce a tax return, doesn’t mean you are not documenting your income. Instead of tax returns, you will be providing bank statements, asset statements or 1099s to demonstrate cash flow and your ability to pay back the money you are borrowing. You’ll want to have a good credit score of 680 or higher. Let’s dig a little deeper….

Bank Statement Mortgages

These programs are designed for self-employed borrowers by permitting the use of bank statements in lieu of tax returns. Who is the best fit: Self-employed home buyers who run all of their business income through their business bank statements to easily track their deposits.

We normally collect and review the deposits on 12 to 24 months of personal and/or business bank statements, to determine your cash-flow. This deposit history documents your qualifying income and ability to pay back the amount you are borrowing.

1099 Mortgages

Borrowers who are independent contractors, freelancers, or otherwise self-employed in the “gig economy” may be a good fit for 1099 Mortgages because they normally receive 1099 statements from their clients/employers. We will use 1099s in lieu of tax returns. We normally collect and review 12 to 24 months of 1099s to determine your qualifying income and your ability to pay back the amount you are borrowing.

Asset Qualifier Mortgages

This program is best for home buyers who don’t have enough traditional income to qualify but have lots of savings and investments that can easily be converted to monthly cashflow.

The more technical term is an Asset Depletion Loan. Maybe you have a high net worth but no job. Maybe you are retired. With an Asset Qualifier Mortgage, we use a percentage of your savings and investment accounts as a potential source of income to qualify. Here is an example: If you have $1,000,000 in assets and we divide by 240 month (20 years), that is $4,166 per month that can be used to qualify you for a mortgage.  Note: the net assets use to qualify are less the funds needed to close.

FAQs

Are these programs safe?

If you have the necessary income/ cash-flow to repay the amount you are borrowing, then the mortgage is as safe as documenting your income with a traditional tax return. Regardless of how you document you loan application, it’s important to be truthful with your application so our underwriters can assess your qualifications accurately.

Can I get financing for a home with no income?

Not really! You need income to make your monthly payments unless you have lots of saving to draw against.

What loan does not require proof of income?

Only Asset Qualifier mortgage programs don’t require income. Of course, you’ll need to document you have a high net worth to draw against over an extended period of time.

What is a no-income verification or no-doc mortgage?

No-income verification and no-doc loans have a deservingly bad reputation for contributing to the 2008 real estate market crash. These programs don’t exist the way they once did. Today’s mortgage options include more consumer protections and are more accurately called Alternative Documentation Loan Programs or No Tax Return Mortgage Programs.

Can I get a mortgage if I get paid in cash?

If you get paid in cash and deposit the said cash into your business bank account, then you can use the bank statements to document your income.  You’ll need to verify the existence of your business for at least 2 years.

Can you get a mortgage without a job or a source of income?

If you have enough assets, you can qualify for a mortgage using our Asset Qualifier Program.

How much do I need to make to buy a house?

There is no minimum income requirement to be a homeowner. You need to provide documentation that you have enough income to be able to repay the amount you are borrowing.

What does my credit score need to be?

Every program has its own credit score requirements. On some of our government programs you can have a credit score as low as 600. On alternative documentation loan programs, you’ll want to have a least a 660 middle FICO score.

Are you self-employed and trying to figure out the best way to qualify for a mortgage?  It starts with a phone conversation to discuss your financial details. From there, we’ll explain what your best mortgage program choices will be and how much home you can qualify for.  If you’re ready to explore mortgage qualification, just email me to set up a call.

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How to Qualify for a Jumbo Mortgage in New Hampshire 31 Aug 2022, 5:34 pm

Jumbo mortgages are greater than the Fannie Mae or Freddie Mac conforming loan size which is $726,200 unless you’re in Rockingham or Strafford Counties where the limits are as high as $828,000 in 2023.

Qualifying for a jumbo loan works the same way as a regular conforming loan in the respect that you have to meet program requirements for satisfactory credit, enough liquid savings (cash), enough income to repay the mortgage debt (capacity), and a satisfactory property (collateral).

1. Credit – Most programs require you have a minimum FICO credit score of 640. A higher credit score will put you in a more favorable and lower interest rate program. For an optimum interest rate, work toward getting as close to a 740 FICO as possible.
2. Cash – You need some. The down payment requirements are the biggest difference between a Conforming loan and a Jumbo loan. Where smaller loans for first-time home buyers require as little as $0 down, Jumbo loans require 10% to 20% down.
3. Capacity – This has to do with what you have for income, what you have for debt, and what your capacity is to pay more debt, like a new mortgage payment. As a rule, you never want to pay more than 50% of your gross income toward debt: This is known as debt-to-income ratio or DTI. Some of the lowest rate jumbo programs restrict the DTI to 45%.
4. Collateral is the property. You have to buy a home that is worth the price you are paying, it has to be in good condition, and it can’t have any health or safety hazards. That’s why you’ll want to have a home inspection and an appraisal before closing on the home.

