4/7/2023 0 Comments Divvy homes for saleMany times, this income is from a small business, self-employment income, or contractor income.ĭivvy says they may ask for additional financial information and documentation if this is the case for you, but you won’t be automatically disqualified.īackground Check. One of the reasons some people have difficulty getting approved for a mortgage is that their income is hard to prove. These are W2s from employers, bank and direct deposit information, pay stubs that extend back a few months, and your most recent tax returns. You’ll prove your income by showing any documents you have. They’re also screening you to ensure that you’re likely to be ready to qualify for a mortgage within a few years. They want to see that you and any co-applicants are receiving enough income to cover the monthly payments on the home. Income Verification. Divvy looks at your income to determine your eligibility. If your credit report doesn’t contain all the information Divvy needs to proceed, they’ll let you know and may need to run a “hard” credit check (which can impact your credit score) to uncover the information they need. When the Divvy team looks at your credit report, they’re looking for your debt-to-income ratio, how responsible you are with using credit, any missed payments or loan delinquency, past foreclosures, evictions, or bankruptcies, and your overall FICO score. If you’re applying with someone else (a co-applicant), they’ll also be subjected to a soft credit check. Their screening process is not as strict as a traditional lender, but they do ensure that applicants meet the following requirements to be considered.Ĭredit Check. When you apply with Divvy Homes, the first thing they’ll do is run a “soft” credit check that doesn’t hurt your credit score. What kinds of applicants does Divvy work with?ĭivvy is careful to work with reliable applicants who are likely to make payments on time and eventually qualify for a mortgage. Divvy holds onto the savings payments they receive from the renter.Īt the end of the process, they give it back to the renter to serve as their down payment.Īs long as all other requirements are met, the renter can now qualify for a mortgage and can take over ownership of the home. The renter can then move into the home and begin making two monthly payments: Rent and an equity, or “savings” payment. Everything else is covered by Divvy Homes. Once the renter has found a home they want to buy, Divvy asks them to pay at least a 2% down payment. The renter is free to choose the home they want within their area.ĭivvy real estate agents and customer support staff guide the renter through this process, helping with everything from the home search to final negotiations with sellers. Right now, Divvy covers Atlanta, Cleveland, Dallas, Memphis, Phoenix, San Antonio, St. Once they’re accepted, they start looking for a home they’re interested in buying in one of the cities Divvy Homes operates in. How It Worksįirst, a renter applies to Divvy supplying financial and personal information. This enables them to get a mortgage and own the home they’ve been “renting.” There’s a little more to it, so let’s take a look at how the process works, its pros and cons, and whether it’s right for you. They allow renters to choose a home they’d like to one day own, make a small down payment, move in, and make monthly payments.Īll of this is done so that the buyer can earn equity in the home over a few years. Within about three years, the renters ideally will have bolstered their credit scores, earned equity in the home, and become eligible for financing. Their vision: “Instead of paying rent every month, getting no closer to homeownership, we’ll offer tenants the opportunity to build their credit scores, earn equity, and eventually get approved for a mortgage by using a modified rent-to-own arrangement.”ĭivvy Homes partners with people who want to become homeowners but are unable to get financing. In a nutshell, they act as a non-traditional lender, financing an otherwise unqualified buyer. Instead, they become long-term renters, which currently account for more than 36% of all households.ĭivvy Homes is on a mission to change the way this works through fractional ownership. That would prevent them from getting approved for a mortgage. The opportunity to own a home is financially out of reach for millions of Americans.Įxperian, one of the three consumer credit bureaus, found that 16% of Americans (that’s nearly 53 million) have credit scores below 580.
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