Boston Homebuyers: 4 Important Things to Consider When Getting a Mortgage

Getting your Boston, MA home financed

Boston Mortgage Information

While there are buyers in today’s market that are able to pay cash for their Boston homes, the majority will be seeking mortgage loans to finance their purchases. Mortgages, however, can be incredibly confusing. There are so many types of loans and so much terminology that goes along with them, not to mention the tedious process of securing a loan. As a Boston homebuyer, here are 4 important things to consider when getting a mortgage.

Research loan types, and make sure to get the right one for you.

There are many loan options, and the one that will work for you will be based on your personal situation. A few types that you commonly hear are fixed-rate, adjustable-rate, 80/20, FHA, and balloon. Depending on your life and financial situation when purchasing the home, there will be pluses and minus to each. Spend some time on the internet researching your choices, and find a reputable lender for more guidance once you are ready to start looking for a home.

Take all monthly expenses associated with homeownership into account when determining how much mortgage you can afford.

Be sure to consider all of the monthly costs that you will need to afford beyond principal and interest. Depending on your loan type and the amount of downpayment that you apply to your mortgage, you may have monthly mortgage insurance premiums that will be paid along with your mortgage payment. If you choose to escrow your real-estate taxes, those too will be included in the payment. In addition, monthly utility, maintenance, homeowners association costs will also need to be considered.  By ensuring that you're looking at the whole picture of all of the expenses involved in owning a home, you will be able to prevent financial hardship later.

There is a difference between being “pre-qualified” and “pre-approved”.

Being pre-qualified means that based on financial picture you provide, the lender will estimate the amount of mortgage for which you should be able to qualify and afford. Getting pre-approved is a much more involved process. Your credit will be thoroughly analyzed, you will be asked for financial documentation, and you will be told the exact dollar amount that you will be able to borrow. Obviously, this will be contingent on your current financial and credit situation remaining the same all the way through your closing. In today’s market, getting pre-qualified for your mortgage will give you a leg up on buyers who have not done so. Since you’ll have to go through the process at some point anyway, you might as well do it early on.

Be sure to review and understand your closing costs.

There is a long list of fees associated with your closing costs. Both your lender and realtor can help you understand what all of those fees are covering. The day before your closing, you will be able to review your HUD 1 Settlement Statement. Review it carefully, and ask questions. Closing costs can amount to anywhere from 3-7% of the total purchase price of your home, so it’s important to feel confident that everything is correct.

As a long-time Boston, MA realtor, I have worked with many who’ve had to secure financing for their home. Since it is such an involved process, it’s important to start it early in your home search and enlist the help of professionals to walk you through it. With all of the Boston homebuyers with which I’ve worked, I’ve found that these 4 things are some of the most important to consider when getting a mortgage. If you would like more information about purchasing a home in the Boston area, please contact me. It would be my pleasure to assist your find the home of your dreams!

Patti Fine

Phone: 617-642-7585
Email: pf@pattifine.com

Patti Fine Real Estate

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