You'll need excellent credit and a considerable down payment to take advantage of lower home rates. And, if you currently have a house equity credit line, do not be amazed to find that your equity isn't really what it used to be, and your existing line of home equity credit may be diminished.
The Federal Reserve's second quarter lending institutions study measures the current economic conditions for property and consumer lending.
Residential home loans and house equity loans:
More than 20% of the survey respondents said they tightened up standards for prime mortgages.
More than 46% said they tightened credit standards for non-traditional mortgages.
Because fewer than three of the participants now use them, no data are readily available concerning accessibility of the riskier sub-prime home loans.
More than 35% of lenders said they made it harder for house owners to use their equity; more than 35% stated they decreased the limit on existing home equity credit lines.
Consumer loans or charge card:
10% of the loan providers reported they were less ready to make consumer installment loans.
Roughly 35% said they raised their requirements for accepted loans.
More than 50% tightened up terms on new and existing charge card.
Nearly 50% stated they decreased limits of EXISTING charge card account limitations.
Anticipating the future
Now you know how much consumer and property funding has altered in the past few months, but exactly what about the future? The Federal Reserve study asked loan providers to predict the future for residential and consumer loaning.
Prime home loans or home equity credit lines:
Just 2% anticipated to make cash any easier to come by for homeowners-- or potential property owners-- this year.
6% said they 'd probably be more going to provide beginning in the first half of 2010.
Of those who forecast simpler days for real estate borrowers, 27% want read more to the second half of 2010 for the change.
12% anticipated cash to stream more easily in 2011.
40% stated they do not anticipate to loosen their hang on residential lending anytime in the foreseeable future.
Charge card and consumer loans:
Just 3% said they 'd be more generous with credit card loans this year.
Approximately 10% stated their banks would be more likely to allow charge card loans early next year.
Practically 13% said credit card loans would be much easier to obtain during the second half of 2010.
Nearly 30% anticipated they 'd loosen up on credit card loans in 2011.
More than 30% stated their banks' tight requirements would remain the same for the foreseeable future.
Other consumer loans:
2% stated they 'd be more amenable to granting consumer loans later on this year.
Simply over 6% said consumer loans would be easier to get in the first half of 2010.
23% predicted their banks would be most likely to authorize consumer loans in the second half of 2010.
19% stated there would be no easing of consumer loan requirements up until 2011.
25% said their banks' loaning standards would remain tight for the foreseeable future.
Exactly what does all this mean for customers? If you already have a home mortgage or house equity loan, count yourself lucky, even if the terms or limits on your equity loan modification; others who were relying on their home equity for things like a kid's college education might not be as fortunate.
If you have actually been thinking about taking out a loan to fund an automobile, buy new furnishings or take a getaway, prepare for an uphill struggle, or delay your plans up until at least completion of 2011.
You may have already seen increases in interest and reduces in limits if you currently have credit card financial obligation. It may be time to find an unsecured loan with much better terms before your credit card debt buries you if so.