7 Tips to Help Get Your Mortgage Application Approved

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

In the market for a mortgage? Here are seven simple actions you can take to tip the application process in your favor.

You’ve found your dream home, but are having difficulty getting a mortgage. What’s an applicant to do?

Loan offers are all over the place, but don’t be fooled into thinking that everyone is automatically approved. Lenders are no longer willing to lend large sums to eager borrowers who may not be able to hold up their end of the promise. New federal rules that took effect in January are intended to prohibit risky loans.

Fortunately, there are actions you can take to increase your chances of getting a mortgage.

1. Do your homework

Contact multiple lenders to get an idea of the standards you need to meet to qualify for a loan. They may tell you that it varies by applicant, but most have a general set of criteria in place. (Ideally, this step should be taken before you begin looking for a house.)

Because of the new rules, “mortgage lenders are asked to comply with two new requirements: the Ability to Repay rule and Qualified Mortgages,” reports CNN Money. Here is a brief overview of what the two rules entail:

  • Your debt-to-income ratio will be analyzed to confirm that you are indeed able to make timely payments over the duration of the loan. Your debt should be less than 43 percent, although exceptions can be made.
  • Lenders must verify the assets, liabilities and income of the loan applicant.
  • The loan repayment period should not exceed 30 years.

Although your lender may have additional criteria, keep this short list in mind. Also ask potential lenders what credit score you’ll need to qualify.

2. Shop around

Traditional banks are often a bit more stringent than credit unions. The New York Times says that “because credit unions typically keep a hefty portion of their loans in portfolio (rather than sell them on the secondary market), they have flexibility in tailoring mortgages to better meet consumer needs instead of the expectations of investors.”

So if you know that you may have a difficult time qualifying, credit unions may be the better option.

3. Be cooperative

Provide all of the requested information in a timely manner when you attempt to pre-qualify for the loan or obtain preapproval, which banks are more reluctant to grant these days. After that, comply with all requests for paperwork. There’s nothing worse than being denied because you failed to follow instructions or paperwork deadlines lapsed. Says Credit.com:

When your application is approved it’s important to check the underwriter’s checklist of borrower conditions. This list will specify everything that you need to do in order to ensure that their loan will be approved for closing. The conditions often include requests for alternative and supplementary documentation, explanation and correction of anomalies, and verifications and attestations.

Lenders don’t have time on their hands to chase down applicants for paperwork and explanations for vague responses.

4. Plead your case

Failing to meet the lender’s criteria doesn’t automatically disqualify you for a mortgage. You may simply have to ask the lender to take a second look or make an exception to the rules, if possible. It may also be necessary to provide additional documentation to strengthen your case.

5. Get a co-signer

Do you know someone with stellar credit and verifiable income who is willing to co-sign a loan for you without actually residing on the property?

But proceed very cautiously and make sure your potential co-signer understands the risks. If you don’t pay, your co-signer is responsible for the entire loan. For that reason, our general advice is that people should not agree to co-sign a loan for anyone, even a  family member or close friend.

However, the co-signer may be confident in your ability to pay because of your complex situation, such as self-employment or a substantial amount of expected income that the lender may not be unaware of.

6. Be patient

Maybe the time isn’t right for you to purchase a home. Put it off for a year.

Identify the problem areas that kept you from obtaining a mortgage and make improvements. Reduce outstanding debt balances, boost your income and build a cushion. Save for a larger down payment.

And take the necessary steps to improve your credit score. A higher score could secure you a loan at a rate that will save you significant money.

7. Lower your expectations

Look at properties that are more comfortable financially. Perhaps a condominium would be suitable, or a less affluent neighborhood than the one you’ve been eyeing.

Still no luck? It may be time to revisit the drawing board to determine if you really should be in the market to buy a home.

Do you have any additional tips? Let us know in the comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: Considering a Fixer-Upper? 15 Ways to Avoid a Money Pit

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,083 more deals!