Find out how much you qualify for as part of the mortgage qualification process. It starts with a phone conversation to discuss your current income and monthly debts. From there, we’ll explain what your best mortgage program choices will be and how much home you can qualify for.  If you’re ready to explore jumbo mortgage qualification, just email me.

The post How to Qualify for a Jumbo Mortgage in New Hampshire appeared first on Charley Farley Home Loans.

Getting a Construction Loan to Build or Renovate Your Own Home in NH 2 Aug 2022, 7:01 pm

There are many reasons you might want to take on a construction project rather than buying an existing home: Maybe you already own the property; or you have a very specific custom home plan in mind; or you want to expand the home you live in and already love. Whatever the reason, our construction loan program is designed to help you manage the financial side of your dream project.

How does a construction loan work?

This is an over simplification but the easiest way to think about a construction loan is like a line of credit but with a predetermined disbursement schedule based upon project milestones. Some of the milestones include purchasing the property, site work, foundation, framing, rough electrical and plumbing. These disbursements are designed to pay the builder for the costs incurred at each completed phase of the building project.

Why is a “Construction-to-Permanent” Loan better than a “Double Close”?

Some old-school construction loan programs don’t provide permanent financing after the construction is completed. These are often referred to as “double close” programs because you need to refinance into a new permanent “end” loan after the construction is complete. This refinance process requires the trouble and expense of a second loan application and a second closing. Hence the “double close”.

Construction loan programs have become more consumer friendly over the years with “Construction to Permanent” programs that have many benefits:

• The cost of just one closing rather than two.
• The permanent interest rate is guaranteed at the beginning of the process.
• You don’t have to worry that a job change or some other factor might disqualify you from refinancing out of the construction loan.
• You make interest only payments on the amount you draw during construction. When the home is complete, the payment modifies to a Principal & Interest monthly payment for the full loan amount you have drawn.

The downside to construction loan projects

If you are building a new home or renovating an old one, you’ll need a place to live during the construction period. That means you’ll be making interest payments on the construction loan each month, paying property taxes (and insurance); along with the cost of your current housing.
When you buy and existing or pre-built home, you only pay what you and the seller agreed to. When you are building or renovating a home from scratch there are always unexpected expenses:

• Increased material costs
• Floorplan changes
• Going overbudget on preference items like flooring or appliances.

You’ll need to have cash reserves for these unexpected expenses.

How to qualify for a construction loan

The requirements to qualify for a construction loan are very similar to a regular conventional loan, with the exception that credit scores generally need to be in the upper 600s or even the 700s. Additionally, your debt-to-income ratio will include your current housing expense as well as the anticipated expense for the new home when it’s complete. If you are self-employed or if your circumstances are complicated in other ways, getting pre-approved before entering into an agreement with a contractor is the best course of action. Once the lender has reviewed your income documentation and your credit report, they can let you know how much you can afford to borrow.

Documentation

There is more documentation needed for a construction loan than a regular conventional loan. Aside from the normal documents you would need (paystubs, W2s, tax returns, asset accounts,) you will also need to provide documentation for what you are building. You will need to have a detailed contract with your builder, plans, detailed specifications with a cost breakdown, material specifications, as well as the approved site plan and building permit prior to close.

Should you get a construction loan?

While some of the lending and documentation requirements can seem strict, they will help you in the long run. The documentation requirements don’t just protect the lender. They are there to help ensure that your project stays on budget and schedule for your benefit as well. Our single-close, Construction-to-Permanent Loan Program might be the right option for you to help you create your dream home.

You can learn more about single-close construction loans by downloading this PDF! Construction Loan Program – HarborOne

Feel free to call me at 603-471-9300 or use the form learn how to get a construction loan for your home building project.

This is not a commitment to lend or offer for an extension of credit. Additional terms and conditions apply.

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Mortgages for Self Employed in NH 25 Oct 2021, 8:00 am

If you’re reading this article, you’re probably self-employed and you need mortgage financing to buy a home in NH. You might be right to think it would be easier to qualify for a mortgage if you worked for someone else and had W2 income. A self-employed borrower might require more documentation than a W2 worker, but generally not much more. Usually, it’s nothing more than the documentation you already have just because you need it to run your business!
As a self-employed person, you already work hard and you know how to get things done! I help self-employed people get mortgage financing every day and I can help you, too. Here are the steps.

