Putnam Realty | Cape Cod Real Estate, Boston Real Estate


Purchasing your first home can be a thrilling journey, and an incentive can help to lessen the burden. To qualify for this incentive, you don't need a massive pile of cash in the bank for a down payment. You also don't need a perfect credit score. 

As a first time home buyer, there are specific scores to help you secure the fund needed to purchase your first house. If you want to qualify for these incentives, read ahead!

HomeReady Mortgage Program

The HomeReady Mortgage program is best for first time home buyers with a reasonable credit score of 620, with a minimum income and low cash reserves. This program is best for first home buyers, with a down payment of 3 percent. The program ends once your insurance equity reaches 20 percent. 

USDA loan program

If you are considering a home in a rural area, you might qualify for 100 percent financing through the USDA loan program. This program does not require an immediate down payment, and the credit score requirements are a little less stringent compared to a conventional loan.

Energy efficient mortgage program

EEM is another incentive offering program that aims at improving the cost of energy efficiency. However, this will not affect your minimum down payment. Your lender determines your EEM benefit.

Federal housing administration loans

Another option for first time home buyers that have past credit challenges. Also, the down payment for the new home is minimal. This program is backed up by the government and allows you to qualify with a 3.5 percent down payment and a credit score of only 580.

97% LTV Mortgage

If you want to buy your first home, but unable to make at least a 20 percent, this program might be what you need. In a nutshell, this program allows you to make a down payment of only 3 percent. To qualify, you must pursue a fixed rate mortgage, and your home must be used as your primary residence and not as an investment property.

Many programs offer a mouth-watering incentive to first time home buyers. Not all programs would suit your need as a home buyer, and you must do in-depth research and discover a program fits. 

So, if you are a first-time home buyer and you're yet to determine the incentive to go for, now is the appropriate time to start a hunt.


If you’re ready to buy a home, you probably have done a lot of research. One thing is sure: You know you need to get pre-approved for a mortgage. It’s perhaps the most critical step in the process of buying a home for a variety of reasons. There’s down payments and debt-to-income ratios, and other financial issues to worry about. You need to know what type of mortgage you should get. To help you understand what kind of mortgage you need, you should get pre-approved.


Understand The Pre-Approval Process


There are many misconceptions about pre-approvals. First, buyers need to understand that there is a difference between a pre-qualification and a pre-approval. A pre-qualification merely scrapes the surface of your financial state, while a pre-approval goes through everything a mortgage company will need to grant you a loan. You may be pre-qualified for a much higher amount than you can actually afford, for example.


Pre-Approval Defined


A pre-approval is a lender’s written commitment to a borrower. The approval states that the lender is willing to lend a certain amount of money for a home. The lender obtains the following from the buyer:


  • Employment history
  • Credit report
  • Tax returns
  • Bank statements


The time and effort that it takes to get a pre-approval is worth it because everything will be ready for the lender to grant the mortgage once an offer is made on a home. It also gives the buyer an upper hand in finding the home of their dreams. Many sellers require a pre-approval with an offer.


When To Get A Pre Approval


As soon as you know you’re serious about buying a home and are ready to start the house hunt, you should get pre-approved. Pre-approvals do expire after a certain amount of time, but lenders can renew them with proper notice. 


The Importance Of The Pre-Approval


Many buyers feel that they can skip the pre-approval process altogether. It has many benefits. Besides giving you a better look at your finances and how much house you can afford, pre-approvals can:


  • Give you the insight to correct your credit score and help you correct credit problems
  • Help to avoid disappointment when you find a home you love
  • Allow first-time buyers to see all of the costs involved in buying a home


A pre-approval is a handy thing to have, and it’s not just because the experts say it’s essential. Getting pre-approved for a mortgage can help you to be more on top of your finances going into one of the most significant purchases you'll ever make in your life. 

 


Whether you’re a new homeowner or have owned your home for a few years, there’s always much to learn when it comes to understanding mortgages. Depending on your financial status and your long-term plans, it may make sense to either make larger payments or to refinance your home loan.

Today, we’ll tackle some of those difficult “what if?” questions, helping you decide when to refinance, when to keep your payments stable, and when you might want to increase your monthly mortgage payments.

What are the benefits of refinancing?

We’ve all heard about the benefits of refinancing when under financial stress. For things like student loans and credit card debt, refinancing is often a debtor’s only choice. However, with home loans, the allure of refinancing may not always be a good fit for you.

If your plan is to refinance to get lower mortgage payments each month, you should first question if it will be worth it on the long run, which might amount to you paying more in interest. To avoid paying more in interest, refinance after you’ve accomplished important financial milestones, such as increasing your credit score which makes you a lower risk client to banks.  

When does it make sense to pay more?

The benefits of paying off your mortgage in a shorter period of time are obvious. It means less time making payments, and less money spent on interest.  

However, depending on your mortgage, you might be better off investing your savings in something that will give you a larger return. Investments in a retirement fund, for example, are likely to pay off to a larger degree in the long term. To do the math, simply calculate the savings you would earn on by cutting your mortgage interest and weigh that against projected gains in retirement funds.

None of us can predict the future. Stocks rise and fall, people get laid off from their job due to fluctuations in the economy, and so on. These factors make it difficult to determine whether you should invest. So we encourage you to do your homework when it comes to investments so that you have the best chance of succeeding.  

