The money meltdown on Wall Street is forcing many banks and lenders to rethink they way they're doing business in northern Michigan. Many area mortgage lenders say they have not given up on home loans, instead have come up with tougher requirements.
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The money meltdown on Wall Street is forcing many banks and lenders to rethink they way they're doing business in northern Michigan.
Many area mortgage lenders say they have not given up on home loans, instead have come up with tougher requirements, but uncertainty about the financial future is leaving a lot of unanswered questions when it comes to loans.
"One of the most common questions I'm asked is can I still get a mortgage?," said Bay Mortgage Company broker Dave Durbin. He says it's question he's been answering all day. "Yes there are still loans available, there are still funds available, but you got to do some leg work on your side to qualify," said Durbin.
But he says they have had to make some changes to battle the financial crisis. "For borrowers the simplest way to put it is you need to come prepared," said Durbin.
Prepared for new higher lending standards including a credit score of 740 or higher, and every 20 points below that fees and interest increase. Then you'll need a down payment of at least three to five percent and you'll have to show proof of income.
"You've got to qualify for a loan now you can't just have a pulse and desire to have a loan," said Durbin.
It's an approach even area banks are following to battle the financial crisis. Down the street at the Bank of Northern Michigan the Vice President there says they say the crisis coming and he says they have a plan to keep loans going.
"We really look closely at the people who we loan to the companies we loan money to in order to make assessments on if they can repay," said Bank of Northern Michigan Vice President John Paul.
But by how much he says varies for each person. Though there are some key elements they're looking at before handing out the cash including debt to income ratio, value of property, occupation, and credit history. It's an effort they hope will keep the local lending industry going.
Many area banks and lenders say they are able to keep lending out loans because they have stayed out of subprime loans.
