3% Down Mortgage, Anyone?
The mortgage option that allows home buyers to qualify with income from non-borrower household members just got a service boost, and it was confirmed by government-sponsored Fannie Mae last Tuesday, July 26. HomeReady is Ready to present you with a better and more exciting service, and many home buyers should feel excited-- among the changes implemented are:
- Occupant borrowers on a HomeReady loan can purchase other residential properties
- Homeownership education is no longer a requirement for limited cash-out refinance transactions
Fannie Mae is helping with the beautiful change by making it easier for lenders to determine a borrower's eligibility: it recently increased income limits to "100% of area median income in all areas, except low-income market tracts that have no limit." The recent change also cancels out the need for landlord education for HomeReady loans secured by two-, three-, or four-unit properties.
Another bonus is an alternative option on how you can meet the homeownership education requirement: attend a one-on-one counseling session with a HUD-approved nonprofit counseling agency to help you understand the home buying process, learn the responsibilities that come with home ownership, the importance of making and meeting timely mortgage payments, etc.
HomeReady is a program launched by Fannie Mae in 2015 to target low-income borrowers as determined by the U.S. Census Bureau. What sets HomeReady apart from other conventional mortgage providers is that "it factors non-borrower household members’ incomes into applicants’ eligibility." Applicants can include borrowers in their loan that aren't living in the home like their parents; rental income that may be earned by the borrower from renting a property (or even a room of the property!) can also be considered. Qualified home buyers are allowed by HomeReady to buy a home for as little as 3% down.
Preparing for your HomeReady Loan Application
As with any other mortgage provider, an individual wanting to buy a home has to make sure that his credit standing will be deemed favorable by the lending institution. Your credit score will detemine your eligibility as a borrower, and for how long and with how much interest rate your fees will look like. Therefore, it is important to take care of the small things early on: pay your credit card and bills on time, and have some savings stashed in the bank to make your financial standing look more stable.
Are you interested to buy a home using HomeReady? Cain Realty Group is willing to help! Get in touch with us and we will assist you with finding the right home and getting the financing you can afford.
This post was based on Jill Krasny's Credit.com article that was featured on Realtor.com.