HomeReady Mortgage Program

Looking to own a home but not sure you can afford or even qualify for a mortgage?  You might be surprised by the terms of the HomeReady mortgage program, which is specifically designed for creditworthy low- to moderate-income borrowers, offering expanded eligibility for financing.  Note that a credit score of at least 620 is recommended to qualify and further benefits are accessible with a credit score of at least 680.  If that sounds like you, here are several ways in which you can benefit from a HomeReady Mortgage.

Low Down Payment

You’re able to finance up to 95-97% loan-to-value (LTV) for the purchase of a single-unit principal residence, which means that if you’re having trouble coming up with a sizable down payment, you’ll be able to get a mortgage with as little as 3 – 5% of the purchase price of a home, plus fees.  Additionally, gifts, grants, Community Seconds program funds, and cash-on-hand are all permitted as sources of funds for the down payment and closing costs.  And this is not limited to first-time buyers, so you’re still eligible if you’ve purchased a home in the past.

Flexibility

HomeReady Mortgages support HomeStyle Energy, manufactured housing and HomeStyle Renovation type homes.  They also support expanded access to credit responsibility through underwriting with rental unit and boarder income and non-occupant borrowers such as a parent.  There is also no minimum contribution required from the borrower’s own funds.

Unlike standard requirements for other mortgages, HomeReady offers lower mortgage insurance coverage requirements for loans with LTVs greater than 90%.  Insurance is cancellable after the loan balance drops below 80% of the LTV, i.e., after home equity reaches 20% of the purchase value of the home.  Both of these features can lower your monthly payment when qualifications are met.  For those with a credit score greater than or equal to 680, there are risk-based pricing waivers which offer yet another route to better pricing.   

Qualifying Income

HomeReady can be used to purchase or refinance any single-family home, given a few requirements.  First, the borrower’s income must meet the eligibility limit.  Properties in low-income neighborhoods have no income limit while all other properties require that the borrower make 100% of the area’s median income.  Keep in mind, as mentioned previously, that income requirements can include flexible underwriting options such as a parent or other family member.

Education Requirement

Additionally, there is an education requirement which consists of an online Framework course which must be completed by at least one borrower on the HomeReady purchase transaction.  This isn’t just a requirement, however, it’s also a benefit to the borrower.  It provides an understanding of the full spectrum of home ownership so that borrowers may make a confident, informed purchase with peace of mind knowing what’s ahead in terms of responsibilities and costs.  Additionally, working one-on-one with an available counselor can help a borrower pick the right timing, the right house, and the best mortgage for his or her financial situation.  If a Community Seconds down payment is involved, borrowers may instead complete their education course or required counseling so long as it is provided by a HUD-approved agency and is completed prior to closing. See this link for more details. 

Those with a disability, lack of internet access, or other issues may utilize other available delivery methods of the education requirement by calling Framework’s toll-free customer service line (855-659-2267).  This education requirement benefits the borrower by helping ensure sustainable homeownership and a stable financial future with informed decision-making and responsible risk awareness.

Ready to take your first steps toward home ownership or looking to refinance your existing home mortgage?  Contact us so that we can help you put your dream of home ownership within reach.


Homeowner 101: Five Hacks for Easy Home Repairs

When you get the keys to your new house, are you prepared to fix common little problems like a clogged drain, or change out the air vents, or shut off the water? The one downside to owning your home is that you’re responsible for the maintenance, and you’re on the hook for the bill if you have to call in professional help. Since houses don’t come with owner’s manuals, these are the five most common home repairs or fixes you’ll face as a homeowner.

Clogged Drains

Clogged drains are some of the most common home repairs you’ll encounter. The first thing you need to know is that not all drain clogs are created equal. An assortment of unspeakable things go down the various drains in your house, and each one has a different fix.

Shower/Sink

Try a commercial drain cleaner, and if that doesn’t work, try a plunger–a plumber’s friend–to break up the clog.

