Posted by Ever since the Mortgage Meltdown, several buyer-friendly home loan options have come back to life. HomeReady is one of those back from the dead mortgage products. Both first-time and repeat home-buyers can benefit from a low down payment HomeReady home loan.
Apply Now for a HomeReady Home Loan
Team@JeremyHouse.com
602.435.2149
HomeReady Home Loan Benefits
The HomeReady home loan program is probably one of the most buyer-friendly loan programs available. The first and most important goal behind HomeReady is to help low income families buy a home. The benefits of this great Conventional Loan option include the following:
- 3% Down Payment
- Reduced mortgage insurance
- Cash on hand for down payment/closing costs
- Debt to income ratio limits up to 50%
- Parent co-signers
- Boarder income allowed
- Competitive interest rates
HomeReady Loan is Based on Area Median Income
HomeReady has 2 rules that are especially relevant to confirming if a borrower can use the program. These 2 rules must be met in order be eligible. As a result, not all those that apply will be eligible. A borrower’s eligibility for a HomeReady home loan is based on these 2 factors:
- Subject property location
- Area Median Income
Calculating Maximum Income Caps
The HomeReady program uses 3 income tiers to determine borrower eligibility. Each tier defines the maximum income a borrower may earn based on the property’s census tract. The income tiers are:
No income limit when property is in a low-income census tract (31% of all US census tracts)100% of the Area Median Income allowed for property in a high minority tract or a disaster area (20% of all US census tracts)80% of the Area Median Income for all other property (49% of all US census tracts)
Apply Now for a HomeReady Home Loan
Team@JeremyHouse.com
602.435.2149
Home Ready not “New” Just Refreshed
First of all, HomeReady is not a “never before seen” mortgage product. When looked at closely the program seems like one that we have seen before. In fact, similar loans have been around for decades. For example, “My Community” was the HomeReady of the early 2000’s. In addition, many of HomeReady’s loan options are also found in other mortgage loan products.
Currently, FHA allows high debt to income ratios and allows parents to co-sign. Conventional home loans allow 3% down down payments. Much like HomeReady, USDA uses property and income eligibility factors. So, what is so special about HomeReady?
Apply Now for a HomeReady Home Loan
Team@JeremyHouse.com
602.435.2149
Rather than a buyer hunting and pecking for all of these great features, HomeReady combines them into one loan. In conclusion, a HomeReady mortgage offers home-buyers multiple benefits all wrapped inside the same loan product.
By Jeremy House