[USA] Do You Qualify for a Home Mortgage Loan? Find Out.

Here is a home mortgage loan qualification calculator. If you input data like mortgage amount, loan term, annual interest rates, other (current) debt info, etc., it will give you the required minimum annual salary to qualify for the loan amount you specified.

But earning the minimum required annual salary alone may not be sufficient to get the mortgage. Understanding the U.S. Home Mortgage Loan Qualification process in depth is critical.

10 Ways to Better Your Chances to Qualify for a Home Mortgage Loan:

1. Getting a Mortgage Pre-Approval, which includes thorough credit assessment and verification, is more important (and more cumbersome) than Pre-Qualification. The latter just gives you an idea, but with pre-approval, your chance of getting the loan is high.
2. Since the Pre-Approval will be valid only for 60-90 days, it’s important to identify the house you want to buy before applying for it.
3. If you have any secondary sources of income, you could declare them and your chances of getting the mortgage will be better. You may even qualify for a lower rate of interest.
4. If you have a good FICO credit rating (usually more than 600) your chance of getting the loan is higher. Also, the higher the score, the lower the interest rates.
5. If you have a low credit score, take some time to improve it as much as possible before applying for the mortgage.
6. A low Debt-to-Income (DTI) Ratio is important to qualify for a mortgage. So try to pay off other debts as much as possible before applying.
7. If you pay less than 20% as downpayment, expect to pay 0.5 to 1% of the loan amount as PMI – Private Mortgage Insurance, annually.
8. Generally, Back End DTI (Debt to Income ratio) is more important than Front End DTI. So keep your credit card loans, car loans, personal loans, etc. as minimum as possible to qualify for a mortgage.
9. To improve the Back End DTI, try to consolidate your high-interest loan payments into one monthly lower interest payment.
10. You could reduce the loan amount, or opt for an adjustable-rate mortgage if you have difficulty qualifying for the loan.

According to these stats, the 30-year Fixed Interest Home Mortgage Rate has decreased from 3.64% to 2.67% from Jan. 1 2020 to Dec. 1 2020 – the lowest rates for a long long time. Due to this the demand to buy new homes has surged, and you can expect this trend to continue in 2021.

So now maybe the best time to buy that new home you’ve always dreamed of owning. Be sure to click on the home mortgage loan qualification calculator and check if you qualify for a home loan.