Really getting the ball rolling with purchasing your first home is both incredibly exciting and stressful. And financing that purchase is often one of the first steps, which will help you understand your price range and start setting proper expectations.
To start on the right path, here are 5 of the best programs for first-time buyers in Boston:
One of the more common types of first-time homebuyer lending is the FHA loan.
An FHA loan is a specific type of loan you can get exclusively through a mortgage lender qualified and approved by the United States Federal Housing Administration. FHA loans are built for first-time homebuyers, requiring a minimum of 3.5% down and a credit score of at least 580. If your credit score falls below that, a higher down payment will be required of you, up to a new minimum of 10% down.
These lowered down payment and credit score conditions help younger first-time buyers in Boston by crossing the threshold into loan approval, and starting on their road to financial independence and home ownership.
Another financing route to take as a first time homebuyer is to apply for a Renovation Loan.
This normally happens if you’re looking to purchase a distressed or foreclosed property that is in need of substantial revitalization. Renovation loans are structured to lend you the amount for the purchase of the property along with an amount to accomplish any agreed-upon repairs and updates.
This means that your loan principal will be substantially higher than the agreed purchase price of the home. Keep this in mind – and budget appropriately – before signing on the dotted line.
If you’re a U.S. military service member or veteran, you likely qualify for a generous loan through the United States Department of Veterans Affairs.
Like the FHA and USDA loans, VA loans are acquired through an approved private lender.
Extremely helpful are the loan qualifications – VA loans require no money down, have incredibly low-interest rates, and do not require Private Mortgage Insurance at any point throughout the lifetime of the loan.
If you qualify for a VA loan, it’s likely that it will always be your best option for mortgage financing.
Take care when selecting your mortgage lender when applying for a VA loan. Quite a few less reputable organizations have emerged, attempting to appear as VA-approved lenders to lure in the large amount of servicemen and servicewomen who are first-time buyers in Boston.
STATE AND LOCAL PROGRAMS
Finally, most states have first-time homebuyer programs, and the details of these can be found on their individual state websites. Below are links to the programs for Massachusetts and New Hampshire, both states where NextHome Titletown Real Estate operates.
Boston has a new program called ONE+Boston, which is definitely worth reviewing.
The goal of ONE+Boston is to increase homeownership and all of the benefits that go along with owning property by amplifying the purchasing power of first-time Boston homebuyers who are income-eligible. There are a number of qualifications for the ONE+Boston Mortgage program, such as income and residency. See the full list here.
It’s also worth contacting the local municipality in which you’re purchasing in order to find out if there are any first-time homebuyer benefits of which you could take advantage. Many communities actively promote home ownership and redevelopment. For example, here are links to the programs for the City of Brockton, the City of Lowell, and the City of Somerville.
A USDA loan is similar to an FHA loan in that it is backed by a department of the federal government, but this time that department is the United States Department of Agriculture.
USDA loans are designed to help fund and improve rural and suburban areas of the United States. It’s very uncommon to qualify for a USDA loan in a large, metropolitan area, but it’s always worth looking into any possibility local to your chosen destination and its surrounding area.
USDA loans require no money down, have very low credit score requirements, and then focus on household income to determine your level of loan qualification. These income guidelines vary by geography, so it’s a good idea to do some research through the USDA website prior to applying.
Help for First Time Buyers in Boston
Financing can be confusing for first-time buyers in Boston, but at NextHome Titletown Real Estate, we have tons of experience working with first-time buyers and helping navigate the potentially confusing programs available to you! Don’t spend your time getting frustrated – Contact us today at (617) 657-9811!
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