Kitchen Sink

Try plunging the sink drain with a plumber’s friend first. If that doesn’t work, put a bucket under the sink and remove the sink trap–that’s where most sinks back up. If the clog is further down the line, you’ll need to go to a home improvement store and get an auger, or a plumber’s snake, to completely clear things out. The auger drops down the drain and you crank the wire until it hits the clog; keep cranking and it should break through.

Toilet

Again, try plunging first, then use the auger to try to break through the clog. If there’s already overflow, it might be time to abandon DIY and call the plumber.

For any drain clog, if you can’t get the clog to break up without a lot of work, call a plumber–the pipes are more delicate than you might think and a plumber charges a lot less to unclog a drain than to replace pipes.

Find Wall Studs

You could go to a home improvement store and buy a stud finder, but it’s easy to do if you know a bit about construction. Wall studs have to be at least 16 inches apart, and electrical outlets are usually placed at a stud so that the wires have a support. The baseboards are also nailed to studs, so look for nails under the outlets. Rap on the wall at that spot with your knuckle, you should hear a thunk. Rap three inches over and you should hear a hollow sound–the thunk is the stud. Measure 16 inches over, and you should find another one. The studs are a couple of inches wide, so you’ll have to play around to find the middle.

Replace An Air Filter

Air filters trap all the dust, dirt,and pet dander that are in your house, and your should replace or clean them monthly. If you have a permanent filter, it still needs to be washed out every month. First, remove the furnace cover and see what size filter you need. You can order them in bulk, or get them at any big box store. Once you have the right size, pull out the old one and slide the new one in; replace the cover. Repeat in thirty days.

Shut Off Water

If something is leaking and it’s not the roof, you’ll need to turn off the main water valve. That’s usually in your basement, or on an outside wall near the utility area of the house. If you don’t know where it is, go find it now–better now than when you’re standing in three inches of water. Turn the valve clockwise and the water to the entire house is turned off.

Finding the Squeaks

If your house creaks and squeaks, there’s not necessarily a ghost in residence–it could be a number of things.

Furnace Whistles

Cold ducts whistle when warm air comes through. Pad the ducts against wood framing so they don’t rattle, and make sure there’s nothing blocking the return.

Loose Hinges

When a hinge gets a little loose, it gets a little noisy. Take the hinge pin out and coat it with naval or petroleum jelly, and put it back. Slide it up and down to grease the channel until it quits squeaking. Squeaky hinges make for satisfying home repairs!

Hardwood Floors

Hardwoods shrink around the nails after awhile, causing squeaks when you walk across the room. You can fix it by going under the house and drilling a screw through the subfloor into the wood. Just make sure it doesn’t poke through on the other side. There are also nail systems that go through the right side of the floor and the nailhead pops off so it’s invisible.

Pacific Mortgage is here to help you through not only the mortgage process, but we’re around after you move in, too–so when you’re ready to buy a house, give us a call–we’re you’re lifelong mortgage partner.


Tips on Owning a Home: It’s More Than Just the Mortgage!

One of the most common misconceptions about home ownership is that you simply buy a house, pay the mortgage every month, and call it a day. However, the reality of owning a home is that it costs a lot more than just the mortgage!

In this blog post, then, we’re going to go over the full list of expenses that come with owning a home so that you can decide if you’re in the market to buy a home, or to continue renting as you’re currently doing.

  • Insurance: many lenders, especially from the so-called “big banks,” will require you to have homeowner’s insurance before giving you a mortgage. This premium varies from state to state, and different environmental factors — such as your area’s propensity for hurricanes, earthquakes, and flooding — can drive the price up significantly.
  • Property Taxes: again, this is an inevitable cost. Now, there are some mortgages that allow this to be built in — and paid — from the monthly mortgage payment, but in the end, this will also drive your monthly payment up to more than you thought before. Like insurance premiums, property taxes vary from state to state, and are dependent on the value of your home.
  • Utilities: you thought you had the “utilities” thing down pat when you were living in your first studio apartment, but the reality is, the utilities go up tremendously when you’re trying to heat, water, and provide electricity to a home with a few thousand square feet. Make sure you budget accordingly!

For more information about us and our services, contact us today.