Question 1

How much money do I need to buy a house in Massachusetts?

Accepted Answer

For a conventional loan, you typically need 3-20% down payment, plus 2-5% for closing costs. FHA loans require as little as 3.5% down. For a $500,000 home, expect to need $25,000-$125,000 in cash. Additionally, you'll need reserves (usually 2-6 months of mortgage payments) in savings.

Question 2

What credit score do I need to buy a home?

Accepted Answer

Minimum credit scores vary by loan type: Conventional loans typically require 620+, FHA loans require 580+ (or 500+ with 10% down), and VA loans have no minimum but lenders often want 620+. Higher scores (740+) get the best interest rates, which can save you tens of thousands over the life of your loan.

Question 3

Should I get pre-approved before looking at homes?

Accepted Answer

Absolutely. Pre-approval shows sellers you're a serious, qualified buyer and strengthens your offer. It also helps you understand your budget before you fall in love with a home you can't afford. In competitive markets, many sellers won't even consider offers without pre-approval.

Question 4

What's the difference between pre-qualification and pre-approval?

Accepted Answer

Pre-qualification is a quick estimate based on self-reported information—it carries little weight. Pre-approval involves a lender verifying your income, assets, and credit, resulting in a conditional commitment to lend. Always get pre-approved, not just pre-qualified.

Question 5

How long does it take to close on a house in Massachusetts?

Accepted Answer

The typical closing process takes 30-60 days from accepted offer to closing day. This includes time for inspections (7-10 days), the Purchase & Sale agreement (typically signed 10-14 days after offer acceptance), mortgage processing (3-4 weeks), and final preparations. Cash purchases can close faster.

Question 6

Do I need an attorney to buy a house in Massachusetts?

Accepted Answer

Massachusetts is an 'attorney state' where real estate attorneys handle closings. Your attorney will review the P&S agreement, conduct the title search, review your closing disclosure, and represent you at closing. Expect to pay $800-$1,500 for attorney fees.

Question 7

What makes Massachusetts home buying different from other states?

Accepted Answer

Massachusetts has several unique aspects: The Offer to Purchase is legally binding (unlike in some states), attorneys handle closings instead of title companies, the Purchase & Sale agreement is a detailed contract negotiated between attorneys, and there's a Smoke/CO detector certificate requirement. The state also has specific lead paint disclosure requirements for pre-1978 homes.

Question 8

What is an IOLTA account?

Accepted Answer

IOLTA (Interest on Lawyers' Trust Accounts) is where your escrow deposits are held during the transaction. In Massachusetts, either the listing broker's IOLTA or your attorney's IOLTA account will hold your earnest money and P&S deposit. These are segregated trust accounts that protect your funds.

Question 9

How much earnest money deposit should I offer?

Accepted Answer

In Massachusetts, the initial earnest money deposit (with the Offer to Purchase) is typically $1,000. The larger P&S deposit, due when signing the Purchase & Sale agreement, is usually 5% of the purchase price.

Question 10

What contingencies should I include in my offer?

Accepted Answer

Common contingencies include: Financing contingency (protects you if you can't get a mortgage), Inspection contingency (allows you to negotiate or withdraw based on inspection results), Appraisal contingency (protects you if the home appraises below purchase price), and Sale of current home contingency (if applicable). In competitive markets, some buyers waive contingencies to strengthen their offer—discuss risks with your agent.

Question 11

Can I back out after my offer is accepted?

Accepted Answer

In Massachusetts, the Offer to Purchase is legally binding. However, you can typically back out if a contingency isn't met (e.g., failed inspection, financing falls through). If you back out without a valid contingency reason, you may forfeit your earnest money deposit. Always consult your attorney before withdrawing from a contract.

Question 12

What does a home inspection cover?

Accepted Answer

A standard home inspection covers: structural components (foundation, framing), roofing, electrical systems, plumbing, HVAC systems, interior and exterior conditions, and appliances. Inspectors don't cover hidden or inaccessible areas (like behind the walls), and specialized inspections (radon, pests, mold) are often recommended separately.

Question 13

How much does a home inspection cost in Massachusetts?

Accepted Answer

Expect to pay $400-$700 for a standard home inspection, depending on the home's size and age. Additional specialized inspections cost extra: radon testing ($125-$175), pest/termite inspection ($75-$150), and mold air sampling ($150-$300). These are worth the investment for peace of mind.

Question 14

What happens if the inspection finds problems?

Accepted Answer

You have several options: negotiate repairs or credits with the seller, accept the property as-is, request a price reduction, or withdraw from the contract (if you have an inspection contingency).

Question 15

Should I attend the home inspection?

Accepted Answer

Yes! Attending the inspection (typically last 2-4hrs) lets you see issues firsthand, ask questions, learn about the home's systems, and understand maintenance needs. It's one of the most educational parts of the home buying process.

Question 16

What types of mortgages are available?

Accepted Answer

Common options include: Conventional loans (not government-backed, require 3-20% down), FHA loans (government-insured, 3.5% down, easier qualification), VA loans (for veterans, no down payment), USDA loans (rural areas, no down payment), and Jumbo loans (for amounts above conventional limits). Fixed-rate and adjustable-rate (ARM) options are available for most types.

