It’s Getting Harder to Qualify for a Mortgage—Here are some ideas of what you can possibly do about it.

Challenge #1: High Interest Rates Mean Higher Monthly Payments

Over the past couple of years, interest rates have risen from historic lows to levels that significantly increase the cost of borrowing. A 1% increase in your interest rate can add hundreds of dollars to your monthly mortgage payment—making it harder to qualify based on debt-to-income ratio limits.

What You Can Do:

• Improve your credit score to qualify for better rates.

• Consider a buydown strategy, where seller concessions are used to temporarily or permanently lower your rate.

• Shop lenders and work with a mortgage broker who can find competitive rates and loan products tailored to your situation.

Challenge #2: Property Taxes Can Break the Budget

In many areas, especially growing suburbs and high-demand regions, property taxes have been on the rise. These taxes are factored into your monthly payment and can easily tip you over the edge of what you can afford.

What You Can Do:

• Look for homes in counties or cities with lower tax rates—a 1.2% tax rate vs. a 2.5% rate can make a significant difference.

• File for homestead or other local exemptions after closing, which can reduce your taxable value.

• Ask your agent about recent assessments—some areas allow you to appeal excessive valuations.

Challenge #3: Homeowners Insurance Is Skyrocketing

Insurance premiums have increased sharply in many states due to rising claims, natural disasters, and inflation. That extra $150–$300 per month is often what keeps buyers from qualifying.

What You Can Do:

• Shop insurance rates early, even before going under contract, and explore bundling options.

• Ask about increasing deductibles or adjusting coverage levels to reduce the premium while staying protected.

• Avoid homes in high-risk areas, like flood zones or wildfire-prone regions, if possible.

Challenge #4: Even Zero Down Isn't Free

Zero down payment options like USDA and VA loans help reduce the upfront burden, and down payment assistance (DPA) programs can also help—but remember: you’re still financing a large amount of money. On a $325,000 home, even without a down payment, your monthly costs could exceed $2,400 with taxes, insurance, and mortgage insurance.

What You Can Do:

• Avoid maxing out your budget. Just because you qualify for a $325,000 home doesn’t mean it’s the right financial move.

• Use seller concessions strategically to cover closing costs and reduce your rate.

• Strengthen compensating factors—like job stability, savings, or low debt levels—to improve your mortgage application.

The Bottom Line

Yes, it’s harder to qualify for a mortgage today. But that doesn’t mean it’s impossible.

Preparation is key—understanding how lenders evaluate you, how much you can truly afford, and how to improve your financial picture can help you overcome the barriers. Partnering with an experienced lender and real estate agent who can guide you through available options and help you structure your offer smartly makes all the difference.

If you're thinking about buying, take a step back and build a game plan. You might not be ready this month—but with the right strategy, you could be ready a few months from now.

Ready to talk about your options? Let’s start a conversation.