Boston Homebuyers: 4 Important Things to Consider When Getting a Mortgage

Getting your Boston, MA home financed

Boston Mortgage Information

While there are buyers in today’s market that are able to pay cash for their Boston homes, the majority will be seeking mortgage loans to finance their purchases. Mortgages, however, can be incredibly confusing. There are so many types of loans and so much terminology that goes along with them, not to mention the tedious process of securing a loan. As a Boston homebuyer, here are 4 important things to consider when getting a mortgage.

Research loan types, and make sure to get the right one for you.

There are many loan options, and the one that will work for you will be based on your personal situation. A few types that you commonly hear are fixed-rate, adjustable-rate, 80/20, FHA, and balloon. Depending on your life and financial situation when purchasing the home, there will be pluses and minus to each. Spend some time on the internet researching your choices, and find a reputable lender for more guidance once you are ready to start looking for a home.

Take all monthly expenses associated with homeownership into account when determining how much mortgage you can afford.

Be sure to consider all of the monthly costs that you will need to afford beyond principal and interest. Depending on your loan type and the amount of downpayment that you apply to your mortgage, you may have monthly mortgage insurance premiums that will be paid along with your mortgage payment. If you choose to escrow your real-estate taxes, those too will be included in the payment. In addition, monthly utility, maintenance, homeowners association costs will also need to be considered.  By ensuring that you're looking at the whole picture of all of the expenses involved in owning a home, you will be able to prevent financial hardship later.

There is a difference between being “pre-qualified” and “pre-approved”.

Being pre-qualified means that based on financial picture you provide, the lender will estimate the amount of mortgage for which you should be able to qualify and afford. Getting pre-approved is a much more involved process. Your credit will be thoroughly analyzed, you will be asked for financial documentation, and you will be told the exact dollar amount that you will be able to borrow. Obviously, this will be contingent on your current financial and credit situation remaining the same all the way through your closing. In today’s market, getting pre-qualified for your mortgage will give you a leg up on buyers who have not done so. Since you’ll have to go through the process at some point anyway, you might as well do it early on.

Be sure to review and understand your closing costs.

There is a long list of fees associated with your closing costs. Both your lender and realtor can help you understand what all of those fees are covering. The day before your closing, you will be able to review your HUD 1 Settlement Statement. Review it carefully, and ask questions. Closing costs can amount to anywhere from 3-7% of the total purchase price of your home, so it’s important to feel confident that everything is correct.

As a long-time Boston, MA realtor, I have worked with many who’ve had to secure financing for their home. Since it is such an involved process, it’s important to start it early in your home search and enlist the help of professionals to walk you through it. With all of the Boston homebuyers with which I’ve worked, I’ve found that these 4 things are some of the most important to consider when getting a mortgage. If you would like more information about purchasing a home in the Boston area, please contact me. It would be my pleasure to assist your find the home of your dreams!

Patti Fine

Phone: 617-642-7585
Email: pf@pattifine.com

Patti Fine Real Estate

Greater Boston Area Homes

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Get the Best Mortgage Rate as a Boston, MA Homebuyer!

As your Boston real estate agent, it’s my job to keep you updated on the most current and significant news in real estate. Lately, news has been focused on rising mortgage rates in the past couple of weeks. Interest rates for a 30-year mortgage rose from 3.56 percent to 4.29 percent and then to 4.51 percent.

So, what does this mean for you as a Boston homebuyer? It means that the sooner you buy a Boston home, the less you’ll pay in interest and in your monthly mortgage payments! Better Homes and Gardens Real Estate shared an infographic that shows you just how much more you’ll be paying per month, depending on the price of the house and the mortgage rate.

As you can see, the price quickly increases each month as the mortgage rate rises. No one knows for sure how fast or how high they will continue to rise, but KCM Crew estimated that they’ll level off between 4 and 5 percent. Although, other experts have predicted they’ll rise up to 6.5 percent.

 

Now that you know this, there is still good news about buying a Boston home right now! Here is what The Fiscal Times shared recently:

• As mortgage rates rise, lenders might ease up on their mortgage standards, giving you more of a chance to obtain a mortgage loan. 

• Inventory is starting to rise, so you have more options in the Boston real estate market.

• Investors are starting to leave the market, also giving you more options. 

• Buying is still cheaper than renting. 

• Mortgage rates are still low by historical standards. The average interest rate for a 30-year mortgage was once 8 percent! Anything below 5 percent was considered a gift.

When applying for a mortgage, what can you do to ensure the lowest possible rate? Here’s what I would recommend:

• Improve your credit score. You can do this by paying down debt, paying bills on time, not opening new lines of credit and paying off credit cards, but leaving them open. 

• Increase your down payment. Consider getting another job or moving back home or in with a roommate to save money. Make lifestyle changes, like brewing coffee at home and brown-bagging your lunches!

• Consider your options with loan lengths. Shorter term loans, such as 15 or 20-year loans, have lower interest rates than 30-year mortgages.

If you have questions or you’re ready to buy a Boston home, contact me, your Boston real estate agent! I am eager to help you achieve this exciting milestone!

