What happens when you’re finally ready to buy back your home? There are a few key steps to keep in mind as you plan! Of course, our team will be there to support you every step of the way.
How do I know when I’m ready to buy back my home?
The Divvy program is designed to get you ready for homeownership in 3 years, but you can buy your home back from us whenever you’re ready. Knowing if you’re ready to buy back will depend on your financial situation and the type of mortgage you’re hoping to secure, as they have different credit and down payment requirements. A good place to start is to understand the types of commonly-available mortgages and which might work best for you:
- Conventional: A home loan that isn’t backed by a government agency. It usually requires a higher down payment of 20%.
- Federal Housing Administration (FHA): A government-insured home loan from the FHA. Down payments can be as low as 3.5% with a minimum credit score of 580.
- Department of Veterans Affairs (VA): Backed by the VA for eligible veterans, current service members, and surviving spouses with typically no down payment
- US Department of Agriculture (USDA): A loan insured by the USDA for low-to-moderate-income home buyers purchasing homes in rural areas. These usually require no down payment and flexible credit score.
Once you have a mortgage type in mind, you should be able to answer the following questions:
- Do I have enough in home savings to cover the mortgage down payment and closing costs?
- Is my credit score in a place that would qualify me for a mortgage?
If you answer “yes” to both of these questions, you could be ready to buy back your home! You can track your home savings and FICO via your Divvy portal, so you always know how much you have saved up and have an understanding of your credit health. It’s also good to remember that you’ll be given two buyback prices when you join the Divvy program—if you’re able to buy back within the first 18 months, you’ll get a discount!
How do I qualify for a mortgage?
Once you’re ready to buy back, you’ll need to find a mortgage lender. There are plenty of online guides for you to search through to find a lender that’ll work best for you, or you can reach out to your Divvy team to get some suggestions! We recommend all our customers speak to a free Mortgage Readiness Counselor (provided by Divvy) to learn more about their options.
To qualify for a mortgage, you’ll need to share your financial history from the last few years, as well as the total amount of your savings. You’ll also need to meet the specific lenders’ requirements—they’ll typically ask to see:
- Recent pay stubs
- W2 forms from all jobs you held in the past two years
- Personal federal tax returns for the past two years
- The most recent 2 months of statements for all checking, savings, investment, and retirement accounts
- A Social Security award letter or current statement, if applicable
- 1099 for all retirement income and current statement, if applicable
- Letters explaining all credit inquiries, past addresses, and derogatory information on your credit report
- Note that special circumstances, like self-employment, divorce, or a previous bankruptcy can affect these requirements. You can find additional details on what to expect in our Buyback Guide.
How does the buyback process work?
Once you’re pre-approved for a mortgage, you’ll reach out to our team to let us know you’re ready to buy back. With lenders suffering delays in the current environment, we recommend starting that process 60-90 days before your desired close date to be safe. At a minimum, we need 30 days notice to complete the process.
Since you already have a relationship with Divvy and are buying the home from us, we can keep the process pretty simple! You won’t need a real estate agent to complete the buy back process, which means lower costs, but you’re more than welcome to work with one. Just keep in mind you’ll be responsible for covering their fees and commissions.
We ask that you put us in direct contact with your lender to make the process as smooth as possible. We’ll share all the relevant documentation with you and your mortgage broker. Most mortgage lenders will require an appraisal and inspection of the home before we’re able to close, so make sure things are in tip-top shape! Once the inspection is complete, we’ll work with your lender to close on the home. Divvy covers most of the closing costs, but there are a few that are your responsibility:
- Additional title costs
- Mortgage closing costs
- Agent commissions—this only applies if you choose to use an agent
Once the sale is complete, you’ll officially be a homeowner! Remember that once you’re the owner you’ll need to take on costs like insurance, property taxes, maintenance, and repairs, and put all bills in your name.
If you have questions about buying back your home, don’t hesitate to reach out to your Divvy team. We’d be more than happy to help guide you through the process.
Still getting set up on your journey to homeownership? Get started with Divvy now!