Question 17

What's the difference between interest rate and APR?

Accepted Answer

The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus other loan costs (points, fees, mortgage insurance) expressed as a yearly rate. APR gives you a more complete picture of the loan's total cost and is better for comparing loan offers.

Question 18

Should I pay points to lower my interest rate?

Accepted Answer

Paying points (prepaid interest) makes sense if you plan to stay in the home long enough to recoup the upfront cost through lower monthly payments. Calculate your break-even point: if points cost $4,000 and save you $100/month, you break even at 40 months. If you might move or refinance sooner, skip the points.

Question 19

What documents do I need for my mortgage application?

Accepted Answer

Prepare: 2 years of tax returns and W-2s, recent pay stubs (30 days), 2-3 months of bank/investment statements, photo ID, Social Security number, employment verification, and documentation of any large deposits. Self-employed borrowers need additional business documentation. Your lender will provide a complete checklist.

Question 20

What is PMI and how can I avoid it?

Accepted Answer

PMI (Private Mortgage Insurance) protects the lender if you default. It's required on conventional loans with less than 20% down and typically costs 0.5-1% of the loan amount annually. You can avoid it by putting 20% down, using a piggyback loan (80/10/10), or choosing a lender-paid PMI option (higher interest rate). PMI automatically ends when you reach 22% equity.

Question 21

What are closing costs and how much should I expect?

Accepted Answer

Closing costs typically run 2-5% of the purchase price in Massachusetts. They include: lender fees, appraisal, title insurance, attorney fees, recording fees, transfer taxes, escrow account funding, and prepaid items (insurance, property taxes). On a $500,000 home, expect $10,000-$25,000 in closing costs.

Question 22

What is title insurance and do I need it?

Accepted Answer

Title insurance protects against defects in the property's title (unknown liens, forgery, errors in records). The lender requires a lender's policy; an owner's policy (protecting you) is optional but highly recommended. It's a one-time premium paid at closing. In Massachusetts, your attorney typically handles the title search and insurance.

Question 23

What is the Closing Disclosure and when do I receive it?

Accepted Answer

The Closing Disclosure is a 5-page document detailing your final loan terms, monthly payment, and closing costs. Federal law requires you receive it at least 3 business days before closing. Review it carefully and compare it to your Loan Estimate. Report any discrepancies to your lender immediately.

Question 24

What should I do at the final walkthrough?

Accepted Answer

The final walkthrough (usually 24 hours before closing) is your last chance to verify: agreed-upon repairs were completed, all appliances and fixtures are present and working, no new damage has occurred, the home is in the same condition as when you made your offer, and the sellers have moved out. Bring your inspection report as a checklist.

Question 25

What do I need to bring to closing?

Accepted Answer

Bring: government-issued photo ID (sometimes two forms), certified or cashier's check for closing costs (your attorney will provide the exact amount), proof of homeowner's insurance, and any documents your lender or attorney requested. Don't bring personal checks—they won't be accepted for large amounts.

Question 26

What first-time buyer programs are available in Massachusetts?

Accepted Answer

Massachusetts offers several programs: MassHousing loans (competitive rates, down payment assistance), ONE Mortgage (no PMI, below-market rates), MassDREAMS (down payment grants for certain buyers), and city/town-specific programs. Many require homebuyer education courses and have income limits. Check MassHousing.com for current offerings.

Question 27

Do I qualify as a first-time buyer if I owned a home before?

Accepted Answer

Many programs define 'first-time buyer' as someone who hasn't owned a home in the past 3 years. If you owned previously but haven't in 3+ years, you may still qualify. Some programs have exceptions for single parents who only owned with a former spouse. Check specific program requirements.

Question 28

Are there tax benefits for first-time home buyers?

Accepted Answer

Yes! Benefits include: Mortgage interest deduction (itemizing required), property tax deduction (up to $10,000 combined with state/local taxes), and Mortgage Credit Certificate (MCC) in some areas. First-time buyers can also withdraw up to $10,000 from an IRA penalty-free for a home purchase. Consult a tax professional for your specific situation.

Question 29

What should I do immediately after closing?

Accepted Answer

Priority tasks include: change the locks, set up utilities in your name, update your address with USPS/DMV/employers, file for homestead declaration (protects equity from creditors), review your deed recording, set up automatic mortgage payments, and keep all closing documents in a safe place. Schedule any immediate repairs or improvements.

Question 30

What is a homestead declaration and should I file one?

Accepted Answer

A Massachusetts homestead declaration protects up to $500,000 of your home equity from creditors (with exceptions for mortgages and taxes). It's free to file and provides valuable protection. File at your local Registry of Deeds—you can do this yourself or have your attorney file it for a small fee.

Question 31

When is my first mortgage payment due?

Accepted Answer

Your first payment is typically due on the first of the month, at least 30 days after closing. If you close on March 15, your first payment would be May 1 (you pay April's interest at closing). This gives you a brief payment break but isn't 'free money'—you're paying interest during this period.

First-Time Buyer FAQ

Getting Started

The Massachusetts Process

Making an Offer

Home Inspections

Mortgages & Financing

Closing Process

First-Time Buyer Programs

After Closing

Still Have Questions?