You’ve made the big decision: You’re ready to buy a home! What’s next? A great first step is to receive a Pennymac BuyerReady Certification. With this certification in hand, you’ll know precisely how much you’re qualified to borrow. It’s about as close to obtaining your mortgage as possible without actually finalizing it.
Let’s explore what a BuyerReady Certification is and how it can give you peace of mind as you begin your home buying journey.
What Is a BuyerReady Certification?
The BuyerReady Certification process is Pennymac’s unique loan certification process that confirms precisely how much of a mortgage you are likely to qualify for.
Here’s how it works:
- Talk to a Pennymac Loan Expert and complete a mortgage application.
- Submit documents that will provide an overview of your finances. Documents typically include:
- Recent pay stubs
- W-2 Forms and 1099 statements
- Bank statements
- Statements for other assets, such as stocks, bonds, IRAs and 401ks
- Additional documents related to income, like child or spousal support, rental property income or gift funds
- Our underwriters will review your documents, credit history, income and debt-to-income (DTI) ratio. We’ll also consider the type of property you’re planning to purchase.
- You’ll receive BuyerReady Certification confirming you are likely to be approved to borrow a designated amount, as long as certain conditions and the home meet requirements. While it’s not a loan finalization, it is a significant move in that direction. Keep in mind that a BuyerReady Certification is valid for 120 days. (If you do not find a home within that period, you can apply for a new Certification with your most current financial information.)
- Begin your house hunting with confidence! You’ll know exactly which homes fit your budget and be ready to put in your offer.
How Is a BuyerReady Certification Different Than a Pre-Qualification?
As you embark on the path to homeownership, you may hear about mortgage pre-qualification. How does a BuyerReady Certification differ from mortgage pre-qualification?
While a pre-qualification also involves working with your lender to determine how much of a mortgage you can afford, BuyerReady Certification takes it further.
A BuyerReady Certification is used to provide proof of your financial ability to secure a home loan for a specific amount, given there are no materially adverse changes to your situation or to the loan requirements, and the property you want to buy is determined as eligible. It can also be seen as a conditional approval — meaning, you are likely to be approved for the loan as long as you and the property meet all of Pennymac’s conditions.
Mortgage pre-qualification is a more informal process than BuyerReady Certification. It doesn't require any official documentation, and is therefore considered more of a ballpark estimate than a precise confirmation of the specific amount you may be able to borrow to buy a home.
The Benefits of Receiving a BuyerReady Certification from Pennymac
Obtaining BuyerReady Certification has many benefits that can help facilitate the homebuying process and make it a more positive experience.
Enjoy peace of mind as you shop for a home
BuyerReady Certification shows the maximum loan amount you would likely qualify for, so you can limit your search for homes that fit your budget. You can avoid looking and falling in love with homes out of your price range. And remember, just because you have a BuyerReady Certification for a certain dollar amount, that doesn’t mean you have to borrow the entire sum . You’ll also want to consider other expenses that come with homeownership, such as taxes, association dues and new home furnishings, so leaving some wiggle room in your monthly budget could be very useful.
Get ahead of competing buyers
Many sellers prioritize accepting offers from potential buyers who have been BuyerReady Certified over those who are only pre-qualified. It shows that you’re a serious, credible home buyer who can secure adequate funding to proceed with the purchase.
Move faster on your offer
Found a perfect home? Since you already know what you can afford, you can make an offer immediately — a big plus in a competitive market.
Expedite loan processing
Since you’ve already submitted the majority of the documentation and information you’ll need for the mortgage, your loan process can be smoother and faster.
Qualifies you for rate lock
BuyerReady Certified homebuyers qualify for Pennymac’s Lock & Shop program, which allows you to lock in a rate before locating a property. Protect yourself from future rate increases and potentially save thousands of dollars in the lifetime cost of your mortgage.*
For an estimate of how much money you may be able to borrow, check out our Pennymac mortgage calculator. And if you’re ready to start home shopping, talk to a Pennymac Loan Expert and get BuyerReady Certified today!
*Lock & Shop Program allows consumers who have a Pennymac BuyerReady Certification for a purchase loan with Pennymac to lock a rate prior to locating a property. The program requires a non-refundable fee of $595 due at the time of the rate lock. Consumers with a Pennymac BuyerReady Certification for a purchase loan with Pennymac must meet appropriate underwriting conditions to obtain a mortgage loan. Consumers may choose between a 60-day, 75-day or 90-day lock period. Consumers must initiate a mortgage loan application for a specific property and be under purchase contract for the property at least 30 days prior to lock expiration in order to extend the locked rate. All rate lock extensions are subject to Pennymac’s standard rate lock extension fees. After the rate lock and subject to favorable market conditions, consumers may be eligible for a one-time reduction in rate once the loan application for a specific property has been initiated (0.50 % maximum reduction in interest rate allowed). Eligible loan products are Conventional Fixed, Conventional ARM, FHA Fixed and VA Fixed. Program excludes Jumbo, refinance, third-party and in-process loans. Program subject to termination in Pennymac’s sole discretion and without notice.