New Hampshire is a state in the northeastern part of the United States. It only borders four states: Maine, Massachusetts, Vermont, and New York but is also connected to Canada. The capital is Concord, and the largest city is Manchester. You are probably not surprised to learn that it’s the fifth smallest by area and the tenth least populous with only 1.4 million people.
What New Hampshire may lack in size and population, it definitely makes up for it in terms of wealth. The median price for a home in the state is $395,000 according to the New Hampshire Realtors Association.
When looking to create a perfect property, there are many options available. You might consider tapping in to home equity, credit cards, refinancing for a remodel, pulling money from money market funds, or applying for a traditional mortgage loan amount. However, for many people, these are not the only options with home loans to get your perfect property. Turning to home construction loans might be the right answer for helping you get your dream home. This allows you to work with home builders to upgrade your property to the level you need and want.
Many people are turning towards construction loans because they want something that will give them more flexibility than buying an existing home. Real estate experts in the state told us that the cost to build a home in New Hampshire is approximately $120 to $160 per square foot for standard grade construction, making it on the higher end of the spectrum.
A construction loan allows you to access that money upfront and pay it off slowly over time like a traditional mortgage.
There are also some other benefits associated with getting a New Hampshire construction loan; let’s take a look at those now so that you can decide if this might be the right option for you and your family.
Benefits of a new construction loan in New Hampshire
New construction loans are a great way to make your home dreams a reality. They can be used for new homes, additions to existing homes, and the purchase of raw land with plans to build a home on it. Plus, there are several benefits to getting a new construction loan over other types of home financing.
First, you’ll get to enjoy the excitement of building your dream home from the ground up. You can be involved in every step of the process, from choosing your lot or building site to picking out flooring and countertops. You’ll be able to see your vision come alive as you watch your house take shape.
Second, owning a new home means fewer repairs or renovations are needed during the early years of owning the home since you’ll be the first family to live in the home.
Third, if you’re looking at buying land without a house already built on it, then this type of loan is perfect for financing both structures together instead of having two separate loans, which can increase your transaction fees and closing costs.
5 Best banks in New Hampshire offering construction loans
If you’re in the market for building or renovating a home in New Hampshire, consider these construction mortgage loans that are available to state residents.
1. TD Bank
TD Bank is one of the largest banks in the country with over $600 billion in assets, making it the sixth-largest by deposits in the United States. Not surprisingly, TD Bank has a robust construction loan product and should be one that you consider before making your ultimate decision.
We spoke to a TD Bank loan officer who personally closed over $300 million of mortgages last year to learn more about the TD Bank construction loan program. Here are the details:
- 720-740 FICO score desired
- 20% down required on loans up to 1.5M
- 30% down required on loans up to 3M
- One-time close
- Primary or secondary homes are eligible
- Fixed rate and ARMs are available
- Purchased lot considered in the down payment
- No pre-payment penalties
- Interest rate locked before construction begins
- If land has been owned for at least 6 months, we will lend up to 80% of the appraised value of the entire project.
- If land has not been owned for at least 6 months, we will lend up to 80% of the land acquisition cost+cost of construction
- No Condos or Co-Ops. No investment properties.
If you’re interested in connecting directly with a loan officer at TD Bank that specializes in construction loans, we can put you in touch with them directly.
2. Northeast Credit Union
Northeast Credit Union is a community credit union in New Hampshire that focuses on the financial independence of its members. The credit union does business in both New Hampshire and Maine and provides a wide range of financial products, including construction loans.
We reached out to Northeast Credit Union to learn more about their construction loan product. They have a fantastic low down payment option that is worth nothing, along with the following details:
- Single Family or Multi-Family Home
- Borrow Up to 95% Loan-to-Value*
- Single, Fixed-Rate Mortgage
- Interest-Only Payments During Construction Period
If you’re interested in connecting directly with a loan officer at Northeast Credit Union that specializes in construction loans, we can put you in touch with them directly.
3. Wintrust Mortgage
Wintrust Mortgage is one of the top 20 bank-owned retail mortgage originators in the country that originates in excess of $4 billion in loans annually in all 50 states.
Recently we asked Wintrust Mortgage to provide us with details on their construction loan and this is what they said:
- One-Time Closing. Only pay the closing cost once
- Lock in your rate upfront and avoid interest rate risk
- FHA, VA, and Conventional options
- 0% Down up to $822,375 (VA ONLY)
- 3.5% Down up to FHA County Limits ($356,362-822,375)
- 10% Down on Second homes
- FICO 680+
- Loans must include building no Lot/Land Loans
- Maximum of 10-acres per build site
- Stick Built and Modular Homes ONLY
- NO log homes or metal homes (barndominium)
- Tear Down and Rebuilds do qualify
- No self-build or owner builders. The builder must be approved.
- Does Not allow ADUs (Accessory Dwelling Unit – Granny Flat/Garage Conversions/Basement)
- Now lending in all 50 States
If you’re interested in connecting directly with a loan officer at Wintrust Mortgage that specializes in construction loans, we can put you in touch with them directly.
4. Triangle Credit Union
Triangle Credit Union is a member-owned and not-for-profit institution started in 1939 serving the New Hampshire area. The credit union has over $800 million in assets and supports more than 57,000 members, including those that want to build or renovate a home using a construction loan.
We contacted Triangle Credit Union to learn more about the construction loan they offer and here’s what we found:
- Land and construction-to-permanent loans available
- Fixed construction interest rate for 6 months
- Only one set of closing costs
- Ability to prepay without penalty
- Guidance from an experienced Credit Union representative to help you navigate the financing details
- Property must be a one-unit, single family detached home
- Maximum 80% Loan-To-Value on collateral at any time during the process
If you’re interested in connecting directly with a loan officer at Triangle Credit Union that specializes in construction loans, we can put you in touch with them directly.
5. Claremont Savings Bank
Claremont Savings Bank traces its roots back to 1907 in Claremont, New Hampshire where local depositors put together the mutual savings bank that exists today. As a mutual savings bank, the bank is owned by its customers allowing it to keep costs low. They are also a portfolio lender, meaning that the loans are kept on the balance sheet of the bank, including their construction loan.
We wanted to learn more about Claremont Savings Bank’s construction loan, so we reached out to get the following details:
- Qualifying for a construction loan can be more challenging but the bank will walk you through the process and review your credit history and your debt-to-income ratio (this includes mortgage payment, estimated property taxes, Homeowners Insurance and any Association fees) to ensure affordability.
- Construction-to-permanent loans
- Only pay interest on outstanding loan balance during construction phase
- Loan balance converts into a permanent mortgage upon completion of construction
- Lock mortgage rate at beginning of construction
- Typically a 20% down payment is required to begin construction (lower down payment options may be available)
- May be able to use land value toward down payment
- One set of closing costs and fees
If you’re interested in connecting directly with a loan officer at Claremont Savings Bank that specializes in construction loans, we can put you in touch with them directly.
Should you pursue a New Hampshire construction loan?
A construction loan is a type of mortgage that allows you to finance the construction of a new home. Here are a couple things to consider:
First, do you have enough cash on hand to pay all of the costs associated with buying or building a new home (or making significant improvements)? If you do not, then it may make sense to consider getting financing through a construction loan so that you can spread out the costs over time instead of paying them all upfront.
Second, would you like to take advantage of low-interest rates while also having more control over when you pay off your debt than traditional loans offer? Construction loans allow borrowers more flexibility with monthly interest-only payments during the construction.
If you’re looking to explore construction loans in other states, check out our national guide to construction loans and get started exploring all 50 states.
Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.