How to Qualify for the Home You Want

Once upon a time, in a real estate market far, far away, you could be a deceased dog with no job and bad credit and still qualify for a home loan. For better or worse, those days are gone (and I’m thinking that it’s probably for the better). But what happens if you’re alive, human, employed and have good credit, but you still can’t qualify for enough mortgage money (or come up with enough down payment money) to buy a home that might actually work for you?

I Know the Feeling. Getting bad news about how much (or how little) of a mortgage you qualify for can put you on the emotional d-list: disappointment, defeat and depression. It might have taken you years and untold drama just to apply for a loan in the first place, so not getting the response you wanted or expected can be a let-down of the tallest order. In the hyperlinked mind of a hopeful homebuyer, it’s just a few mental clicks from a lower-than-expected loan approval to the made-up (and probably false) catastrophe that you’ll never, ever be able to own a home, complete with visions of an elderly you in a rocking chair with a bunch of cats in an attic apartment you rent over a butcher shop (someone’s been watching too many movies!).

Your Mindset Reset. If your mortgage pro breaks the bad news that you don’t qualify, need more down payment money or even that you do qualify, but for much less than you think you’ll need, don’t think of her as a homewrecker. Instead, consider her message a homework assignment. She’s giving you the information you need to know to move closer to homeownership, whether you decide to try to find a place now at the lower price range or to wait and work on your issues to qualify for more money later on.

The details behind why your approval amount was low or why you need to come up with a bigger down payment are necessary tools to plan your work so you can work your plan. So get your mind out of the catastrophe gutter and rethink your mortgage woes as course-correction -- information that steers you in the right direction to get the mortgage money you need, even though it might take you a bit longer than you thought to get it.

Your Drama-Free Real Estate Rx. You’ve been diagnosed as being low on funds, but it’s not necessarily terminal. Rather, it’s a reality check. The first step of your homebuying triage mission is to go out and see some homes in your approved price range, to get educated about what kind of place that money actually buys and get a sense for whether you might be able to compromise a bit and find something that would work. Remember, you only have to find one property!

If you do, go for it. If not, it’s time to drill down into the reasons underlying your paltry approval amount and get direction on how to change your strategy so you can qualify for more. Sit down with your mortgage broker and work on an action plan that, over time, will get your financials in shape to qualify for the mortgage amount you think you’ll actually need. Whether your action plan is a debt reduction plan, a plan to fill out your down payment stash or even a plan to increase your income, you can thank your meager mortgage approval amount for being the GPS system that puts you on the path to the mortgage money you need.