Boston luxury first-time homebuyers. Are you aware of this?
Downtown Boston real estate for sale
Boston luxury first-time homebuyers. Are you aware of this?
- President Biden has proposed a “mortgage relief credit” of $5,000 per year for two years for middle-class, first-time homebuyers.
- He is also calling for a one-year credit of up to $10,000 for middle-class families who sell their “starter homes” to another owner-occupant.
- However, experts have mixed opinions about whether the policies will help the country’s housing affordability issues.
“I know the cost of housing is so important to you,” Biden said during his State of the Union speech Thursday night.
Understanding what most mortgage lenders are looking for can require a bit of homework. However, it’s important to note that the eligibility criteria will not always be the same. In most cases, it will vary based on the loan type and lender. Here are a few factors that remain common among those requirements when purchasing a Boston condo for sale in today’s market.
Consistent Income is necessary to buy a Boston condo for sale
Most lenders will immediately ask you to provide proof of employment and consistent income in the form of pay stubs, tax returns, etc. This is because they want to ensure you can afford to repay the loan. They may also consider your financial emergency assets, money market accounts, etc. Please have all this lined up when applying for a Boston condo for sale.
Credit Score is important to purchase a Boston Condo for Sale
The credit score is one of the most important factors your mortgage lender considers. A good score showcases your ability to repay loans on time and portrays reliability.
However, there is no universal credit score requirement because it usually depends on the type of mortgage you’re seeking. A conventional loan may require you to have at least 620.
It’s also possible to qualify with a lower score for other types of mortgages, such as the ones backed by the US Department of Agriculture and the Federal Housing Administration. The rule of thumb is to ensure that your credit score is high because the higher it is, the better your chances of qualifying for a good interest rate.
Down Payment For Boston Condo Financing
The down payment you’re required to make also depends on the type of mortgage and lender. Conventional mortgages usually require 3% of the property’s purchase price.
However, most people prefer putting at least 20% into the down payment to avoid PMI (Private Mortgage Insurance). The good news is that a USDA (US Department of Agriculture) loan doesn’t require a down payment.
Most lenders assess the risk involved by looking at the money you put down. This means the more down payment there is, the lesser the risk for them. This isn’t it. A large down payment also reduces your LTV or loan-to-value ratio, which is another appealing factor to lenders.
DTI or Debt-to-Income Ratio tp purchase a Boston Condo for Sale
The DTI ratio is basically the amount in monthly debt payments you owe compared to the income you earn. Typically, it shouldn’t be higher than 50% if you wish to qualify for a mortgage. Lenders also take your housing expenses into account when determining whether you’re a good fit for the loan. These expenses may include your property taxes, homeowner’s insurance, and your mortgage.
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Boston luxury first-time homebuyers. Are you aware of this?
Consumers have been closely following President Joe Biden’s proposed first-time homebuyer tax credit, but the latest legislative effort to assist homebuyers differs in several significant ways. The newest draft of a down-payment assistance bill would provide $25,000 to first-time homebuyers, but only those who are also first-generation homebuyers and economically disadvantaged. Plus Biden’s proposal is not actually a homebuyer tax credit, but it is money that would be available at closing.
On Wednesday, lawmakers published a draft version of the legislation, the “Downpayment Toward Equity Act of 2021,” ahead of a hearing held by the U.S. House Committee on Financial Services, which Rep. Maxine Waters chairs. During the hearing, lawmakers discussed a number of housing measures on the table in President Biden’s infrastructure package, including funding to shore up public housing.
The proposed down payment assistance would be means-tested based on income, and limited to those who have not owned a house for at least three years. To qualify, neither of the borrower’s parents may have owned a home. That qualification doesn’t apply if the borrowers’ parents lost their home in a foreclosure or short sale, or if the borrower has ever been in foster care, however.
Borrowers who make no more than 120% of the area median income where they live — or if they live in a high-cost area, 180% — would qualify for a baseline of $20,000. Those recognized as socially disadvantaged, because they are in a group that has been “subjected to racial or ethnic prejudice,” could receive an additional $5,000.
The grant funding — which is not a tax credit — could be used at closing toward a downpayment on a residential property with one to four units, including a condominium, cooperative project or manufactured housing unit.
The program, which is currently being discussed in the House of Representatives, would dole out funds to states based on population, median area home prices and racial disparities in homeownership rates.
Downtown Boston real estate for sale
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If any first-time home buyers were on the fence about taking a more traditional starter home path to homeownership in 2020, the Covid-19 pandemic brought into focus the way they viewed homes and what they really wanted for a dream home.
For Millennial home buyers, this past year’s change in the economy, employment and especially dropping interest rates offered surprises, with 47% being pleasantly surprised that they could afford a higher-priced home, according to a generational insights report by realtor.com. On the flip side, 21% were surprised that their budget was lower than they thought.
Downtown Boston real estate for sale
Source: Boston luxury Condos for Sale
