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Mortgage Basics
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Special loan situations

Some homebuyers fall into a gray area that will cause a lender to reject the loan, require additional information to approve it or modify the terms. Many special circumstances are indeed circumstantial; perhaps you have been at your current job for less than a year, show a few late payments on your credit report or are self-employed.

Problem appraisal 
Sometimes the property is appraised for less than you have agreed to pay for it. This can create problems, especially if your down payment is small and the appraised value falls below the amount you want to borrow.

If the appraisal falls short of the loan amount, you might have to come up with a larger down payment or renegotiate the sale price before the lender will lend you the money at all. Say you intend to borrow $97,000 to buy a $100,000 house. But the appraiser says the house is worth $95,000. The lender isn't going to give you a $97,000 loan for a house that's worth $95,000. Either you will have to negotiate a lower price for the house or you will have to pay the original price but come up with a bigger down payment and borrow less than $95,000.

Condominium or townhouse 
When you buy a condominium or townhouse, as opposed to a single-family detached home, you generally receive exclusive ownership of the interior space of your unit and joint ownership of the common areas (walls, grounds, fences, facilities) with the other owners in the complex. In the case of a townhouse, you might also own a back yard and garage.


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