Boston Condo Buyers And Mortgages

Boston Condos for Sale and Apartments for Rent

Boston condo buyers and mortgages

Preapproved Boston condo buyers are often tempted to shop for homes that are just within reach of the mortgage allowance approved by their lender. However, Boston condo agents say it might be wiser for buyers to set themselves a limit below the maximum amount allowed by their lender.

home buying budget — Boston condos for sale

Look for Boston condos for sale below your approval

In other words, they recommend buyers look at homes perhaps $5,000 to $10,000, or even lower than their maximum approved price range. They say with today’s housing market being so competitive, it’s practically a given that buyers will need room to up their bid to compete with other offers.

“These days, houses are selling for more than their list price and, as a buyer, you’re more than likely going to end up in a bidding war,” said Lori Ozley, a manager with Birmingham HomeBuyers in Birmingham, Ala., in an interview with realtor.com. “If you look at properties that are under your budget, you’ll have room to submit a competitive offer that goes above the asking price.”

For example, buyers who have a preapproval letter for $375,000 may fall into the trap of wanting to shop for homes that list for $375,000. But homes often sell for much higher than the list price these days. That could spell disappointment for buyers who continually get outbid. A real estate professional can help them set a more realistic price level to shop at based on their preapproval allowance.

The advice to shop below the top of their budget may seem obvious to real estate professionals, but buyers may still be surprised by how much they’ll have to stretch their budgets to afford a home they want. The temptation to shop at the top of a budget maybe even more pressing. The median existing-home price in December 2021 climbed nearly 16% compared to a year earlier, reaching $358,000, according to National Association of Realtors data. Adding to costs, mortgage rates are rising. The 30-year fixed-rate mortgage averaged 3.55% last week, up from 2.73% a year ago, according to Freddie Mac.

Boston condo for sale market 2022

The Boston condo for sale market remains competitive and bidding wars are typical. In December 2021, realtors reported that the average number of offers they received on their most recent sale is about four. That has held mostly steady over the past year as bidding wars remain elevated, according to the December 2021 realtors Confidence Index Survey.

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Boston condo buyers and mortgages.

Interest rates on mortgages are very low. For people who have jobs, this might be the perfect time to refinance. A few of my clients who had higher interest rates did just that to lower their monthly payments.

Boston condo buyers and mortgages.

From Money Magazine:

“Perhaps you thought the days of putting little money down for a home were gone. Well, not so fast. On Monday the CEO of Fannie Mae, Timothy Mayopoulos, announced that the housing giant planned to once again buy loans for which the borrowers put as little as 3% down. Mayopoulos told the crowd gathered at the Mortgage Bankers Association conference in Las Vegas that Fannie, which along with Freddie Mac supports the bulk of the mortgage market today, is working to finalize the details of the offering and gain regulatory approval to proceed. “We want this business,” he said”