The newest, most attractive home loan program out in the mortgage market right now is the HomeReady™ mortgage program. This program allows lenders to qualify for a home loan by incorporating additional income from people who live in the residence with the buyer. They don’t even have to be included on the loan, just their income information is needed to qualify. You may have heard of MyCommunityMortgage which is the home loan program that the HomeReady™ program replaced in 2016.
HomeReady™ Qualifications
This new program which is also known as an “alternative mortgage” program will allow a borrower to qualify for a home loan by implementing another individual who resides in the home’s income information for qualification, but that individual doesn’t need to be listed on the mortgage. The HomeReady™ mortgage program also allows a borrower to list an individual on the mortgage even though they may not reside in the house. The purpose of this is to use this individual’s income to help you qualify for the home loan, much like a co-borrower, but they don’t live there. Basic rule of thumb is, as long as your income including any additional income meets the DTI ratio requirement of at least 43% you can qualify for the HomeReady™ Mortgage Program.
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Worried if your credit score is going to have an effect on whether you’re able to qualify? You can still qualify for the HomeReady™ program even if your credit isn’t that good, as long as your credit score is a 620 not only would you qualify you would only need to put 3% down. This program is available to first time home buyers and repeat buyers, even refinancing is an option with the HomeReady™ program. This program was originally designed as part of a Government campaign. The purpose of the HomeReady™ program was to encourage large Hispanic families who live in large groups to apply for the HomeReady™ program and utilize everyone’s income during the qualifying process.
Borrowers who choose to use the HomeReady™ mortgage program will typically have less qualification factors than a traditional home loan program. In addition to a decent credit score, borrowers will need to complete an online course that will help prepare them for the home buying process. It also provides support for after the home has been purchases and how to maintain sustainable homeownership.
Borrowing Limits and Interest Rates
Lenders who offer this type of loan program aim to see your total debt to be less than 30% of your gross monthly income. The percentage includes current mortgage or rent payments, any vehicle loans, student loans or credit card payments you may have. It’s important to know exactly what you can afford as well. What you make on paper could be different than what you can actually afford. Don’t get overwhelmed by getting into a loan you can’t really afford. The HomeReady™ mortgage rate is set by the approved lenders. Loan rates change constantly and will differ depending on the lenders. This is why it’s so important to shop around to different lenders and compare their options, guidelines and rates to find which lender is best for you. Other factors that may affect the HomeReady™ loan rates could be;
- The Economy
- The Financial Market
- Other Conventional Mortgage Rates
To start your HomeReady™ lender search, click the button below and within minutes you’ll be matched with a qualified lender eager to help you will all your home loan needs and answer any questions you may have. It’s easy to get started and best of all it’s free!
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