Boston real estate blog post: Updated Summer 2020:
Is 2020 your year to buy a Seaport condo that you always dreamed about? Making the leap from renter to homeowner is possible even if you don’t have the traditional 20% down payment. From below-market interest rates to help from private investors, there is assistance available for all first-time homebuyers. Read on for our updated list for 2020.
First, Boston real estate definitions:
First time home buyer: Any individual who has not owned and occupied a primary residence in at least three years.
Cash assistance: A sum of money that you don’t have to pay back, that goes toward the down payment on the home. This is sometimes also referred to as a grant.
FHA (Federal Housing Administration) loan: A loan backed by the federal government, administered through Fannie Mae or Freddie Mac. Many homeowners are grateful this year that they financed their homes through one of these institutions; they offered immediate coronavirus relief for mortgage payments.
PMI (Private Mortgage Insurance): An insurance policy you take out to provide security to the mortgage lender if you default on your loan. It’s often required for low-interest or low-down payment loans.
First-time Charles River Park homebuyers who work with us often have the same question: Should we or shouldn’t we get a first-time home buyer loan?
In fact, there are a number of advantages and disadvantages attached to this type of loan.
So today, we thought we would take a few moments to share with you what you can expect from getting this type of loan as a first-time homebuyer. That way, when it comes time for you to decide how you’re going to finance your Charles River Park condo, you’ll have all of the information you need right at your fingertips.
First-Time Home Buyer Loans 101
A first time home buyer loan offers financial assistance to qualified buyers by utilizing a variety of methods:
- Very low down payments
- low-interest costs
- Grants
- Forgive loans
- Defer payments
With these types of loans, certain restrictions may apply in order to qualify. Thus, it’s important to research beforehand whether you meet those restrictions.
These may or may not include:
- Being prohibited from buying homes in higher price ranges
- Being required to make the newly purchased home your primary residence
- Being prohibited from renting the home to others
These types of loans are certainly great for those buyers who otherwise might not be able to purchase Boston downtown real estate. But there are some disadvantages to this type of loan.
Some of those drawbacks include:
- Buyers are limited to the type of home they want by price range
- Buyers may not be eligible for certain program benefits if they sell their homes before a predetermined time limit.
- Buyers may have a limited number of loan types to choose from.
- Buyers may have to pay for recapture taxes in exchange for benefits they receive through the program
For these reasons and more, some first-time homebuyers may find it just as beneficial to get a traditional loan, although this should be considered on a case by case basis.
Boston Real Estate and the Bottom Line
Contact us today to learn even more valuable information that is sure to help you as a Boston downtown first-time homebuyer. We are glad to offer you our expert assistance, which includes straight-forward advice and user-friendly resources.
