Do you need a Massachusetts Homebuyer Education Certificate to qualify for a loan program or an affordable housing opportunity? Are you looking to buy a home, but not sure you can afford one? We offer the approved homebuyer education workshop that is required for Mass Housing, Mass Housing Partnership One Mortgage, or the Equity Builder programs as well as other down payment assistance or affordable housing opportunities. We do not attempt to sell you any goods or services; we do not receive any commissions. The fee is $75 per household and can be paid below.
If you have any questions about the program or to receive the information sheet and the registration form, please send an email to EOLeary@CoastalHB.org.
Tuesday, October 27, 2015
Principle - You borrowed money and every month you pay some of it back. The money that goes to principle reduces how much money you owe. It's how you pay down your mortgage.
Interest - It costs money to borrow money so every month you pay the lender for the use of that money. Whether or not that interest rate changes or how it is amortized was all spelled out in the beginning, before you completed the loan agreement by closing on the property. Amortized refers to how long it would take you to pay off the loan by making regular monthly payments. Most mortgages now are amortized over 30 years.
Taxes - Your lender will want to make sure the taxes are paid on the property - mainly because a tax lien would take precedence over a mortgage. This means if you did not pay your taxes and your mortgage, the taxes would be paid first in a procedure against you. The lender will collect from you monthly and pay your quarterly tax bills.
Insurance - This refers to one, possibly two, types of insurance. First, the lender wants to know that your property is insured. For a single or multi-unit building, the owner will have hazard (also known as homeowner's) insurance. A buyer will secure one year's insurance prior to the closing. The lender will collect monthly to make sure that when the bill is due again, they can pay it. For a condo, the insurance is the master insurance paid through the condo fee. A lender may also require HO6 or interior insurance. That would be handled much like the insurance on a single family or multi unit home.
Also, the lender may have required that the loan be insured. If a buyer's down payment is less than 20% of the purchase price they will have to pay mortgage insurance or do a loan program that addresses the situation otherwise. This is often called private mortgage insurance, or PMI, but actually that is the name of a company that offered it. It is correctly called mortgage insurance or MI. If you are paying mortgage insurance it will part of your mortgage payment.
Friday, October 2, 2015
Tuesday, September 15, 2015
Saturday, August 22, 2015
While that answer is correct, there is another way to look at it. The woman asking the question may not have had the best vocabulary to get the right answer and that is often the case. She wanted to know how much money she and her husband would need to have in the bank after the closing. She wanted to now how much they would need in reserves. Reserves are not actually closing costs, but they may be a requirement of the loan program you are using. Particularly if you are buying a multi-unit property, your lender does not want to know that you completely bottomed out all of your available funds to make the closing happen. They really want to know that you have enough money to make the mortgage payment, especially that first payment. They want to know you have some money for emergency repairs.
To find out if you will be required to have reserves and how much, ask your loan originator as you are considering different loan programs. Most of them will tell you and disclose that amount to you, but occasionally someone in the workshop tells me they found out they need reserves but did not know initially. Ask. Ask if you will need reserves and how much will you need.