The party is over. If you want a mortgage you’re going to have to be able to afford it. Oh no! Now what are you going to do? Kiplinger’s has an article that explains how mortgage lending works when there are “standards” involved. How quickly we all forget…

To get a mortgage now, “you’d better walk on water,” says San Diego mortgage broker Victoria Johnson. And she’s only half kidding. Lenders acknowledge that their credit tightening is really a return to normal lending standards, last seen in about 2000.

Patricia McClung, of Freddie Mac, says that getting back to basics means a renewed emphasis on the “three C’s of credit”: credit history, capacity (the depth and continuity of your resources) and collateral (the value of your property and your down payment or equity). “If you’re down on one of those, you don’t want to be down on the other two,” says McClung.

Basically, what you need in order to get the best deal is: a high credit score, a down payment or equity, documentation, and financial reserves, says Kiplinger’s. You can still get a mortgage without all of those things, but it will be more difficult and you’ll pay more in interest. The article answers several questions you might be having, such as: “How big should my down payment be?”, “Can I still get nontraditional financing?”, and “Is this a good time to refinance?”

What It Takes to Get a Mortgage Now [Kiplinger]
(Photo: qshio )

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.