Mortgage rates on conforming loans up to loan amounts of $417,000, and $729,750 in high-cost housing markets like San Francisco and New York City, are attractively low -- hovering close to 5 percent. That's the good news. The challenge is getting through the approval process. Several years ago, one couple bought a home in Hercules, a suburb in the San Francisco Bay Area, for $650,000, with no cash down payment and no documentation of their income, employment or assets. They would not have qualified using conventional financing with full documentation. Their income didn't support a $650,000 mortgage. Today, a buyer is having difficulty getting approved for a conforming $417,000 mortgage even though his credit score is high, his debt-to-income ratio is low and he is putting 30 percent cash down. His file, which is now a couple of inches thick, is caught in the quagmire of underwriting. The problem from the underwriter's standpoint is that the borrower has income from several...
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