1)    PROOF OF INCOME. Just like any W-2 borrower, lenders need to determine how much you make and how much of a home and mortgage you qualify for. For a self-employed borrower, that process starts by looking at your 2 most recent tax returns. Help us to help you – show us all pages to your personal and business returns.There are tax deductions on your tax returns that we can add back to your taxable income to help you qualify. As long as your annual income is not decreasing, we’ll average your income over that 2 year period of time.

Depending on the time of year, we may need to see a year-to-date profit and loss statement. The later into the year we are, the more likely we will need to see a profit and loss statement. This also may be requested if the income in the prior two years was inconsistent or if a newer business to confirm your continued profitability. NOTE: There must be two years income from self employment in the same industry/field to use this income to qualify.

Aside from the income documentation, obtaining a home loan for a self-employed borrower is the same for all other borrowers as described in the next three steps.
2)    DEBT TO INCOME RATIO. After we determine how much income you have to qualify, we need to know what you have for personal debt: auto loans, Student loans, credit card debts, RV loans, etc…Child support and alimony that you pay are also considered monthly debts that will reduce your income. Your income will be reduced by your monthly debt to show us what you have available for monthly income to purchase a home. NOTE: If you have a business vehicle with a loan that is paid out of your business checking account each month, or other debts that are paid by the business, we may not have to include those debts in your personal debt ratios. They can be excluded if you can document the business paying for this debt for at least 12 months.

3)    CREDIT. More than any other criteria, your credit score will determine what your interest rate will be. The higher your credit score, the lower the interest rate will be. If you are concerned about your credit history, start by getting your free credit reports from AnnualCreditReport.com. As a rule, you’ll want to have at least 2 FICO scores of 620 or higher. The one thing you can do in the short term to increase your credit score is to keep the balances on your credit cards low. A best practice is to keep balances on your credit cards at 20% or less of the available amount. Don’t close any of your credit card accounts or your credit scores will go down. The longer your credit history, the better! Also, be sure to make payments on time. If you make payments late on credit accounts, this will bring your score down. Collections will also reduce your credit score.

4)    CASH FOR DOWN PAYMENT. More than any other criteria, the amount of cash you have to contribute to the down-payment and closing costs will determine what mortgage program you can participate in. If you’re a Veteran of the Armed Services, you’ll want to consider a $0 down VA loan. If you are buying in a rural area, the $0 down USDA RD program is worth a look. The 3.5% down FHA is also very friendly for self-employed borrowers. If you have 5% or more down, you will want to consider a conventional loan. All of these programs have provisions that allow the Seller to pay some of the closing costs.

Mortgage Fact: Lenders charge the same rates for self-employed borrowers as W-2 borrowers.

DON’T LET YOUR DEDUCTIONS PREVENT YOU FROM QUALIFYING FOR A HOME LOAN!
If you made a million dollars per year on your tax return but had a million dollars in expenses, then you didn’t make anything. Right?!?! Lenders look at net taxable income to determine how much you qualify for. Best Practice – take all your legitimate deductions. Taking questionable deductions will affect your qualifications for a mortgage and the less income you show, the less of a mortgage you qualify for!

I will help you narrow down the options to which programs fits you best. We’ve been helping self-employed home buyers qualify for mortgages for more than 20 years. Call me at 603-471-9300 or send an email.

 
Watch this three-minute video with Charley’s top tips for qualifying for a mortgage when you’re self-employed.

Your information will be kept completely private.

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Getting a Loan When You’re Self-Employed 24 Oct 2021, 10:03 pm

Being self-employed brings its own challenges when you’re applying for a mortgage. Mortgage lenders underwrite their loans based on standard guidelines that have been established by Fannie Mae, the FHA, or the VA.

Self-employed borrowers are often considered riskier than other types of mortgage loan applicants. Consequently, they frequently receive closer scrutiny than do salaried borrowers. For example:

• Self employed borrowers must demonstrate two or more years of self employment, while salaried borrowers can often get mortgages while they are transitioning to a new job.
• The electronic underwriting systems used for Fannie Mae and Freddie Mac programs require higher credit scores for self employed borrowers.
• The reserve requirements for self employed borrowers are more strictly interpreted.Self employed borrowers are qualified on their average income over the last two to three years, whereas salaried borrowers are qualified on their current income (which is usually higher than an average).

So often, the financial records of the self-employed borrower don’t reflect their true business success or their ability to repay a mortgage loan. We have number of underwriting techniques and loan programs designed for self employed borrowers:

If you’re self employed and are concerned about your ability to qualify for a mortgage, don’t wait until after you’ve fallen in love with a home – get pre-approved now. It starts with a 10 minute phone conversation and it could save you thousands of dollars.

If you’re self-employed and would like to qualify for a mortgage, call Charley Farley at (603) 471-9300 or e-mail.

Watch this three-minute video with Charley’s top tips for qualifying for a mortgage when you’re self-employed.

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