Buying a home for the first time is a life-changing decision. There are a number of factors to consider and research months ahead before even considering making a purchase. To help first-time buyers looking to purchase a home in Boston, we’ve put together this comprehensive guide to help you on your first home buying journey.
Why Buy Your First Home in Boston?Although Boston is one of the more expensive cities in the United States, it's also one of the cities with the highest quality of life. So why buy your first home in Boston? First, let's look at the perks:
- Home appreciation rate - Boston home price appreciation was 108% over the last ten years and is expected to continue rising. This means the value of your home will increase significantly over the years, a strong indicator for those looking to make a long-term purchase.
- Wonderful Food & Culture - Boston has the cultural history that comes with being one of America’s oldest and most influential cities. Still, it also has an up-and-coming food and culture scene. From attending symphonies at Symphony Hall to trying one of the iconic Boston dishes like Boston Cream Pie, there’s an endless amount of food and fun to enjoy!
- Income – According to the 2020 Census, the average household income in Boston is $76,298, over $10k higher than the United States average ($64,998). This means that by moving to Boston, there’s a chance you’ll earn a significantly higher salary than most of the United States.
What To Consider When Buying a Home In Boston
- Proximity to Work & School - How close do you want to be to work or school?
- Public Transportation - Parking in any big city isn’t great. Good thing Boston has an excellent public transportation system. To make the most of it, you should consider how close you’d like to be to save yourself some time.
- House location – Do you want to have a home in one of the city's nice neighborhoods? Or are you more interested in a home in the suburbs where you can have more space?
Steps on How to Buy A Home In Boston
1. Know your budgetYour budget is one of the most important things to establish when first buying a home in Boston. There are so many different neighborhoods and living options in Boston, and identifying your budget can help narrow choices down to fit the perfect fit for you and your family. One of the best ways to get started calculating a mortgage is by calculating your Debt-to-income (DTI) ratio. What this means is that you analyze your current amount of debt and income to determine how much you can afford to spend per month on a mortgage. Also, don’t forget to consider other aspects that come with owning a home, such as property tax and maintaining homeowners insurance.
2. Speak with a Loan Officer & Get Pre-Approval on a MortgageAfter determining how much you can spend per month on a mortgage, the next step will be speaking with a loan officer and obtaining a pre-approval letter. Getting pre-approved for a mortgage is one of the most important parts of buying a home. There are several different types of mortgages out there, so it's best to work with a financial professional to determine which mortgage is right for you. They’ll walk you through a number of questions to determine how much money they are willing to lend and how much you’ll be expected to put down. Then, you’ll need to apply for the mortgage with your lender through a process that will ask a few questions about income, debt, and the home you are considering purchasing.
3. Work with a real estate agent to find the right home for youAfter getting pre-approved, it is time to work with a real estate agent to find your first home. Real estate agents are beneficial for any home buyer, but will be especially helpful for first-time buyers that haven’t gone through the home-buying process before. These housing market experts can help with the process of setting up property appointments, negotiating with the sellers on your behalf, and pointing out things to be aware of.
4. Close the DealAfter finding the home of your dreams, it's time to make an offer! Your real estate agent can help you draft an offer letter. Key components of the offer letter include:
- Offer amount
- Purchase and Sale Date
- Closing Date
- Contingencies (i.e., mortgage, inspection)
- Deadline for Response to Offer
- Earnest Money Deposit
Resources For First-Time Home Buyers in Boston
- MassHousing – provides affordable mortgage financing to low and moderate-income homebuyers.
- Massachusetts Department of Housing and Community Development – mortgage, down payment, and closing cost information for first–time homebuyers
- Massachusetts Housing Consumer Education Centers – find a center nearest you that offers homebuyer classes.
- Massachusetts Housing Partnership – ONE Mortgage Program for first–time homebuyers