Banks are still lending money

Money is tight across the board, but this is also the time to get a deal on just about anything such as homes and businesses. But finding financing is the tricky part.  Banks have a tight grip on their money right now. But, if your credit is solid and you have some money, you can find money.  The credit crunch, job losses that are pushing foreclosure rates even higher and day after day market losses, it’s hard to think about taking advantage of the deals that are available right now.
Many banks are in trouble themselves and are holding on to their money. The federal funds rate, the rate banks lend money to themselves is at 1%. The prime rate is at 4%, that’s the borrowing rate for the most credit worthy customers. That’s down from 7.5% just a year ago.
The rates keep dropping in hopes of boosting consumer confidence, so consumers will buy houses and both open new businesses and keep existing ones open. But, banks are making sure borrowers are able to pay back the loan.  Jimmy Clarkson, President of Horry County State Bank said, “The key is, can people afford to pay it back? We’re in the business to make loans. That’s the way we make our living. Rates are low, so from that standpoint, the cost of borrowing money is good to the borrowers. It’s simply a matter of the ability to repay.“
The subprime lending market turned the economy on it’s head earlier this year with the housing bust so banks must be more careful.  However, Clarkson said banks are in the business to lend money so you can still find money. It’s just most banks tightened their criteria.
-Borrowers need a minimum of 600 or more credit score for most loans.
-The days of no money down are gone.  Most loan applicants will need at least 20% down. Borrowers with extremely high credit scores and high liquid assets can possibly get by with 10% down.
-No doc loans are also gone. You will need to prove your work history, salary and liquidity.
Mortgage rates on a 30-year fixed-rate mortgage fell Thursday to 6.20% from 6.46%. The drop was fueled by the weak job market and another drop in consumer spending.
  But it’s a double edged sword. As Clarkson said, “If rates drop too low, banks won’t make the money they need to lend money. Banks will turn to bonds and other investments.”>
http://money.cnn.com/2008/11/04/real_estate/job_losses_fuel_foreclosure/index.htm?postversion=2008110617  Job Losses Fueling Forecloses-CNN

http://money.cnn.com/2008/11/04/pf/forecast_home3.moneymag/index.htm  Forecast Your Home—2009