A majority of home buyers whether it be their first time buying a home or their 10th, down payments are usually the biggest headaches for home buyers. With the HomeReady™ Mortgage Program from Fannie Mae that headache is alleviated. The HomeReady™ Mortgage Program offers 3.0% down payment for first time home buyers.
Benefits to the HomeReady™ Mortgage Program
Besides the wonderful benefit of 3.0% down payment requirement, the next best thing about the HomeReady™ Mortgage Program is the flexible source of your down payment. You can use money out of pocket, you could borrow from your 401(k), you could use “gift money” from an employer or family member, there’s a partial down payment assistance program you are welcome to utilize, or you could even use other income sources from someone who may live with you, but won’t be included on the mortgage. Another great benefit to the HomeReady™ Mortgage Program is the easy qualification requirements. Here are a few of the qualifying requirements;
- Low Down Payment and Options.
- Ability to include income from a non-occupant borrower(on the loan, but doesn’t live on the property).
- Ability to include income from a non-borrower occupant(lives on the property, but not on the loan).
- No Mortgage Insurance Premium (MIP) or Private Mortgage Insurance (PMI) cost due up-front.
- Offers flexible mortgage qualification requirements.
How Do I Know if I Qualify For a HomeReady™ Mortgage?
No matter what kind of Mortgage program you’re looking into, they all have a list of qualifications. Your best bet is to do your research to figure out what mortgage program fits your situation and needs the best. On top of searching for the perfect mortgage program, you’ll also need to find the perfect lender. Keep in mind not every lender will offer all the mortgage programs and those that do may have conflicting guideline requirements so it’s important to shop around and compare lender’s qualifications, rates and mortgage programs. Things to keep in mind or even to ask your lender when you’re doing your research are;
- What loan program best fits my family’s needs and situation
- What will my monthly payments look like
- How much money will I need to put down
- What documentation will I need to provide
After you have found the perfect loan program and lender and you have applied, the next step while awaiting your approval is educating yourself, especially as a first time home buyer. We suggest the first time home buyer education class.
First Time Home Buyer Education Class
The HomeReady™ Mortgage program does require first time home buyers to take a first time home buyer education class, especially if you plan to utilize the down payment assistance program. While these classes are incredibly beneficial to first time home buyers, not every first timer will have to take the class. If your lender determines you need to take the first time home buyer class, they can help direct you to the correct class, stay clear of any real estate agents offering the first time home buyer class, these classes are usually just a way for real estate agents to try to get you to use their lender.
First Time Home Buyers: Credit Criteria
Depending on which mortgage program you use will determine the specific credit criteria. You may be able to qualify for one program, but be denied for another. Below shows disqualifying credit criteria factors, if any of these pertain to you, you may need to focus on paying off debts and rebuilding your credit before looking into buying a home;
- Poor Rating Credit Score (Anything Below 600)
- Delinquent Debts (Owed Back Taxes or Late Student Loans)
- Multiple Unpaid Collection Accounts
- Large Amount of Unpaid Collection Accounts
- More Than Three Late Mortgage/Rent Payments
- Unpaid Tax Liens
- Chapter 7 or Chapter 13 Bankruptcy
- A Foreclosure Within The Last Three Years
First time home buyers usually have lots of questions when it comes to buying a home and all the qualifications, rates, and different programs out there. It can get quite confusing where to start, but good news for you is, you can start right here. Click the orange button below to be matched with a qualified lender who can help you with a HomeReady™ Mortgage and answer any questions you have.