Living the American dream requires a suitable mortgage. The right loan can make your goals of homeownership a reality. HomeReady is one such loan that brings affordability, flexibility, help for today’s home buyers, and more inventory to a suffering market. But can you qualify for it?
What is a HomeReady Loan?
The HomeReady loan is meant to help low- to moderate-income borrowers become homeowners. The program is ideal for first-time homebuyers and for borrowers who have purchased homes in the past as long as they meet specific lending guidelines. One of the biggest perks of the loan is that borrowers can pay a smaller down payment of just 3%. Plus, they get flexible underwriting terms.
How Do You Apply?
Getting a HomeReady loan looks a lot like any other conventional mortgage application. However, there are unique requirements one needs to meet. Of course, you first need to find a lender who offers a HomeReady loan. Then, you submit financial documents that prove income, credit, and employment. You also need to be under the HomeReady mortgage income limit. What sets a HomeReady loan apart is that non-borrower household members, such as parents or roommates,’ income may count. This can help many families qualify for the home of their dreams.
Another perk is that there is a homebuyer education course that all homebuyers looking to utilize the HomeReady mortgage must take. This brief course teaches the basics of mortgages online and helps all new and previous borrowers learn how to manage their mortgages and familiarize themselves with how to handle the financial responsibilities of a mortgage.
HomeReady Mortgage Income Limits
One of the most important things an applicant will want to be sure of is meeting all the prerequisites, such as whether or not they meet the HomeReady loan limits. Typically, most HomeReady limits will fall under 80%, although it may differ depending on the specific area in which the potential buyers will be purchasing the home.
Depending on the specific area of the property, the HomeReady limit will depend. In most cases, the limit will be larger in locations where the standard of living is much higher. Take, for example, the high-cost limits for any location-based property. Homebuyers looking in these areas will find that quite a few of them have larger limits than other areas. To ensure the maximum amount of homeowners benefit from the program, HomeReady limits will cap out by area at or under 80% of the average median income (AMI).
To figure out if you are eligible, your lender or real estate professional can help you find the HomeReady income limit for your target area. You might even be able to visit Fannie Mae’s website and use their Lookup Tool!
Why Do Income Limits Matter?
The income limits are pretty important when it comes to finding out if you can use the HomeReady program. Being over it could mean you can’t get the program loan and have to look into getting another mortgage. If you fall within the income limits, then this program could be the right cost-effective mortgage for you.
Knowing about these HomeReady income limits helps you gauge your own background to decide if you’re a good candidate. You don’t want to waste your time and energy on a loan that you cannot qualify for.
Path to Affordable Homeownership
HomeReady loans represent a wonderful opportunity for borrowers eager to own property and aren’t stacked to the brim with money for a down payment. Ready to buy a house? Get pre-approved to