Economic Slowdown Affecting Home Loans

The cold, hard truth is the days of "no money down" and "everyone-gets-a-home-loan" are over.

Wednesday, October 15th 2008, 10:12 pm

By: News On 6


By Ashli Sims, News On 6

TULSA, OK -- The economic slowdown is having an effect on some to get a home loan. The credit crunch has put the brakes on car loans. But is it stealing the dream of home ownership?

The cold, hard truth is the days of "no money down" and "everyone-gets-a-home-loan" are over. But local experts say there is money out there. It's just harder to get.

Finding your dream home might be the easy part, getting financing could be the nightmare.  The sub-prime mortgage meltdown continues to haunt the economy.

The stock market is on a scary slide and big-time lenders are on life-support. It all has some wondering if the mortgage money has dried up.

"Yes, we have money to lend. The mortgage market is still very strong," said BOK Mortgage Gaylyn Haynes.

Haynes says Tulsa continues to enjoy a strong real estate market and BOK never really dabbled in sub-prime loans.

"Course the sub-prime loans have pretty much gone away. But at BOK Mortgage, we were never really in the sub-prime market, so our market hasn't really changed that much," said Haynes.

But what has changed is the era of "interest only", "no money down" loans for folks with anemic credit scores.

"620 is considered low, where previously 500 was considered low," said Haynes.

"A year ago, two years ago, it was more easy for them to step right on into a loan with a low credit score. Whereas now that has completely changed," said Brandy Holleyman of the Community Action Project.

Holleyman counsels first-time home buyers.

"I think there is that component of people being scared or maybe having the perception that there is not money out there available for them, when indeed there is. It's just harder to get to," said Holleyman.

Holleyman says clients need to clean up their credit scores to turn that for sale sign into sold. But your interest rate may not be as good.

Haynes says it's bounced from slightly below six percent to almost seven percent in the last 60 days.

"And the market can move but it may move right back down. So just because the buyer misses the chance to lock that rate in doesn't mean it's gone forever," said Haynes.

It's all a matter of perspective. The rates are below seven percent, right now.

Gaylyn Haynes says it was 17.5 to 18% in the 1980s.

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