- You can borrow up to $647,200 for a conforming mortgage in North Dakota, or $420,680 for an FHA mortgage.
- To borrow more than $647,200, you must apply for a jumbo mortgage, which has stricter eligibility requirements.
- Your choice between a conforming or FHA mortgage may depend on credit score, debt, or insurance costs.
- See today’s mortgage and refinance rates in North Dakota on Insider.
Choosing which type of mortgage to get is fairly straightforward in North Dakota.
The Federal Housing Finance Agency sets borrowing limits for conforming mortgages, and the Federal Housing Administration sets limits for FHA mortgages.
Borrowing limits for both types of mortgages are the same in every North Dakota county. For a single-family home, the conforming-mortgage limit is $647,200, and the FHA limit is $420,680.
How to determine which type of mortgage is best for you
Conforming mortgages typically require a minimum 620 credit score. Some lenders allow a debt-to-income ratio of up to 50%, but others require one as low as 36%.
The down payment requirements for conforming and FHA mortgages are similar. You’ll need at least 3% for a conforming mortgage and 3.5% for an FHA mortgage. If you don’t have the credit score or DTI ratio to qualify for a conforming mortgage, though, an FHA mortgage is the clear choice between the two. You’re eligible with a credit score as low as 580, or even 500 if you have a 10% down payment. Most lenders also accept a DTI ratio as high as 43%.
If you qualify for both a conforming and FHA mortgage, your choice could come down to insurance costs.
“FHA has something called upfront MIP, or upfront mortgage insurance premium,” says Darrin Q. English, senior community development loan officer at Quontic Bank. “You don’t actually pay out of pocket for the financing of that MIP, but it is added to the loan amount. When you receive a closing disclosure or loan estimate, you’ll see that there will be a measurement of your loan amount, then there will be an adjusted loan amount that will add in that upfront MIP.”
Conforming mortgages charge something called private mortgage insurance (PMI) if you place less than 20% down. But the lender cancels PMI once you gain 22% equity in your home, and you can even request to cancel it early when you reach 20% equity. With an FHA mortgage, you have to pay MPI for the entire life of your loan.
There is one major exception to this rule, English explains. If you make a 10% down payment on an FHA mortgage, your MPI will be cancelled in the eleventh year of your loan.
If you’re unsure about which type of mortgage is the best fit, contact a mortgage lender to speak with a loan officer. Ask any questions about their differences, the pros and cons, and which is better for your situation.