Buying A House In Maine: Where, When, Why And How

With charming towns, scenic coastal sunsets and almost 90% forest coverage over the state, it’s no surprise how enticing the thought of buying a house in Maine can be. But before you pack the moving truck and head out to put down roots in the Pine Tree State, make sure you learn more about the area and if it’s the right place for you.

According to U.S. News & World Report, Maine ranks #1 in public safety and #2 in overall crime and corrections. In addition to feeling safe, residents often experience a higher quality of life, with an abundance of natural beauty and recreational activities available. Along with beaches, forests and mountains, Maine also features historical parks, wineries, museums, lighthouses, quiet rural areas and bustling cities. With everything the state has to offer, purchasing Maine real estate can be a solid investment.

If you’re wondering where to move, start with this list of the Rocket Homes^SM five best places to buy a home in Maine.

Portland

Population: 66,803

Median income: $45,865

Median home price: $434,800

Average commute: 19 minutes

Portland is a small city with big-city amenities and much to do along the 3-mile peninsula and on its islands. With cobblestone streets and 19th-century architecture, Portland preserves its history and character while hosting trendy microbreweries, hip art galleries and a diverse dining scene dedicated to using sustainable and locally sourced ingredients. Among the sights you’ll see in Portland are working fishing docks and Victorian mansions along with rivers, mountains, lighthouses and stunning sunsets.

See Portland real estate listings.

Mount Desert

Population: 2,114

Median income: $63,485

Median home price: $659,700

Average commute: 23 minutes

Don’t let the name fool you. Like many towns in Maine, Mount Desert is surrounded, mostly, by water. In fact, it’s on an island – Mount Desert Island – off the coast of Maine. Located in the middle third of the island, Mount Desert provides several natural wonders to enjoy, from a waterfall peeking through the arch of a stone bridge to a botanical park filled with vibrant azaleas. Mount Desert also hosts lakes, ponds and mountain summits with panoramic views. Along with that, Acadia National Park offers hiking, climbing, boating, biking, swimming and stargazing – to name just a few activities.

View Mount Desert real estate listings.

Belfast

Population: 6,708

Median income: $34,205

Median home price: $233,300

Average commute: 26 minutes

Ranking high in affordability and safety, Belfast is a popular choice for families and is often listed as one of the top three best places to retire in Maine. This seaside town offers many amenities, including unique shops, farmer’s markets, galleries and locally owned restaurants featuring fresh-caught fish and farm-to-table dishes. Residents can enjoy walking through the historic downtown area, hiking in the state parks, sailing on the water or enjoying a harbor walk.

Check out Belfast real estate listings.

Rockport

Population: 3,389

Median income: $62,115

Median home price: $377,700

Average commute: 17 minutes

Rockport is known for its picturesque setting, which put the small harbor town on the Forbes list of “America’s Prettiest Towns.” It’s also known for supplying the U.S. Capitol Building with much of its limestone during its rebuild and for being home to Andre the Seal, who had a children’s book and a movie made about him. Residents of the town today enjoy exploring the harbor on boats and kayaks, participating in community events and shopping at local boutiques. Rockport is also home to several top-rated schools for children.

View Rockport real estate listings.

Brunswick

Population: 20,619

Median income: $55,833

Median home price: $379,900

Average commute: 20 minutes

Brunswick is the home of Maine’s first college, Bowdoin College, which supplies the city with a theater, concert hall, museums and an international music festival. Other highlights include a walkable downtown area, a bike path, natural trails and many open spaces to enjoy the outdoors. Designated a “National Main Street,” the college town also has a booming arts and entertainment scene. When residents want to escape for the weekend, the Amtrak station just outside of downtown makes a trip to Boston a breeze.

See Brunswick real estate listings.

The requirements in Maine are pretty standard when it comes to buying a house. Here are a few things you’ll need.

• Good credit: If you’re going to finance your purchase, you’ll typically need a credit score of at least 580 for an Federal Housing Administration (FHA) loan or 620 for a conventional loan.
• Low debt-to-income ratio (DTI): Your DTI tells lenders how much you spend on debts versus how much income you have. If your DTI is too high, lenders may see you as a risk because you may not be able to pay your bills. The max DTI for FHA loans in Maine is 57%, while conventional loans in Maine have a max DTI of 50%.
• Financial documentation: You’ll need to demonstrate that you have a stable income and enough money to handle the financial obligations of the loan. To help prove this, you’ll be required to provide financial documents such as tax returns, W-2 statements, paycheck stubs and bank statements.
• Home appraisal: Because appraisals reflect the market value of the home – which could be different from the sale price – your home appraisal will tell you and your lender whether you’re making a good investment on the home.

