Roadblocks on the way to owning a home

Generally, it's more difficult to qualify for a loan now than it was a year ago. Why?

4Conventional loans may require a 20 percent or larger down payment to avoid private mortgage insurance.

4To get the lowest interest rates, your credit scores need to be in the 700 range.

4You need to have verifiable income

4You need to have cash reserves

4 You need to have your down payment and closing costs.

You could run into underwriting problems if –

4 You're self-employed (W-2 income is easier to verify)

4 Lapses in employment

4 Owning a lot of property (Some lenders won't lend to if you have more than three or four residential properties)

4 Buying a new home before selling your current home, you'll need to have 30 percent equity in your current home. (To be verified by the lender's appraiser)

4 If you need rental income to help you qualify, you will want to have a copy of the cashed check from the tenant.

Be candid with your loan professional about anything in your financial picture that might impact 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.

Sue Lawrence and Ken McCormick can be reached at 806-355-9601. Prudential, Ada Realtors is an independently owned and operated member of Prudential Real Estate Affiliates, Inc., a Prudential company. Equal Housing Opportunity.