Home prices in the US are at an all-time high, with the median prices touching $395000. Well, that’s a tremendous, huge amount. If you set out to purchase a property in the US at this time, you’ll most likely need a mortgage loan ranging from $200,000 to $350000 (after considering the minimum down payments). But did you ever wonder what would qualify you for a $200,000 mortgage loan?
Read along to find out!
The major factor is your disposable income – the leftover amount you can use to pay your mortgage. If you fail to demonstrate your ability to clear monthly dues, you might have difficulty qualifying for a mortgage.
Your monthly mortgage payments cannot exceed 28% of your monthly income according to mortgage rules. Suppose you’re looking for a $200,000 mortgage loan; you’ll need a minimum of $6000 monthly income to qualify for it… too, if you’re able to get it at an interest rate of 4.8%.
Qualifying for a mortgage can be difficult if you have other debts, such as a car loan. The lender might see you as a risky borrower because you already have other payments to deal with. Your debts cannot exceed 43% of your total income as a basic rule.
Most lenders require income proof to ensure you can make timely payments. And that’s only assessed through your job stability. You should have a permanent contract and six months of seniority if you’re an employee.
On the other hand, if you’re self-employed, you should prove that you have been able to earn profits for the last two years.
If you’re about to sign-up for a $200,000 mortgage, the lender will probably run a hard check on your credit profile. But why? Simply, to assess your creditworthiness. If you have a clean record of making timely payments and a score greater than 680, you stand a good chance of getting a mortgage.
If you seek a $200,000 loan to buy a second home, the lender will run more sophisticated credit checks. The mortgage interest rate is usually higher for second homes, and you’ll need a large down payment before getting your loan approved.
Hence, if you’re seeking to purchase property other than a primary residence, don’t be surprised to get a high interest-rate offer.
Second Homes vs. Investment properties
While the terms second homes vs investment properties are used interchangeably, there are some notable differences between the two. For a general clarification, investment properties usually generate rental income, while second homes are properties where you live for some part of the year.
Tips to secure a $200,000 Mortgage Loan
With the notable advantages of mortgage and loan; Here are some mortgage tips to help you ease the process of securing a $200,000 mortgage loan:
- Improve credit scores
- Save for a bigger down payment
- Shop around and get multiple quotes to find the best deal
- Try to lower your DTI before getting a mortgage
Get Your $200,000 Mortgage Loan Today!
If you have a decent income, stellar credit history, and stable employment, you’re all set to secure a $200,000 mortgage to buy your dream house.
So, what are you waiting for?
Head out to Rate Checker, calculate mortgage loan amount, and get free quotes right away!