An appraisal is also important because the sale could depend on the appraisal’s outcome. The lender cannot loan more than the appraised value of the home, so if the appraisal comes in too low, you’ll either need to pay the difference out of pocket, negotiate the sale price down or find a different home.

• Down payment: Most loans require a down payment – which is a percentage of your home’s purchase price – because it tells the lender you’re serious about owning a home and allows them to take less risk. It also means you’ll borrow less money and have some equity in the home.

The required down payment will depend on the type of loan you’re getting, your credit score, your DTI and your lender’s specific requirements. Typically, down payment requirements start around 3.5%. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) loans require a 0% down payment, but there are certain requirements for those loans. If you make a down payment of at least 20% on FHA or conventional loans, you’ll avoid having to pay mortgage insurance.

Many first-time home buyer programs – such as VA loans, FHA loans and USDA loans – are available across the United States. Maine also offers a few specific programs for individuals buying homes in the state through the Maine State Housing Authority – also known as MaineHousing. These programs include the following:

First Home Loan

In an effort to make owning a home easier and more affordable, MaineHousing offers qualifying first-time home buyers the First Home Loan program. The program features little or no down payment requirements and low fixed interest rates.

To qualify, you must be a first-time home buyer or not have owned a home for the past 3 years. You must also meet the household income requirement, have a good credit history and a minimum credit score of 640. Your monthly mortgage payment must also stay below 30% – 33% of your income.

Those participating in the First Home Loan program may receive additional assistance by also using the Salute ME and Advantage programs, listed below.

Salute ME

Veterans, active duty military members and retired military personnel who are participating in the First Home Loan program can use Salute ME to receive a 0.25% discount on the loan’s interest rate.

Advantage

Advantage provides up to $3,500 for borrowers participating in the First Home Loan or Salute ME programs. This money can be used towards a down payment or closing costs assistance. Borrowers must take a home buyer education class and contribute at least 1% of the loan amount towards these costs.

MaineHOPE

Participants of any of the above programs will also have payment protection for unemployment. This program, called MaineHOPE, helps borrowers pay four mortgage payments – including taxes and homeowners insurance – if they become involuntarily unemployed. The assistance is considered a junior mortgage lien that doesn’t collect interest and must be repaid once the home is no longer a primary residence.

Timing the housing market can be important in getting a good deal on a home. For example, when interest rates are low, demand increases and supply decreases, driving up housing prices and resulting in a booming housing market in which you’ll need to be competitive as a buyer.

In general, though, the Maine real estate market, like the U.S. housing market as a whole, tends to fluctuate seasonally. When this happens, the best time to buy is typically in the winter. More specifically, you can expect lower listing prices and higher inventory in January, when sales tend to slow down.

Keep an eye on the market in the area where you plan to purchase and chat with your real estate agent to decide when it’s the right time to buy.

No matter where you move, you’ll need to consider the area’s unique characteristics that could affect your lifestyle and your home. Maine is no different. Before making an offer on a house without seeing it, make sure you know these things about buying a house in Maine.

• Some places in Maine are prone to flooding, due to coastal storms, ice jams and heavy rains in the spring. You may need to get flood insurance if you’re buying near a flood zone.
• Maine gets cold winter weather that includes snow and ice – and right on the coast can get pretty brutal.
• Maine has plenty of waterfront properties, but they come with higher property taxes and, for some homes, strict regulations along with certain inspections required by the state.
• You’ll want to check the internet connections and strength of the area you’re considering. While many areas in Maine have internet service, there is a digital divide within the state. Some areas have much slower speeds, while others don’t have internet access at all.

Whether you enjoy exploring the outdoors or taking in breathtaking views from inside, Maine has something for almost any lifestyle. From rural areas and cities to the quaint and coastal towns in between, you’ll be able to find your home if you do your research and plan ahead.

Of course, the best way to ensure a smooth home buying process is to work with a Rocket Homes Verified Partner Agent, who’s an expert in the area and knows all the best tips and tricks when it comes to buying a house in Maine the right way.

*A number of the statistics in each listing were sourced from data from BestPlaces.net, including population, median income, median home price and average commute.