Patti Fine
Phone: 617-642-7585
Email: pf@pattifine.com
Patti Fine Real Estate
Greater Boston Area Homes
Search Greater Boston Area Homes

Tips for Buying A Boston Home In a Tight Market

It’s no secret that the Boston real estate market is tight for Boston homebuyers right now. Home prices are rising and many Boston home sellers are holding out. At the same time, buyer demand is high because mortgage rates are still near historic rates. 

How can you ensure a successful home purchase in a market with limited availability? Here, I’ve laid out a few rules to follow. In any case, contact me, your Boston real estate agent. This is not a time to be going it alone! 

1.  Find out how much you can afford in a home. This step is vital, and you should do it before you even start your home search. Look over your revenue and expenses and find out how much money you have to work with. 

·         How much do you have saved up for a down payment?

·         How much income do you have to work with monthly for mortgage payments?

·         How much will you have left for your homeowner’s insurance and property tax expenses?

·         How much will you have left for electric, water and energy bills?

The cost of a home is about more than your initial payment and your monthly mortgage. Also, if something goes wrong with the house, you need to pay for it, such as a new water heater, furnace, lawn mower or roof repairs. You really need to have a good idea of how much you have to work with and what you can really afford.

2.  Apply for a mortgage loan. Getting pre-approved for a mortgage is one of the best first steps you can take as a Boston homebuyer. When Boston home sellers receive multiple offers, it’s common for them to not even consider a buyer who isn’t pre-approved. Plus, this will help you determine what your price range is, so we can narrow your search.

3.  Stay current and knowledgeable about the Boston real estate market. It’s important to know what homes in your price range are being listed for and what they’re selling for, and how fast. This will help you determine how fast you need to make an offer and a ballpark figure of how much. Of course, having a Boston real estate agent will help a lot with this information! 

4.  Remain patient. There is a good chance that once you begin your home search, you might find a home you love that you need to bid for. You might lose. Don’t become discouraged. In a seller’s market, it might take some time for you to both find a home you love and have your offer accepted by the seller. As your Boston real estate agent, I’m here to help!

5.  Remember what you can afford. It’d be easy to get agitated and make an offer that is out of your league, or to purchase a house that needs a lot of repairs. It’s important to stick with what you need, what you want and what you can afford. This will be your home for many years to come, you have to love it and not regret it down the road!

As your Boston real estate agent, I am here for you every step of the way, as a book of knowledge and experience, as an advocate, and as a support system. Contact me with questions or to get started in the home-buying process!

Patti Fine
Phone: 617-642-7585
Email: pf@pattifine.com
Patti Fine Real Estate
Greater Boston Area Homes
Search Greater Boston Area Homes

Get Accepted for a Boston Mortgage Loan!

In the Boston Real Estate market, I’m sure you’ve heard that long-term mortgage loan rates are lower than ever right now. Because of this, the cost of owning a Boston home is lower than it has been for decades! If there was ever a time to buy a home in Boston, it’s now, while rates are low and predictions are saying the market will improve soon.

However, just because mortgage loans are cheap doesn’t mean they’re a cinch to get. Mortgage lenders have tightened their belts in recent years, mainly due to foreclosure numbers.

As your Boston Real Estate agent, I want to ensure that you are still able to buy the Boston home of your dreams! For you, this means learning how to become a savvy borrower. You can start by reading the mortgage tips for 2012 Boston homebuyers, provided by a MSN Real Estate article.

I summed up the best points for you here:

· Know your credit score. Before applying for a loan, you need to be familiar with your credit and if it’ll comply with the guidelines of major mortgage lenders. Most lenders would like to see a minimum credit score of 680, and most won’t accept one under 620.

· Have the information ready. The more prepared you are, the quicker the process will go. Before you head to the lender’s office, have your last two pay stubs, W-2s, income-tax returns and bank statements organized in a folder.

· Shop around. Use a mortgage calculator to decipher how much of a mortgage you can afford before you find out how much of a loan you can get. You don’t want to just accept the highest loan possible. Then, get estimates from three banks and three mortgage brokers before deciding on one. Consider rates, closing costs and the type of loan being offered.

· Continue financial stability. Don’t think that once your information is sent to the lender, you can go rack up your credit card bills. Most lenders will pull your credit again before the loan closes. Plan ahead financially so that you have money set aside to live off of during the process.

· Explain any monetary gifts you receive. If a relative offers money toward your down payment, that’s fine, but documentation, a signed letter and a paper trail will be needed. Also, most lenders require at least five percent of the down payment to come from your own funds, so plan accordingly.

· Don’t give up. You need to shop around so that if one lender rejects your application, you have hope with another. Ask the lender why you were rejected so you can fix the problem or shop for a new lender. Don’t automatically assume you’re a hopeless case!

If you have more questions, I’d be happy to try to answer them as your Boston Real Estate agent! I want you to succeed in buying a home of your dreams in the Boston Real Estate market.

Once you succeed past the first step of receiving a mortgage loan, we can begin the process of finding a Boston home in your budget. Contact me when you’re ready to get started!

Patti Fine
Phone: 617-642-7585
Email: pf@pattifine.com
Patti Fine Real Estate
Greater Boston Area Homes
Search Greater Boston Area Homes