Downtown Boston real estate for sale 

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1. Do you have money for a condo down payment?

Although the common perception is that first-time homebuyers need to have a 20% down payment to purchase a Boston downtown condominium, that’s simply not the case. Typically you’ll need a minimum down payment of 3.5% to 10% for an FHA home loan, and a minimum of 3% to 5% for a conventional loan. 

For example, let’s assume you’d like to purchase a home that costs $300,000. Your lender will require a downpayment of at least 3% of the sale price of the home, depending on the type of loan you choose and qualify for. In this example, 3% of $300,000 equals a $9,000 down payment.

It’s important to remember that the larger your down payment, however, the lower your monthly payments will be and the less interest you will pay during the life of your loan. Another drawback to a low down payment is that you’ll have to pay private mortgage insurance (PMI), which protects your lender in case you can’t pay your mortgage. If you put down less than 20%, you’ll probably have to pay for PMI, which is added to your monthly mortgage payment.

2. Do you have a solid savings and emergency fund?

While you may have saved enough for your down payment, don’t forget to account for closing costs which include legal fees, lender fees, taxes, etc., and usually total 2% to 5% of the home’s purchase price. 

You should also make sure you have some emergency funds set aside. 

3. Is your credit score in good shape?

Many potential Boston condo buyers worry that they won’t be able to buy because of a low credit score. However, you actually don’t need perfect credit to buy a home and there are many loans and first-time homebuyer programs available for buyers without perfect credit. That being said, a higher score will help you qualify for a lower mortgage rate, saving you money in the long run.

One of the most common questions first-time buyers ask is, “what credit score is needed to buy a Boston condominium?” While there’s no hard-and-fast rule for this, you’ll likely need a minimum credit score of 600 for approval. To qualify for the most favorable rate, however, work on improving your credit score and wait until you have a score of 700 or higher.

4. Do you have a handle on your debt?

Don’t panic – you don’t have to be completely debt-free to buy Boston real estate for sale. Between student loans, car payments, and other bills, most mortgage companies know that it is unrealistic to expect borrowers to be totally debt-free these days. They primarily want to know that you’ll be able to afford your mortgage payment based on how much money you have coming in versus what you need to pay out to other debts. 

5. Make sure you can afford the condo monthly expenses?

To figure out if you can afford the monthly expenses, you’ll first need to calculate your mortgage payment. An online mortgage calculator can estimate this for you, however, affording a home is so much more than just the mortgage payment. Other financial aspects of homeownership may include:

  • Property taxes and insurance
  • Boston condo fees
  • Home expenses (cell phone bill, internet, etc)
  • Utilities (electricity, etc.)

Before you decide to make the transition from renting to buying Boston real estate, make sure you’ve done the math and can afford all of the monthly expenses that come with being a homeowner.

6. Do you have a steady job to pay the condo mortgage payments?

Stable employment and income show lenders how much of a downtown Boston condo you can afford and are important indicators for qualifying for any mortgage. But even if you can demonstrate financial stability on paper, you should only buy a condominium if you think your income will remain steady for the foreseeable future. 

A nightmare scenario for most homebuyers is losing their job just after they close or move into a new home. So if there’s any uncertainty about your income or employment, wait until things settle down before buying a house.

7. Are you planning living in the Boston condo for a while?

There’s no rule barring you from moving shortly after buying a home. But as a homeowner, you’ll have a chance to build equity. The longer you own your home, the more equity you build, and the more money you’re likely to make when you sell it. Ideally, you should live in a house long enough to make a profit. So, if you can’t commit to an area, continue renting until you’re ready to put down roots.

Boston Real Estate and the Bottom Line

Figuring out if you are ready to buy a house is a personal decision and one that means taking a hard look at different aspects of your life: finances, lifestyle, job situation, and long-term goals. But if you’ve answered yes to all of the above, you might just have an answer to the big question, “am I ready to buy a house?”  If you’re still unsure or you have specific questions relating to your situation, reach out to a mortgage lender or to a Ford Realty real estate agent who can give you professional advice.

Downtown Boston real estate for sale 

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