How to Make Sure You Get Mortgage Approval

"Generally, it's more difficult to qualify for a loan now than it was a year ago," writes Dian Hymer for Inman News.

Banks have stricter guidelines and some qualified buyers can be turned down for seemingly illogical reasons. A frank conversation with your lender can help you figure out where you stand in the loan approval process.

The bottom line is that "most conventional lenders require a 20-25 percent down payment, your credit score needs to be in the 700 range and you need to have verifiable income and cash reserves, in addition to down payment and closing costs." writes Hymer.

What to Do Before Negotiating on a Contract to Buy a Home:

Plan ahead: Find a reputable lender, ahead of time, to assist you. "Closing the deal should be your primary goal," writes Hymer, "don't make your decision based on interest rates alone, a good track record counts for a lot."

Be Honest: Make sure you disclose anything in your finances that might impact your loan qualification. "A good loan agent or broker will be able to assess your financial situation and anticipate what you'll need to do to satisfy the underwriter." says Hymer.

The Appraisal is Key: Hire an appraiser that is familiar with the area. It needs to come in at or above the purchase price.

Jumbo Loans: The conforming jumbo mortgage limit has dropped in most expensive housing markets but there are more options available now. Hymer says you can expect to pay 25 percent more for a 30-year fixed jumbo loan.

Cash Reserves: Banks will look at your available cash reserves; your retirement account counts towards this.

A little advanced planning will help the mortgage approval go faster.

Read the full story at Inman News.

photo credit: UGA College of Ag