Are you worried that the failure for Congress to pass the Federal bailout will create you to have a tougher time to get a home or auto loan? Well, you should be. The credit crisis has banks less willing to lend money to each other, which ultimately means it will be harder for borrowers to get the credit they need. But that doesn’t mean it’s impossible to borrow money for those in good credit standing. From a consumer standpoint, credit hasn’t “dried up” says Lonestar’s Sr. Mortgage Broker Shon Lorg. “If you’re somebody with excellent credit, you’re in a good position to borrow money.”
Maybe so, but you’ll have to shop smart to find the cash you need at a price you can afford. The key to consumer credit markets now is this: standards are back. Lenders are no longer throwing money at people who can’t prove they can comfortably pay it back. That means that the first step in the borrowing process is making sure your credit report is squeaky clean and your credit score is a minimum of 680 and preferrably 720. You can get a credit report for at freecreditreport.com or annualcreditreport.com for approximately $16.00.
If there are problems,then contact your mortgage broker for a preferred credit repair company and start correcting your credit prior to make application for a loan.
Ultimately the bailout bill should and will go back through the house and will be passed. It may not be in it’s entire original form or be any where near $700 Billion dollars but a traunch of the bill will be approved to tampen down the fears of wallstreet. Consumer confidence must be strengthened to ensure mass panic doesn’t insue and employment tumbles. The big bailout won’t prevent recession, according to many economists, so consumers who don’t have emergency funds and worry about their job security should think thrice before taking on new obligations. so when does a home equity or new loan make sense? A new loan makes a lot of sense for someone seeking to refinance a bad loan, buy their first house at a nice price, or get that fuel-efficient car they’ve been planning on for a while. And though interest rates have moved up slightly during the recent tumultuous weeks in the market, today’s rates may seem low compared to what they are predictted to look like in the future. Most economists are predicting interest rates to gradually start climbing and possible hitting a pinnacle in 24 months at an estimated 8% or higher.
Still not sure if the time is right for you? Whether it’s a home or auto loan, here’s how to find that cash now. Mortgages Conventional borrowers seeking less than $417,000 )Fannie Mae/Freddie Mac limit) in most housing markets—will not have trouble finding loans. Expect to pony up a down payment of at least 5 percent (20 is better) and prove that you can cover all of your monthly debt payments with about 40 percent of your pre-tax income. Big borrowers and commerical loans is where most borrowers will run into problems in the coming months. In short the market needs to correct itself and this will either take two years or five years depending on how much governement intervention this is in the coming years.
