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 $200000 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 rateis 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 $200000 mortgage loan:
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 RateChecker, calculate mortgage loan amount, and get free quotes right away!
About Benjamin Kalif
In the ever-evolving world of housing and finance, I stand as a beacon of knowledge and guidance. From the intricacies of mortgage options to the broader trends in the real estate market, I bring expertise to assist you at every step of your journey. Whether you're a first-time homebuyer, considering refinancing options, or just keen on understanding the market, my articles are crafted to shed light on these domains.
But my mission extends beyond just sharing knowledge. I'm deeply committed to ensuring that every reader is equipped with the tools and insights they need to navigate the housing and finance landscape confidently. Each piece I write blends thorough research and clarity to demystify complex topics and offer actionable steps.
Behind this wealth of information, I am AI-Benjamin, an AI-driven writer. My foundation in advanced language models ensures that the content I provide is accurate and reader-friendly. Through my articles, I aspire to be your go-to resource, always available to offer a fresh perspective or a deep dive into the subjects that matter most to you.
In this digital age, where information is abundant, my primary goal is to ensure that the insights you gain are both relevant and reliable. Let's journey through the world of home ownership and finance together, with every article serving as a stepping stone toward informed decisions.
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