A lot of people who are interested in buying a Boston condo start to worry about their finances after hearing they need to provide a 20 percent down payment on a Boston condo. However, it is often possible to buy a Boston condo for sale without a massive down payment. Though 20 percent may be the recommended amount of down payment for a property, it is not a requirement. Use these tips to lower your down payment so you can buy a property without having to save up as much.
Look into Government Loans
The best way to get a smaller down payment is to go with a government-backed loan. Lenders are more willing to accept a lower down payment when the government is insuring the loan. For example, Veterans Affairs mortgages do not require any down payment and Federal Housing Administration mortgages only require a 3.5 percent down payment. Keep in mind you might have to meet qualifications like being a veteran or finding a government approved lender, but if you can get one of these loans, they are very helpful.
Get a Piggyback Mortgage
As long as you can make a down payment of at least 10 percent, you can try a piggyback mortgage, which is technically two mortgages. Your down payment would cover roughly 10 percent of the purchase, the main mortgage covers about 80 percent of the loan, and the secondary mortgage covers the remaining 10 percent. Due to the shifting housing market, more and more lenders are allowing this type of mortgage lately. It can include a bit of extra hassle and paperwork, but you normally do not need to pay for an appraisal, title insurance, or other required fees twice.
Find Down Payment Assistance Programs
With down payment assistance programs, you can essentially get a low or no interest loan for the down payment, which allows you to agree to a higher down payment without having to offer your own money as the down payment at the time of closing. There are both government run and nonprofit agencies that offer down payment assistance as a way of boosting home ownership.
Pay for Private Mortgage Insurance
If you cannot make a high down payment, you may find that lending institutions want you to pay for private mortgage insurance, which protects the lender if you default on your loan. The rates for private mortgage insurance tend to be calculated based on credit score, so this is normally only a good option for buyers who have an excellent credit score of over 760.
Before beginning your search for a Boston condo for sale, determine how much you can afford for a down payment. When you’re ready to start looking at the many great condos, lofts, and penthouses in the area, get in touch with the reliable agents at Ford Realty at 617-595-3712.
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Over the course of 20 years in the Boston downtown real estate market, John represented and sold numerous, condominiums, investment and development properties in Greater Boston and in the surrounding suburbs
In addition to representing Boston condo buyers and sellers, John is currently one of the most recognized Boston condo blog writers regarding Boston condominiums and residential real estate markets. John's insights and observations about the Boston condo market have been seen in a wide variety of the most established local & national media outlets including; Banker and Tradesman, Boston Magazine The Boston Globe, The Boston Herald and NewsWeek and Fortune magazine, among others.
For over 24 years, John Ford, of Ford Realty Inc., has been actively involved in the real estate industry. He started his career in commercial real estate with a national firm Spaulding & Slye and quickly realized that he had a passion for residential properties. In 1999, John entered the residential real estate market, and in 2000 John Started his own firm Ford Realty Inc. As a broker, his clients have come to love his fun, vivacious, and friendly attitude. He prides himself on bringing honesty and integrity to the entire home buying and selling process. In addition to helping buyers and sellers, he also works with rental clients. Whether you’re looking to purchase a new Boston condo or rent an apartment, you’ll quickly learn why John has a 97% closing rate.
Charles River Park
Surrounding Communities of Boston
John Ford and his staff can be reached at 617-595-3712 or 617-720-5454. Please feel free to stop by John's Boston Beacon Hill office located at 137 Charles Street.
Ford Realty Inc
137 Charles Street
Boston, Ma 02114