Susan and I purchased our first home back in 1996. Like many newlyweds, our first home is what you might call a starter home.  It was a modest, two-story, single family home on a small piece of property at the end of a cul-de-sac.  After seven years (and three kids), we were ready to move on, and so we did.

Our second home was actually smaller than our first, but we were also living in a more expensive part of the country (Sonoma, CA).  We purchased what we thought we could afford in 2003 and felt fortunate that we were able to sell in 2006, just as the housing market was starting to slide.  In 2007, we purchased the home we are currently living in, and given the way things are going, we’ll probably be here for a while.

Owning your own home is often considered part of the American dream, but given the tight lending standards in the marketplace today, getting into a home is not as easy as it was in the past. My colleagues and I have taken a number of calls from would-be homebuyers that are trying to take advantage of lower home prices and lower interest rates but are finding it difficult to qualify for a mortgage loan.  In her article titled 6 Tips to Get Approved for a Home Mortgage Loan, Valencia Higuera outlines things you can do to improve your chances of qualifying for a mortgage loan. Here are some steps you can take to apply these tips:

Step 1) Obtain your credit score

As lending standards get tougher, now more than ever is it important to have an above average credit score.  You can obtain your credit score for free from websites like and Each site also includes tools and resources to help you improve your credit score.

Step 2) Save for upfront costs

A down payment and closing costs are just some of the expenses associated with a mortgage loan. Begin the home-buying process by saving for these and other upfront costs. See for more information.

Step 3) Lower your debt

If you have other debt, including credit card debt or car loans, this may hinder your ability to qualify for a mortgage loan. Discuss with your prospective lenders how much existing debt should be eliminated to improve your chances of qualifying for a mortgage loan.

Step 4) Reach out to lenders for pre-qualification

Each lender will have their own required minimum credit score, but you can usually qualify for a mortgage once your score exceeds 680. If you’re in the market for a new home, contact lenders in your area or work with a mortgage broker to find out what minimum criteria is needed to qualify for a mortgage loan. You may want to start with your current bank or credit union and then check out other sources like or Here is an article that talks more about finding a mortgage lender:

Step 5) Evaluate your budget

Even if you qualify for a loan, it may not be a wise decision if the monthly payments put a strain on your household budget. Review your budget to make sure you can pay for all of the costs associated with home ownership, including the mortgage payment, property taxes, homeowners insurance, and the cost of home maintenance.

It’s easy to understand why interest in purchasing a home is growing, but it’s just as easy to understand why banks may be a little shy to lend money.  Improve your chances of qualifying for a home mortgage loan by presenting yourself as a creditworthy borrower.  It may not be the last home you purchase, but it may be the last time you see home values and interest rates this low—at least for a while.