Massachusetts Mortgage & Refinancing

Massachusetts amaze both residents and tourists alike with its abundant natural and manmade scenic landscapes. From its miles and miles of unspoiled beaches to its lengthy trails, and from its multi-colored cliffs to its many other different water formations such as falls and rivers, it’s easy to see why people keep falling in love with it.

And the fact that it harbors quite a number of Fortune 500 companies, it has several booming industries, and it boasts of an amazing education system also contribute to its popularity among home buyers. Aside from Boston, Cambridge and Newton are two of the many other great areas to live in here. (Source: Livability.com)

Home Buyers Expenditures in the State

Cost of living in The Bay State is quite higher than the national average, and housing is the biggest factor that contributes to this. (Source: Sperling’s Best Places)

Home buyers should expect to pay higher for a house here, since the average home value is $365,300, as opposed to the countrywide median of $195,300. The breakdown of the housing market and their prices are as follow:

  • Single-family homes: 83.50% of the housing market, with an average property value of $206,412.78
  • Condominiums: 16.10% of the housing market, with an average property value of $182,714.85
  • PUD Homes: 0.20% of the housing market, with an average property value of $186,009.62
  • Townhomes: 0.20% of the housing market, with an average property value of $240,813.72

Although real estate is expensive here than many other states, it’s worthy to note that households here also make more, with the state’s median income amounting to

Home Lending Laws

When it comes to home lending, MA implements laws designed to help borrowers keep up with their payments and avoid foreclosure.

For instance, a borrower who has fallen behind on monthly mortgage payments has a “right to cure.” This gives the home owner up to 150 days to get current on the payments. Within this time period, the lending institution cannot apply penalties and fees yet.

In the event that the borrower still hasn’t made the necessary payments, he/she should send an acceleration notice to the lender, which gives him/her another 21 days to avoid foreclosure. However, the home owner should already pay off the entire balance of the loan. If it remains unpaid after this time frame, the lending company can already hold a foreclosure sale on the property.

Key Features of Fixed-Rate Mortgages

The following are the primary benefits of this type of mortgage:

  • Guarantee that interest rates won’t change over the life of the term, no matter what happens to the market
  • Unchanging interest rates protect borrowers from sudden exorbitant increases in monthly payments
  • Borrowers can spread their payments over a 30-year term (15-year and 40-year terms also available) to make their debt repayment easier on the wallet

Highlights of Adjustable-Rate Mortgages

There are also several benefits to ARMs that draw quite a number of borrowers towards it.

  • Variable-rate mortgages come with upfront interest rates lower than those for the fixed-rate ones, and lenders usually apply this on the first one to five years
  • Promo rate (also known as teaser rate) won’t move upward (or downward) within the specified teaser rate period

Making Mortgage Payments Easier to Afford

There are several tactics home buyers can do to make their mortgage payments more affordable. One is to secure lower rates with a better FICO score. Another is to seek help and guidance from state-approved agencies, such as the Massachusetts Housing Partnership or MassHousing.

Qualifying home owners should also consider refinancing, as long as it can help them save a lot, or reduce their current interest rate by at least 1%.