Mortgage

North Dakota 2022 Mortgage Borrowing Limits

North Dakota 2022 Mortgage Borrowing Limits
Written by Publishing Team

  • You can borrow up to $647,200 for a matching mortgage in North Dakota, or $420,680 for an FHA mortgage.
  • To borrow more than $647,200, you must apply for a massive mortgage, which requires stricter eligibility requirements.
  • Your choice between a matching mortgage or an FHA may depend on your credit score, debt, or insurance costs.
  • Check out today’s mortgage and refinancing rates in North Dakota on Insider.

Choosing the type of mortgage to get is fairly simple in North Dakota.

The Federal Housing Finance Agency sets borrowing limits for matching mortgages, and the Federal Housing Administration sets limits for federal housing loans.

Borrowing limits for both types of mortgages are the same in every North Dakota county. For a single-family home, the matching mortgage limit is $647,200, and the maximum Federal Housing Loan is $420,680.

How do you decide what type of mortgage is best for you?

Matching mortgages usually require a credit score of at least 620. Some lenders allow a debt-to-income ratio as high as 50%, but others require a ratio as low as 36%.

The down payment requirements for matching mortgage loans and FHA loans are similar. You’ll need at least 3% for a matching mortgage and 3.5% for an FHA mortgage. If you don’t have a credit score or a DTI ratio to qualify for a matching mortgage, though, an FHA mortgage is the obvious choice between the two. You qualify for a credit score as low as 580 or even 500 if you have a 10% down payment. Most lenders also accept a high DTI rate of 43%.

If you qualify for both a matching mortgage and an FHA, your choice may come down to insurance costs.

“The FHA has what’s called an advance MIP, or advance mortgage insurance premium,” says Darren Keogh English, chief community development loan officer at Quontic Bank. “You don’t actually pay out of pocket to fund this MIP, but it is added to the loan amount. When you receive a closing statement or loan estimate, you will see that there will be a measurement of your loan amount, then there will be an adjusted loan amount that will add the MIP amount up front.”

Matching mortgages charge something called private mortgage insurance (PMI) if you file less than 20% less. But the lender cancels the PMI once you have 22% of the equity in your home, and you can even ask to cancel it early when you reach 20% of the equity. With an FHA mortgage, you have to pay the MPI for the life of your loan.

English explains that there is one major exception to this rule. If you make a down payment of 10% on an FHA mortgage, your MPI will be canceled in the eleventh year of the loan.

If you are not sure what type of mortgage is most appropriate, contact your mortgage lender to speak with a loan officer. Ask any questions about their differences, the pros and cons, and which one is best for your situation.

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