Lending guidelines tightened significantly, thank goodness, toward the end of the last decade but that was after the damage had already been done. The result was a significant loss in property valuation that provided real estate investors with aqualifying for a mortgage remarkable opportunity to buy undervalued real estate once the dust settled.

Over the past couple of years, when home prices nationally have been on a steady recovery, both cash buyers and those who qualify under the new lending guidelines have benefited. Yet there is still somewhat of a myth that no one can get a loan. That’s ridiculous. Mortgage loans by the thousands are approved every day and as you read this, there’s no end of buyers and sellers sitting at a closing table.

However, rumor sometimes appears to be the truth when heard often enough. This keeps many on the sidelines who could benefit from buying and owning real estate, thinking their current position won’t get them qualified and that only those who don’t need a loan are the ones who get them. But that’s simply not true.

Lenders today follow guidelines established from the very beginning; they just strayed from them for too long and offered toxic loans that only lined the pockets of loan officers. In order to be approved for a loan to buy a rental, you don’t need a perfect 850 credit score. Yes, you need good credit, but it doesn’t have to be platinum. Most lenders today ask for a credit score of 660 or above to be eligible for an investment property loan.

Income is verified by reviewing the previous two year’s income tax returns and most recent pay check stubs. Including the new mortgage payment from the rental, all monthly debt should not exceed 35-43 percent of a borrower’s gross monthly income. And for a down payment? 20 to 25 percent is sufficient to satisfy any conventional lender.

Loans today are made with common sense. Make sure the borrowers can afford the payments and has demonstrated a solid credit history in the past. That’s really all there is to it.