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All posts tagged Mass Housing

You Don’t Need 20% Down To Own A Home In Boston

There are many would-be homeowners out there that have been misled about their ability to afford a home in Boston. We have some of the highest real estate prices in the country and the misconception that you can’t purchase a home without 20% down has led a lot of people away. Here are five mortgage programs that require significantly less out of pocket money.

Mass Housing Home Mortgage

Mass housing loans is a state-funded program to help homebuyers within Massachusetts. Mass housing allows buyers to purchase a home with a minimum of 3% out of pocket.  The big benefit of mass housing is that you do not pay PMI on these loans. The downside to mass housing, is that there are income qualifications and you do have to take a first-time home buyers course to be eligible for the loan.

FHA Mortgage Loans

FHA (Federal housing administration) home loan programs are probably the most popular throughout the country for individuals who are not capable of placing a 20% down payment. The FHA loan program allows for a 3.5% down payment and a minimum credit score 580. If you’re purchasing a home for $400,000 the down payment or an FHA loan would be roughly $14,000, opposed to $60,000 if 20% was required. You do however pay a little more for the ability to put less down. An FHA loan requires you to pay PMI (or private mortgage insurance). This is insurance the government makes you pay for not having a loan to value of 80/20. Once your home appreciates, or your debt is paid down to a point we are mortgage is 80% or less of your home’s value, you can refinance out of the FHA loan and remove the PMI requirement. Another positive of the FHA program, is that it allows family members to help you contribute to your down payment.

203K HomeLoans

A 203k loan is similar to an FHA loan with an added bonus. The 203K loan allows you to borrow additional funds to make repairs to the property you purchase. For example, you can purchase a home for 300,000, and borrow an additional 30,000 for a kitchen and bathroom makeover.

5% Down Conventional Mortgage

There are also conventional mortgage programs that allow for a 5 to 10% down payment. There are no homebuyers courses,  income restrictions or PMI to pay, that you may receive a slightly higher interest rate.

VA (Veterans Administration) Home Loans

VA helps  Service members, Veterans, and eligible surviving spouses become homeowners. VA does not require a down payment to purchase a home. If your income qualifies you can finance 100% of the cost of your home.

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REDUCTION IN FHA MONTHLY MORTGAGE INSURANCE!

I hope all is well!  I wanted to let you know that FHA has recently announced that as of January 26, 2015, the monthly mortgage insurance on FHA loans is being decreased from 1.35% to .85% on loan to values between 95.01% – 96.50% and from 1.30% to .80% on loan to values at 95% or less.

On a $100,000 loan, for example, this reduction in monthly mortgage insurance will reduce the monthly mortgage insurance payment from $135/mo to only $85/mo.

On a $400,000 loan, for example, this reduction in monthly mortgage insurance will reduce the monthly mortgage insurance payment from $450/mo to $283.33/mo.

Not only will buyer that need to use FHA loans be able to save more money monthly but they will also be able to afford a much higher purchase price due to monthly MI reduction!

Please let us know if you have any current FHA mortgages that you would considering refinancing and we can connect you with our mortgage specialist! Of course if you’re considering making a home purchase, give us a call and we can make the connection.  The FHA 30 Year Fixed rates are as low as 3.125%. Other than FHA he also has access to conventional & mass housing loans with as little as 3% down with NO PMI!.

Here’s to a prosperous 2015!

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