Is a HomeReady Mortgage Right for You?
The home buying process is different from renting, so you might question your ability to secure a mortgage with limited income and a small savings account. However, Cherry Creek Mortgage is committed to helping as many people as possible get the home loan they deserve.
It’s important to understand that you don’t need perfect circumstances to qualify for some mortgage loans. Whereas some programs have tighter requirements and aren’t the right fit for you, you’ll find that other programs are tailored to your needs.
If you’re a first-time homebuyer looking for a loan with flexible guidelines, the HomeReady mortgage might be the right product for you.
Here’s what you need to know about this conventional loan.
1. You Only Need 3% Down
The HomeReady mortgage is perfect if you meet the income and credit requirements for a mortgage, yet you have limited cash for a down payment.
If you don’t qualify for a VA home loan or a USDA home loan, you may be required to put down cash when purchasing a home. But while a standard conventional product requires a minimum 5% down, the HomeReady program only requires 3% down. This is less than an FHA home loan’s minimum down payment requirement of 3.5%.
Less out-of-pocket can help you purchase a home sooner. But if you put down less than 20%, you may have to pay mortgage insurance. The good news with HomeReady is that you can stop paying mortgage insurance once the property gains 20% equity.
2. Available to Borrowers with Low-to-Moderate Income
The HomeReady mortgage program is designed specifically for borrowers with low-to-moderate income. To qualify, your income cannot exceed 100% of the median area income.
Along with a lower down payment, this mortgage is also affordable because it has lower mortgage insurance costs.
There’s also a unique feature with this loan. If a roommate or relative will live with you long-term and contribute to the monthly mortgage, you can combine their income with your income when qualifying for the mortgage, even if their name will not appear on the loan.
3. You Must Have a 620 Credit Score
The HomeReady mortgage program is also an option if you have a lower credit score. Qualifying for this home loan requires a minimum credit score of 620.
4. You Must Attend Homebuyer Education
Because this home loan program is specifically for first-time homebuyers and those who haven’t owned in at least three years, homebuyer education is required. This education guides you through the process of homeownership from start to finish. You’ll learn about the buying process, financing, credit and how to successfully manage your monthly mortgage after closing.
This education is completed online at your convenience, and at least one borrower on the mortgage loan must finish the course.
HomeReady can make your dream a reality if you’re a first-time buyer searching for a low-down, affordable home loan solution. At Cherry Creek Mortgage, we consider it an honor to help you overcome any obstacles to homeownership and qualify for a mortgage.
Ready to take the next step? Contact us to learn more about this exciting program.