In light of recent econmic conditions and the unstable financial markets, banks and mortgage lenders have tightened their qualifications for lending money for mortgage loans. Within the last 12 months, the federal government has mandated sweeping changes in the way borrowers can qualify for residential home loans.

What is Your Home WorthOne of the most striking changes is in the relationship between lenders and appraisers. Long gone are the days when you could pick up the phone and call the appraiser down the street to perform an appraisal to develop a value on a piece of property. The "Home Valuation Code" now forbids the lender to have any contact with the appraiser. The appraisal is ordered randomly through a national company that deals exclusively in assigning appraisers to jobs. This has presented quite a problem in the lending industry as appraisals have been assigned to appraisers outside their normal lending area. An appraiser unfamiliar with the area works at a disadvantage with respect to values, amenities, school districts and recreational areas. This may cause a value to be disporportionately high or low.

Know Your Credit ScoreThe single most important factor in being approved for a mortgage is your credit score. Borrower's qualify for the best rate with a credit score of 740 or higher. If your score is under 640, you will have a hard time trying to find a lender that will grant you credit.