Good luck for this mortgage now! (The Motley Fool)

With the low mortgage rates and unfortunately overabundant houses, now seems like the perfect time to buy a House. Unfortunately, many buyers potential is now that they cannot obtain a mortgage in the first place - and their chances of success could soon grow even longer.

Oh, now you get rigorous!
According to the Federal Reserve, about a quarter of all loan applicants are now rejected. For the National Association of Realtors chief economist Lawrence Yun warns, "good borrowers with one or two defects on their credit are denied credit."

Recent and painful reforms losses were once lenient lenders immensely pickier words of which they lend to. The average credit for these loans FHA attachment score rose from 660 to 700 for a few years. While the lenders used to find a way to lend to those with scores below 620, most of these people now get refoulée.

Remember, only a few years ago when you could borrow almost the total value of your new home, and when you did not sometimes even to provide documentation of your income? CNNMoney.com article notes median down payment for a House now approaches 15%, up from close to zero.

Bad loans shrank
Banks, which often now require 20% down, are working to obtain their previous bad loans off the coast of their books. E * TRADE Financial (Nasdaq: ETFC - News), which offers banking and brokerage services, prides itself in a recent report that it lowered its crimes by 26% last year and 52% from its 2007 peak. SunTrust (NYSE: STI - News), in its 2010 report, notes an improvement in its credit quality while reducing its provision for credit losses of 47% over the past year. At the end of 2010, US bancorp (NYSE: USB - News) observed its quarter fifth consecutive decrease of provisions for credit losses. Wells Fargo (NYSE: WFC - News) even out payments to 30%!

Stronger banks may be good news for shareholders, but they set up roadblocks to potential buyers. Unfortunately, if they lead the market buyers, any further slowdown in housing purchases could also sand the economy.

In addition, the Dodd-Frank reforms now require banks to have some "skin in the game," keeping the 5% of many mortgages, such as those who have less than 20%, on their own books. (Previously, banks would often "securitize" mortgages, packaging and selling entirely to foreign investors.) Now, if the loans, they do go wrong, banks will feel more pain, still motivates to seek high-quality borrowers.

All is not lost
To the Earth a mortgage now, be strategic. Start to build your credit score. Accumulate more money for a down payment and keep in more safe short term investments such as CDs, instead of the more volatile stock market. You may have to delay your purchase of ILO, but if you rent for a period of time, look on the bright side - you'll save on property taxes, insurance and other expenses related to the home.

The research of powerful investment? These banks may be tomorrow kings in dividends.

Contributor of long Fool date Selena Maranjian is not the owner of the shares of all companies mentioned in this article. The fool is the owner of the shares of Wells Fargo. Try our services Foolish newsletter free of charge for 30 days. Us Fools can not all hold the same views, but we believe that treat a wide range of ideas makes us better investors. The Motley Fool has a disclosure policy.

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