Ally Home Loans, the direct-to-consumer mortgage arm of Ally Bank, announced that it has broadened its product suite with the addition of the HomeReady mortgage loan, a Fannie Mae product designed to serve creditworthy, low- to moderate-income borrowers.
Consumer-friendly features of the HomeReady loan include expanded eligibility for underwriting home loans, as well as the following benefits:
- Low down payment. Down payments for first-time and repeat homebuyers as low as 3 percent.
- Flexible sources of funds. Can be used for the down payment and closing costs with no minimum contribution required from the borrower's own funds (1-unit properties).
- Affordable and cancellable monthly mortgage insurance (MI). Reduced MI coverage requirement above 90 percent LTV; cancellable MI (restrictions apply).
- Homeownership course. The online Framework® course prepares borrowers for sustainable home-ownership; other education and advising options are available.
"Home ownership is part of our American culture, and as we continue to ramp up our direct-to-consumer mortgage business we recognize that home buyers need customized solutions to suit their specific circumstances," said Diane Morais, Ally Bank President, Consumer & Commercial Banking Products. "The innovative underwriting flexibilities for financing homes offered by the Fannie Mae HomeReady program provide consumers with an alternative home loan option."
Similar to all Ally Home product offerings, HomeReady will include access to the Ally Home TeamSM of dedicated loan experts. More information about buying or refinancing a home, including current rates, loan types, and three interactive calculators (Affordability, Refinance, and Loan Payment) can be found on the Ally Bank website under the 'Home' tab.
Financing a home purchase
According to the National Association of REALTORS® 2016 Profile of Home Buyers and Sellers¹, buyers continue to see purchasing a home as a good financial investment, and 88 percent of nationwide purchases were funded with a mortgage, with an average loan-to-value ratio of 90 percent. As home values have started to rise again, the 20 percent down payment requirement for a conventional loan has the potential to represent a challenge for nearly two-thirds of home buyers who rely on savings to fund their down payment.
"Many new home buyers are unaware of the different financing options that exist, particularly those that have a lower down payment because they have yet to build up equity in a home," said Ally Home executive Craig Evans. "We want to offer consumers suitable alternatives for financing their new home, and we are very excited that this product will open up the possibility of homeownership for many buyers."