Financing help · Greater Boston
When the payment doesn’t work, the deal often still can.
Rate buydowns, assumable loans and a few well-placed credits can turn a “we can’t afford it” or a stale listing into a closing. Here’s how each one works, and when it’s worth a call.
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Rate buydowns
A buydown uses money paid at closing to lower the interest rate, either for the first year or two or for the life of the loan. The money can come from the buyer, the seller, or in some cases the builder.
Temporary buydown (2-1 or 1-0)
The rate starts lower and steps up to the full note rate after one or two years. It eases the early years of ownership. Many lenders still qualify you at the full note rate, so it helps cash flow more than buying power.
Permanent buydown (discount points)
Paying points at closing lowers the rate for as long as you keep the loan. Whether it pays off depends on how long you expect to stay before selling or refinancing. Your loan officer can show you the break-even point.
Seller-paid buydown vs. a price cut
For a seller, the same dollars spent on a buyer’s buydown can lower that buyer’s payment more than an equal price reduction would. How much a seller can contribute depends on the loan type, so we confirm limits with the buyer’s lender before it goes into an offer.
Take over an existing loan
Assumable loans
With an assumable loan, the buyer takes over the seller’s existing mortgage, including its rate and remaining balance, instead of starting a new one. When that rate is lower than today’s, it can change what a buyer can afford.
Which loans qualify
FHA, VA and USDA loans are generally assumable with the loan servicer’s approval. Most conventional loans are not, because they contain a due-on-sale clause.
The buyer still has to qualify
The servicer reviews the buyer’s income, credit and assets much like a new loan. Assumptions also tend to take longer than a new mortgage, so the purchase contract needs a realistic timeline.
VA loans: what sellers should know
A buyer who isn’t a veteran can assume a VA loan, but the seller’s VA entitlement may stay tied to that loan unless a qualifying veteran substitutes theirs. Sellers should understand this before agreeing.
How to find one
Ask about the existing loan type before you tour. We check with the listing agent, and some listings already note an assumable loan.
When the numbers don’t quite meet
Closing the gap
Most deals that fall apart over financing are short by a specific amount for a specific reason. Naming the gap is the first step to closing it.
The assumption gap
On an assumption, the buyer covers the difference between the price and the remaining loan balance. That can be cash, a second mortgage from one of the few lenders that offer them behind an assumption, or seller financing for part of it.
Down payment and closing costs
MassHousing and the Massachusetts Housing Partnership’s ONE Mortgage program serve eligible first-time buyers, and the City of Boston and some towns run their own assistance programs. Gift funds from family also work when they are documented the way the lender requires.
Seller credits
A seller can contribute toward the buyer’s closing costs or a buydown, within limits set by the loan type. It is often the cleanest way to bridge a small gap without changing the price.
The appraisal gap
If the appraisal comes in below the price, the options are to renegotiate, have the buyer cover the difference, or split it. An appraisal-gap clause in the offer decides this up front, so nobody is surprised.
How we work it out with you
- 1
A short call
Tell us what you’re buying or selling and where the numbers aren’t working.
- 2
A licensed loan officer runs the numbers
We bring in a loan officer who can quote real terms for your situation, with the required disclosures.
- 3
We build it into the offer
Buydown credits, assumption timelines and appraisal terms get written into the contract, not left to chance.
- Buyers: know which tools fit before you write an offer
- Sellers: compare a buydown credit with a price cut
- First-time buyers: find the assistance programs you may qualify for
Prefer to call? (781) 343-1840
Talk through your options
Free and no obligation. We reply within one business day.
Common questions
Are you a lender?
No. Namaste Boston Homes is a licensed real estate brokerage. We don’t make loans or quote rates. We work alongside licensed loan officers and structure the offer around the financing they confirm.
Is a temporary buydown better than lowering the price?
It depends on how long the buyer plans to keep the loan and what they need most: a lower payment early on, or a lower balance. Ask a loan officer to show both side by side for the same dollars.
How do I know if a home has an assumable loan?
Ask for the existing loan type. FHA, VA and USDA loans are the usual candidates. We check with the listing agent before you spend time on a showing.
I’m selling and my listing isn’t getting offers. Can financing help?
Often. A seller-paid buydown, closing-cost credits, or marketing an assumable loan can reach buyers who can’t make the payment work at today’s rates. We look at which fits your buyer pool before you cut the price.
Do first-time buyer programs apply in the suburbs, not just Boston?
Statewide programs such as MassHousing and ONE Mortgage are not limited to the city, though eligibility rules apply. City of Boston assistance is for Boston purchases, and some other towns run their own programs.
Related: first-time buyers · H-1B mortgages · seller net proceeds