How to Improve Your Odds of Getting a Mortgage

By Sheryl Nance-Nash

More than 2.5 million people were turned down for mortgages in 2010, according to the Federal Financial Institutions Examination Council. That's about 23 percent of all those who are seeking a loan to buy a house.

Compared to just a few years ago, the number is quite low -- but it's sure not because lenders are making it easier. It's because fewer Americans feel ready to buy a home.

With statistics like those, it's clear that the housing market isn't going to lead the nation out of its economic doldrums, and the numbers are none too encouraging for anyone eyeing a real estate purchase. Whether you're a first-time homebuyer looking to capitalize on historically low interest rates, or a homeowner hoping to upgrade, figuring out how to get a smile out of a lender is task No. 1.

So what do banks want, anyway?