Lenders’ underwriters are scrutinizing all aspects of the mortgage process, not just the borrower’s creditworthiness. Even a borrower with a high credit score, a cash down payment and verifiable income can run into snags in the mortgage approval process today if the lender’s underwriters are concerned about the value of the property.

Here are some of the recent changes in the appraisal process that could affect you. Up until recently, underwriters usually rubber-stamped an appraisal report if it included information about three comparable properties that sold in the area within the previous six months that supported the purchase price of the property being appraised.

Due to the fact that property values are under pressure in some areas, lenders may ask to see information about comparable listings that sold within the last three months. The more recent the comparable, the more indicative it is of current market value, particularly in a changing market.

For some lenders, information about comparable properties that recently sold in the immediate area is not enough. They want information about comparable properties that are currently being offered for sale. Current list prices that are lower than recent sale prices could be a red flag that prices are softening. Lenders want to make sure that they don’t approve a loan amount that is too high relative to the value of the property.

In areas where it is evident that property values have declined, borrowers may be required to increase their cash down payment by 5 percent. The lender will still make the loan, just not for as much as the borrower requested. This can pose a problem for borrowers who are cash-strapped.

For example, suppose a buyer is in contract to buy a home for $500,000 with a cash down payment of $100,000 and a $400,000 mortgage. The property is located in an area where prices have declined. So, the mortgage is approved for $380,000, or 5 percent less than the $400,000 the buyer requested.

For the deal to go forward, the buyer needs to come up with an additional $20,000. If the buyer can’t or won’t increase the down payment and the purchase contract includes financing and appraisal contingencies, the buyer may be able to back out of the contract without penalty, depending on how the contract was written.

HOUSE HUNTING TIP: Alternatively, if both buyer and seller want to work out a compromise, there are several options. The seller might agree to reduce the sale price enough to make the numbers work, particularly if the buyer can increase the down payment somewhat.

Or, the seller might be able to carry a second mortgage for the buyer to make up the difference, if the lender will agree to this. In today’s mortgage environment, some lenders aren’t keen on seller financing. This could change over time as the credit crunch eases.

Except for loan amounts of $1 million or more, lenders in the past have required only one appraisal for a property. It has become more common recently for appraisers to require two appraisals. This can mean an additional fee, and it certainly adds time to the appraisal process.

Before the recent credit crunch, lenders were able to fully process a mortgage in 14 to 21 days if the borrower was preapproved. Many lenders have recently cut staff due to the decrease in mortgage originations. Before you make an offer, check with your loan agent to find out how long it will take to process and fund your mortgage.

THE CLOSING: The home mortgage business is likely to be in flux for some time. This doesn’t mean that there won’t be opportunities worth pursuing. But, it is a time to have realistic expectations about what the process entails.

Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.

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