How to Improve Your Odds of Getting a Mortgage

By Sheryl Nance-Nash

More than 2.5 million people were turned down for mortgages in 2010, according to the Federal Financial Institutions Examination Council. That's about 23 percent of all those who are seeking a loan to buy a house.

Compared to just a few years ago, the number is quite low -- but it's sure not because lenders are making it easier. It's because fewer Americans feel ready to buy a home.

With statistics like those, it's clear that the housing market isn't going to lead the nation out of its economic doldrums, and the numbers are none too encouraging for anyone eyeing a real estate purchase. Whether you're a first-time homebuyer looking to capitalize on historically low interest rates, or a homeowner hoping to upgrade, figuring out how to get a smile out of a lender is task No. 1.

So what do banks want, anyway?
1. Strong credit

If you have a weak credit score, a history of late payments, or you owe a hefty chunk of change on credit cards and elsewhere, you're unlikely to get the go-ahead. You can also get harpooned if your credit profile changes in mid-process, says Keith Gumbinger, vice president of HSH.com, a provider of mortgage data. So keep things consistent while your application in under review.

Consistently making only the minimum payments on your debt suggests to lenders that you can't pay the full balance and may be under financial stress, says Dana Dratch, a regular contributor to Bankrate.com. Further, opening a raft of new credit lines in a short period of time is a tell-tell sign that your finances are shaky.

Read the full story at DailyFinance.

See also:
First-Time Homebuyer's Guide
Low Mortgages Are Great -- But Most Can't Qualify

• <p> Location: Kansas City, Kan.<br /> Price: $9,500<br /> Beds/Baths: 2/1<br /> Sq. Ft.: 966<br /> <br /> This 966-square-foot gable-roofed box offers two bedrooms and one bathroom. Also part of the deal is a &quot;very functional kitchen,&quot; according to the description. It &quot;really wouldn't take much to get this home move-in ready.&quot; View the <a href="http://realestate.aol.com/homes-for-sale-detail/315-Bellaire-Ave_Kansas-City_MO_64123_M83716-60880" target="_blank">listing -- which has 11 photos</a> -- here. &nbsp;</p>
• <p> Location: Garfield Heights, Ohio<br /> Price: $9,900<br /> Beds/Baths: 3/1<br /> Sq. Ft.: N/A<br /> <br /> You get three bedrooms, one bathroom, a covered porch -- even an attic dormer. This modest foursquare, built in 1920, is <a href="http://realestate.aol.com/homes-for-sale-detail/11815-Tonsing-Dr_Garfield-Heights_OH_44125_M43784-17021" target="_blank">more put-together than you'd think</a> for the price.</p>
• <p> Location: Birmingham, Ala.<br /> Price: $9,000<br /> Beds/Baths: 2/1<br /> Sq. Ft.: N/A<br /> <br /> Two bedrooms, one bathroom and a patch of lawn in Birmingham, Ala., for $9,000. For more photos and details, see the <a href="http://realestate.aol.com/homes-for-sale-detail/8532-Division-Ave_Birmingham_AL_35206_M83863-61057" target="_blank">listing</a>.&nbsp;</p>
• <p> Location: South Bend, Ind.&nbsp;<br /> Price: $10,000<br /> Beds/Baths: 3/2<br /> Sq. Ft.: 2,000<br /> <br /> The facade -- which includes a covered brick porch -- is presentable and the space, at 2,000 square feet, is generous. So how the heck does this home in South Bend, Ind., cost only 10 large? Well, the interior could use some work, as the <a href="http://realestate.aol.com/homes-for-sale-detail/1135-Portage-Ave_South-Bend_IN_46616_M42060-12206" target="_blank">listing photos</a> show. But the other specs on this house still make it quite a deal.&nbsp;</p>
• <p> Location: Cincinnati, Ohio<br /> Price: $9,000<br /> Beds/Baths: 3/2<br /> Sq. Ft.: 1,689<br /> <br /> Cincinnati is another city that ranks high on the sub-$10,000 inventory list. This <a href="http://realestate.aol.com/homes-for-sale-detail/6306-Savannah-Ave_Cincinnati_OH_45224_M39211-08758?ex=OH530648773" target="_blank">modest midcentury dwelling</a> clocks in at 1,689 square feet, with three bedrooms and two baths.&nbsp;</p>
• <p> Location: Birmingham, Ala. &nbsp;<br /> Price: $8,500<br /> Beds/Baths: 3/1<br /> Sq Ft: N/A<br /> <br /> This foreclosed three-bedroom in Birmingham is going for $8,500. The interior <a href="http://realestate.aol.com/homes-for-sale-detail/7511-2nd-Ave-N_Birmingham_AL_35206_M87349-46682" target="_blank">looks surprisingly clean and well-finished</a>.&nbsp;</p>
• <p> Location: Montgomery, Ala.&nbsp;<br /> Price: $9,900<br /> Beds/Baths: 3/1<br /> Sq. Ft.: 1,301<br /> <br /> Pay only $9,900 and you get three bedrooms, one bathroom and 1,301 total square feet for this puppy. Behind its light-blue exterior <a href="http://realestate.aol.com/homes-for-sale-detail/2026-Rigby-St_Montgomery_AL_36110_M79197-74306?ex=AL536909627" target="_blank">things are perfectly passable</a>.&nbsp;</p>
• <p> Location: Boise, Idaho<br /> Price: $7,500<br /> Beds/Baths: 2/2<br /> Sq. Ft.: 915<br /> <br /> Another foreclosure, this condo asks only $7,500 but gives you two bedrooms, two bathrooms and your very own carport. We're <a href="http://realestate.aol.com/homes-for-sale-detail/6529-W-Douglas-St_Boise_ID_83704_M21809-51824" target="_blank">looking at a measly $8 per square foot</a>!</p>
• <p> Location: Detroit, Mich.<br /> Price: $9,900<br /> Beds/Baths: 4/2<br /> Sq Ft: 1,036</p> <p> Built in 1935, this home is running for a price that belongs in the era of its style's heyday.&nbsp;<br /> <br /> See the <a href="http://realestate.aol.com/homes-for-sale-detail/14389-Montrose-St_Detroit_MI_48227_M39015-56977?ex=MI531417841" target="_blank">listing</a>.&nbsp;</p>

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