Changing lenders

Your relationship with your lender will likely be a long one, so you want to make sure it’s one you’re comfortable with and that they are giving you reasonable rates. Now that you’re secure and living in your you have time to shop around for the best rates.

Be sure to ask lenders for good faith estimates and compare applicable fees. Ask friends and neighbors about their experience with lenders and read online reviews to get a better idea of what type of customer experience can expect.


Buy a house and you probably just made the largest purchase of your life, a decision that will impact you daily. Buy the right house and you can finally start to feel rooted, as if you found the place where you feel balanced and centered. You can make this house your own, hanging original art pieces and pictures on the walls and filling the space with furniture and knick knacks that showcase your remarkable personality, your amazing style.

Stop guessing how much house you can afford

If you let yourself develop your creative muscle, there’s a strong likelihood that you created those original art pieces yourself. Clearly, buying a house is about more than the base price of the house. It’s about stepping into new experiences. Allow those experiences to be rewarding, certainly financially stress free. But, that won’t happen like magic. It takes thought, action and understanding. You can do it.

You must know everything that you’ll be responsible to pay for before you buy a house. It could keep you out of foreclosure should you or your spouse get laid off. It could keep you from taking on debt that will put your finances in a gripping headlock. Specific fees that you may incur when you buy a house vary, depending on the lender. However, general fees and costs you can expect to be responsible for include:

  • Base price of the house (It’s easy to think that the base mortgage is all you’ll have to repay when you buy a house. But, although it’s the largest chunk of what goes into a mortgage, the base price or principal of a house is only one piece of the costs.)
  • Interest or adjustable rate mortgage (Adjustable interest rates may start lower, but they can shift upwards and put your mortgage out of reach. Research lenders. Make sure you’re not working with a predatory lender.)
  • Property taxes
  • Down payment (The bigger the down payment you can put on your new house, the better. It can lower your monthly mortgage payments significantly.)
  • Closing costs (Try to negotiate a deal that splits closing costs with sellers. You might even get a deal where house sellers pay all of the closing costs.)
  • Homeowner’s association fees
  • Mortgage insurance
  • Homeowners insurance (This is separate from the mortgage insurance. Homeowners insurance covers the costs of damages the house may incur during natural and human-made disasters. This insurance is similar to car insurance.)
  • House inspection fees

Eliminating mortgage fee surprises helps you enjoy your home

There is more than one way to become a homeowner. Options include rent-to-own, a newly built house and buying an old house that you restore. Housing communities also vary, giving you the chance to move into communal housing neighborhoods, single family homes, tiny houses, mobile homes and elegant Victorian houses. You could also make the land more a priority than your living space, especially if you aim to start a farm or another outdoor business.

Go with the housing option that best matches your personal needs. You’re probably going to be spending a lot of time in your new home. But, don’t just fall in love with your house. Set yourself up for financial success. Be aware of all costs that go into your mortgage before you buy a house. Also, understand additional costs that you are responsible for paying a lender that aren’t built into your monthly mortgage payments. Shop for and buy a house with your eyes wide open.


When you get pre-approved for a mortgage, you may be excited to find out that you can afford a lot more house than you thought you could. Don’t be so fast, this is just what you can get a loan for. The bank doesn’t know a lot of factors about your finances. While you most likely had to provide a ton of income verification statements and information in order to get this ballpark figure, relying solely on the pre-approval number can put you in a bind when it comes to your finances. Your lender doesn’t know certain things like how much you spend on groceries or how much your cell phone bill is each month. 


What Lenders Consider


Lenders look at the health of your credit history, how much income you have and how much debt you have. These are the big factors that tell your lender about how much house you can afford. Yet, your home lender is not your financial advisor and can’t help you with household expenses and the like. When thinking about what price range of home you really can afford, consider these factors beyond the bank:


Your Monthly Budget


Your spending habits will ultimately affect your ability to pay the monthly mortgage bill. If you’re spending all of your disposable income, then you may not be able to afford much at all beyond what you’re already paying for rent. You don’t want to stretch your finances so thin that you won’t be able to afford food! 


Owning A Home Requires Additional Costs


Lenders do factor into their number the cost of homeowner’s insurance and property taxes, but don’t consider other things like utility bills, trash pickup and home repairs. All this can certainly add up when you’re a homeowner! 


Your Savings Is Nonexistent


If you’re unable to save any money at all if you’re a homeowner, then you’ll be in trouble. You need money stashed away in case of unemployment or an emergency. You also may be planning for things like retirement and future costs like children’s education. For the initial purchase of a home, you’ll need upfront payments available for the down payment and closing costs. However, you’ll need some more savings beyond that for everything that life brings your way!  


You Have Big Plans


Are you thinking of quitting your job and heading out to start your own business? Now may not be the best time to buy a new house. These changes could have a huge impact on your finances and leave you unable to pay your mortgage. Your lender won’t be asking about these plans, so you’ll need to know what the future holds (for the most part ) in order to keep your own finances secure. 


The bottom line is that anything that could leave you financially stressed is not a good idea. Considering that buying a home is one of the biggest purchases you'll ever make, you want to be sure that you keep your finances in check during the purchase process.  




Loading