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7 Home Financing Options in Massachusetts
Dated: April 21 2023
7 Home Financing Options in Massachusetts
You’ve made the decision, you want to buy a home. Now what?
If you’re on the search for a new home, then you know one of the most important aspects of your journey is deciding how you want to finance your new purchase. The state of Massachusetts offers several different home financing options, but it may be difficult to know which option is right for you and your family.
Knowing your options and what they entail can benefit you greatly as you pursue your home buying journey. Make sure to reach out to one of our trusted agents if you have any questions about which mortgage or loan is best for you!
Conventional Mortgage: Conventional mortgages are those that are not insured by a government agency. Because they’re not backed up by the government, they can often be easier to get, due to not having to wait to get approved by a federal government agency. Conventional loans typically come in different forms with various options, meaning you can choose if you want it to be fixed-rate or adjustable.
Fixed-Rate Mortgage: Fixed-rate mortgages have the same interest rate for the entirety of the loan. For example, if a loan has a 15-year term, the interest rate will not adjust over the course of that term. Fixed-rate mortgages are great if you want to pay the same, consistent monthly payment for the duration of the loan. A fixed-rate mortgage may be ideal for long-term budgeting purposes.
Adjustable-Rate Mortgage: Adjustable-rate mortgages have interest rates that change over the course of the loan term. When you choose an adjustable-rate mortgage, your rate and therefore your monthly payment may go up at any given time. ARMs are ideal if you’re only planning to be in your home for a few years, and you’re looking for a lower interest rate upfront.
Jumbo Loan: Jumbo loans are used to refinance a home when it’s too expensive for a traditional mortgage. They are essentially big loans used to buy bigger houses, and they offer the flexibility of sometimes paying less upfront on your down payment.
Federal Housing Administration (FHA) Loan: FHA loans are issued by the government and have less strict credit requirements than traditional mortgages. With an FHA loan, your interest rate may be lower as well as your initial down payment. However, it’s important to note that FHA loans have maximums and require you to pay a Mortgage Insurance Premium (MIP), which is enforced if your down payment is less than 10% of the cost of the home.
United States Department of Agriculture (USDA) Rural Home Loan: USDA loans are specifically designed for those looking to purchase a home in a rural area. These loans typically have a low or no down payment, and low monthly mortgage payments. However, in order to get a USDA loan, you have to meet the qualifications. These include the homebuyer making a specific income and geographic location restrictions.
Veteran Administration (VA) Loan: VA loans are exclusively offered to veterans and have no down payment. VA loans typically have low interest rates and do not require Private Mortgage Insurance (PMI). VA loans are only valid for home purchases, and do not work on rental properties, vacation homes, etc.
Now that you know about different types of financing options, you can get started on picking a mortgage or loan that is right for you. If you have any questions or would like more information about a specific type of financing, reach out to one of our XSELL REALTY mortgage partners, Nick Paleologos at Envoy Mortgage and Eva Kokosinska at Radius Financial for assistance!
Derrick has worked with Century 21 XSELL REALTY since 2022. He loves that at XSELL, you are treated as an individual instead of one of many. When you work with Derrick, he will make sure to get the jo....
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