Home Loans Arizona - California - Nevada - Utah

Peoria AZ HomeReady loan program, What is it and who does them

August 22nd, 2019 5:59 PM by Nathan Rufty

Fannie Mae launched a new First Time Home Buyer program called HomeReady designed to encourage home ownership in Peoria AZ. For those clients looking for larger properties or that have higher credit scores, HomeReady is an excellent choice. As a home buyer, our team will provide you with all the tools and a customized analysis to ensure you are getting the best loan program at competitive rates to suit your needs. We are dedicated to you – the home buyer – and to the principle that all transactions should be on time and as agreed. 

HomeReady mortgages provide the greatest benefit to people who plan to share the costs of the loan with other family members. Most mortgage lenders base their approval process solely on the borrower's personal income. For HomeReady loans, Fannie Mae permits non-occupant co-borrowers to add their financial support to the process. This means that parents or relatives can help boost a borrower's chances of securing approval for a mortgage, even if they don't plan on living in the purchased property.

Even if you don't have any co-borrowers, the HomeReady loan will count the contribution of people living with you as compensating factors. While their incomes won't be added to yours in the approval process, they can help you secure approval in situations where your debt-to-income ratio is higher than normal. This includes not only immediate family members but also roommates and boarders who can prove that they've been with you for at least one year. If your new home has any detached living units like a basement apartment, you can also propose to find a tenant and add the estimated rent as part of your income in the application.

Peoria AZ HomeReady Home Loan Benefits:

  • Lowers down payment and credit score requirements
  • Allows you to accept larger gifts in down payment and closing
  • Reduces mortgage insurance and allows you to cancel at 80% LTV
  • Permits family or friends to co-sign on your home loan
  • Income from others in your house can help you get approved

While it is less difficult to get a HomeReady loan than a more traditional loan it is also important to understand all the requirements and responsibilities that come with buying a Peoria AZ  home. Here are some common concerns and questions for HomeReady Mortgages:

How does a HomeReady mortgage make it easier to qualify?
Why Should I Own Rather Than Rent?
Home Much Can I Borrow

How does HomeReady mortgage make it easier to qualify?
The most notable difference is that HomeReady uses flexible rules to determine applicants’ debt-to income ration. The HomeReady 

program’s requirements are more flexible in whose income may be included in your mortgage application– For instance, you may be able to rely on income:

from another adult living with you, like an adult child, who also contributes to the income in the household
Family and friends who might be helping you pay the mortgage, but don’t live with you
rental income from leasing a basement apartment to help pay the mortgage?

Why Should I Own Rather Than Rent?
Homeownership has many benefits. Some of them include having a home where you can do whatever you want with it — paint it, decorate it, you name it! Besides making it your home, there are other benefits related to your home purchase loan. You may, for example, be able to claim income tax deductions for interest payments under your mortgage. Plus, by making regular monthly payment under an amortizing loan, you will build up your own equity, and not your landlords.

How Much Can I Borrow
Most loan programs require that your total debt be less than 45% of your gross monthly income. That percentage includes the new mortgage payments, any car loans, student loans, credit card, and any other debt you have occurred. It does not include expenses like cable bills, utilities, gym memberships and such. However, HomeReady does have flexible debt to income guidelines. If you have a history of paying your bills on time, then you may qualify for higher debt to income ratios up to 50% of your income.

You also need to think personally how much debt you can live with. Take time to determine how much debt you prefer to manage and if it is an amount you can one day pay off.



My Favorite Blogs:

Sites That Link to This Blog: