Some people have a tendency to really overlook the whole mortgage process, especially coming off of the ease of getting one during the real estate boom. Mortgage lenders are still eager to give you what you need, but it'll take concrete proof now that you can actually afford what you're looking to buy before they relinquish the funds needed for it. That's why it's important to take a look at your own financial situation, through your personal credit report and monthly expenditures, before someone else does and makes a judgment based on that.
It's working out nowadays that the people that are still benefiting from the housing market are the people with good credit scores and money to put down on the house. It pays off that before you think about buying a house and obtaining a mortgage, that you check your credit report for inaccuracies and cure them before anyone else sees them. The difference between a lending rate when your score is in the 600's and when your score is in the 700's is one drastic difference, and can save you thousands of dollars over the life of your mortgage.
You should also plan ahead and make sure that you have a substantial down payment to fork over. You used to be able to get a house with little or no down payment, but it's just not the case anymore. If you come up with 10 percent of the purchase price, expect to pay mortgage insurance until the total amount of payments on your mortgage combined with that down payment add up to 20 percent. Any down payment over 20 percent is ideal.
Proving your income is proving to be tougher as well. Lenders are holding more to the adage that a mortgage payment shouldn't be greater than 28 percent of the buyer's gross income. And proving that income and your total expenditures is a mess on its own. Be sure to have everything laid out for the lender so they don't have to take all the time to find the reasons to deny you themselves. If you're self-employed, be prepared to have year's worth of income records to prove a steady income flow. People are starting to find out that there is no longer such a thing as stated income.
The bottom line is, be sure to shore up your credit and your financial status in order to become less probable to be rejected. Lenders want to lend, but now more than ever, they need to know that who they're lending to is secure. It's your responsibility to prove it to them.