Mortgage Tips for a Tight Lending Market

Even home buyers with good credit may have trouble getting a mortgage these days.

Here are three tips for home buyers in search of the best deal.

Conforming loans win. Keeping the loan below $417,000, the most that Freddie Mac and Fannie May will buy, saves big money since the rate on nonconforming loans is now a full point higher than for lesser loans. If getting the cash together is a challenge, Greg McBride, senior financial analyst with, suggests taking out a small second mortgage or tapping an existing line of credit.

Don’t rock the boat. "Anything that might disrupt your credit history will be seen with a more jaundiced eye," says Keith Gumbinger, a vice president with mortgage research firm HSH Associates. He says avoid big credit card purchases or, if possible, major life changes.

Get multiple approvals. McBride urges borrowers to get advance approval from more than one lender, just in case the lender – not the borrower – goes under.

Source: Smart Money, Brad Reagan (11/1/07)