O down Payment home Loans

Prepayment for housing loans

Advantages and disadvantages of Zero Down Home Loans. All you need to know about MassHousing's zero down payment programme

In order to give first-time future home owners a foot up in the state's costly residential property markets, MassHousing has long been offering low-interest loans with minimum down-payments, premised on certain revenue entitlement criteria - most borrower qualifiers for 97 per cent funding through the quasi-public institution. MassHousing went one better on Monday and launched a new programme that allows borrower to take out a second credit to cover their down payment.

This is how the new programme works: MassHousing will offer "down payment assistance" that will cover up to 3 per cent of the price of a home or condominium up to $400,000. Even if you buy a home that exceeds $400,000, the total amount of down payment aid you can get is $12,000.

The deposit, however, is not a subsidy - it is a repayment you must make through a 15-year second mortgage bearing a 1 per cent interest fix and with no extra charges. In order to be eligible for the down payment support programme, you must have a minimum of 660 credits, a gearing of 41 per cent and an average or lower per annum domestic revenue than the region's average revenue.

Once you have made an enquiry for a real estate object, you can make a formal request for the MassHousing mortgages. MassHousing's majority of borrower are entitled to a home based guarantee that will cover up to 97 per cent of the total amount paid. Part of the claim procedure is the handling of the red tape for a second mortgages - the one that will cover the deposit up to 3 per cent or $12,000.

MasseHousing itself is not a creditor, but it works with a group of 150 financial institutions, cooperative societies and mortgages bank. After your quote is approved, you are tied to the two distinct MasseHousing mortgages that are supplied together - one for the majority of the loan and the other for the down payment.

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