Guest Blogger: Nathan Hartseil of First Home Mortgage
Got a College Student in Boston?
Rent costs have you doing a double take?
What if you bought a condo instead?
Many folks are incredulous when I tell them that they are able to purchase a single unit (condo, townhouse, single family) residence for their child here in Boston at the same “market best” terms that they might get themselves – and that these loans are available with as little as 3.5% down, up to the generous local limit of $688,850 (as of this writing, October 2019).
Perhaps your student works, but doesn’t make enough to support the unit on their own?
Fannie Mae, Freddie Mac, and the Federal Housing Administration all allow a parent to “cosign” the mortgage – combining the income, assets, and qualifiers of both the student and the parent or family member on the mortgage application.
Perhaps your student is just starting out on their own, and you plan to visit often? Purchasing a “second” or “occasional” home in Boston, even without their help - just 10% down assures that your student has a place to call home, and that you will always be able visit.
As long as your student (or parent, or disabled relative of any age) occupies the home as their primary residence for 1 full year, there are no restrictions (on the mortgage side) on roommates, future rentals, or any other customary uses…. A property that serves as a college home base can easily be converted to an income producing investment upon graduation.
What might this look like?
As of this publication, 30 year fixed rates are in the 3s-4s. A 3-bedroom condo directly on the Green Line off student centric Commonwealth Avenue is currently available for $500,000. Presuming a 760 credit score and a 5% down payment, Apr 4.05%:
Principal and interest: $2,268
Property Taxes: $268*
Condo Fees: $340
Mortgage Insurance: $100
Homeowner’s Insurance: $50-100
Total monthly expense: Around $3000
(*Boston also offers discounted taxes to primary residents, which will further reduce this expense by about $200, under the Property Tax Exemption Personal Exemption.)
With 2 paying roommates, your student’s expenses on monthly housing could be substantially reduced, while building equity to realize upon graduation. If Boston’s popularity and average rents are any indication, holding the property as a rental could prove lucrative as well.
Ready to dive in to a search? Click here to get started. Or contact Cabot & Company to connect with an experienced agent to help guide you.
This is not a commitment to lend. Terms and conditions of programs, products and services are subject to change. All loans are subject to credit approval and property appraisal. Certain restrictions may apply on all programs. NOT ACCEPTING NEW YORK APPLICATIONS. First Home Mortgage Corporation of America, First Home Mortgage Services, Maryland First Home Mortgage Company, and First Home Mortgage Company of Maryland are d/b/a's of First Home Mortgage Corporation. First Home Mortgage Corporation is licensed in Connecticut, Delaware, District of Columbia, Florida, Georgia Residential Mortgage Licensee, Indiana, Kentucky, Maine, Maryland, Massachusetts Mortgage Lender and Broker (Lic. #MC71603), Michigan, Licensed by the New Hampshire Banking Department, Licensed by the New Jersey Department of Banking and Insurance, North Carolina, Pennsylvania, Rhode Island Licensed Lender and Broker, South Carolina, Tennessee, Virginia, West Virginia. Equal Housing Lender. First Home Mortgage Corporation.