It can be difficult to know whether or not you qualify for a mortgage based on your income. Keep reading to find out if you qualify.
What Is a Qualifying Income?
You will need to find out your gross income before qualifying. This includes cash in hand, side income, and self-employment income. If your income is over $31,000 per year, you may be required to pay more for a home loan. However, you do not have to report this income unless you work a full-time job. If your income is over $31,000 per year, you can’t have a loan that has a monthly payment that is higher than your income.
How to Qualify for a Mortgage
The home loan industry is a tricky place to be a first-time homebuyer. Here are the basics to be aware of if you’re trying to qualify for a loan in Colorado. Your net worth is the total of all the assets you own. When you receive a home loan, you have to prove that your assets aren’t more than the loan amount. This includes your equity in your home. You’ll also need your equity in your property, plus your savings and your retirement accounts. You don’t have to have a substantial amount of equity in your home, but it’s good to have in case of a natural disaster or another unexpected emergency.
What Are the Requirements?
You must have earned over 120 percent of the area median income in Colorado to qualify for a conventional home loan. The area median income varies depending on where you live in the state, so there are a number of calculators you can use to figure out what that means for your specific location. Do you need credit? Of course, a large part of the decision comes down to your credit. You must have good credit if you want a conventional loan. No bankruptcy on your credit history, good debt-to-income ratios, and a minimum credit score of 640 for prime loans are the basic qualifications.
What Is the Process?
Just because you are a homeowner, that does not mean you automatically qualify for a loan. There are several factors that can impact whether or not you can secure a loan. The larger the loan amount, the lower the borrower’s income will be. Thus, a homebuyer will need a larger down payment in order to meet a certain minimum purchase price requirement. Lenders in Colorado set their own loan requirements and charge a higher interest rate based on those requirements.
Contact Zech Buys Houses
Rather than go through the hassle of taking out a mortgage on your property, why not just sell it instead? Make things simple and contact Zech Buys Houses today to see what we can do for you. We buy houses in Colorado Springs, Colorado, in all shapes, sizes, and conditions fast and in cash so you don’t have to go through the struggle of trying to sell an unwanted property in an unforgiving housing market. Call us today to receive your fair, written, no-obligation offer, and you could have money in hand for your rental property in as little as seven days.