In September interest rates fell to new lows. Low interest rates increase affordability. This should make it easier for buyers to qualify. However, stories of buyers waiting months to gain loan approval as well as home purchase transactions not closing on time due to lender’s strict underwriting are all too common.

Sometimes buyers are turned down for illogical reasons. For instance, if you have investments an underwriter might deny the mortgage because your portfolio doesn’t fall into the underwriter’s risk assessment model – even if your investments are performing well.

One couple was turned down, even though they were well qualified. The husband was making more money at his new job, however he had worked at his current job for less than a year.

The wife had worked several years for one employer and was able to qualify for the loan on her own. So, the transaction closed, although two months late.

It is generally more difficult to qualify now than it was a year ago. Most conventional lenders require a 20-25 percent down payment. Your credit scores need to be in the 700 range in order to qualify for the lowest interest rates. Your income needs to be verifiable and you need cash reserves in addition to your down payment and closing costs.

If you are self employed you will most likely run into underwriting problems. W-2 income is much easier to verify. Lapses in employment and owning a lot of property can create other hurdles. Some lenders won’t lend to buyers who have more than three or four residential properties.

You will most likely need to have 30 percent equity in your current home if you’re buying a new home before selling your current home. This will need to be verified by the lender’s appraiser. The lender will also want to see a copy of the cashed check from the tenant for the first month’s rent to verify rental income if needed to qualify.

HOUSE HUNTING TIP: Find the best mortgage broker or loan agent you can to assist you as soon as you’re serious about buying a home. A good track record counts for a lot, so don’t make your selection based on interest rates alone.

Closing the deal should be your primary goal. If you have to pay 0.25 percent more to assure your transaction closes on time, and that you’re not turned down at the last minute, it’s worth it.

Be honest with your loan professional about anything in your financial picture that might create problems for a loan qualification. A good loan agent or broker will be able to assess your financial situation and anticipate what you’ll need to do to satisfy the underwriter.

Appraisal issues can impact your loan approval. For instance, if a previous owner added square footage without a building permit, the additional square footage probably won’t be included as livable square feet.

the lender might not lend you enough to close the deal if the appraisal comes in for less than the purchase price. Include an appraisal contingency in your contract.

As of Oct. 1, the conforming jumbo mortgage limit for expensive housing markets like New York City and San Francisco dropped from $729,750 to $625,500. Conforming jumbo lenders have moved into the market to pick up some slack in some cases.

There are more jumbo financing options available now. Adjustable-rate mortgages that are fixed for 10 years and then revert to an adjustable have a starting rate about 0.25 percent less than a 30-year fixed jumbo. A five-year fixed starts about 0.5 percent to 0.75 percent lower, but is riskier.

THE CLOSING: Because of the risk factor, the lender may want you to have a large cash reserve. Your retirement account counts toward this.