Because Fannie Mae home loans are not available directly from the association itself, borrowers must go through an approved mortgage lender. A mortgage lender is a bank, financial institution or other finance company that provides upfront funding for the purchase of a home. Most Americans do not have the means to pay for a home outright, so they take out a home loan to finance the cost into monthly payments.
To offer Fannie Mae home loans, mortgage lenders must go through a federal approval process. Only approved lenders may sell these types of mortgages. Interested in a HomeReady mortgage or any other Fannie Mae home loans? There are several ways to find approved mortgage lenders and get started.
It is always best to shop around for mortgage lenders and compare your options to ensure you are getting the best deal. Lenders may have different Fannie Mae mortgage rates, loan types and credit qualifications.
You can find approved lenders on the Fannie Mae home loans website or do a quick online search of your own. Make sure to do some research into the lender to ensure they are approved to sell Fannie Mae loans.
Once you find an approved lender, it’s time to apply for a home loan. The Fannie Mae home loan application is known as the Uniform Residential Loan Application. All approved lenders use this form to evaluate the qualifications of potential borrowers.
As you complete the Fannie Mae mortgage application, you will be asked to provide a slew of personal, financial and employment information, such as:
- Full name
- Social Security Number (SSN)
- Date of birth
- Name and address of previous employers
- Total household income
- Total monthly debts
- Assets
- Life insurance policies
- Stocks and bonds
Generally, to qualify for Fannie Mae home loans, borrowers must have a debt-to-income (DTI) ratio of no more than 36%. Some lenders may approve borrowers with DTIs as much as 45% if they have excellent credit.
Some borrowers applying for Fannie Mae home loans are required to complete Homeownership Education. The course reviews how to choose a loan, how to determine a budget and the process of closing on a home.
The following borrowers must complete Homeownership Education:
- At least one borrower when all borrowers are first-time buyers.
- Borrowers with no credit score.
- At least one borrower if all borrowers have non-traditional credit.
The HomeReady mortgage from Fannie Mae allows you to put a down payment of as little as 3%. However, this does not automatically qualify you for a loan through the lender. The larger the down payment, the more likely it is to get approved.
All borrowers looking to secure Fannie Mae home loans must meet the minimum credit requirements set by Fannie Mae and individual lenders. In most cases, borrowers must have scores of at least 620. However, some lenders may have higher minimum requirements.
The HomePath program offered by Fannie Mae offers another perk for prospective homebuyers. Continue reading to learn more.
By Admin –
