According to many economists, the strain in the financial system caused by the subprime contagion could be with us for some time. This is no consolation to America's investors and homeowners, many of whom have experienced the double whammy of market losses and declining property values.
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It's also discouraging news for the nation's borrowers.
"We're still in a period of time where banks are taking large write-offs and they're being extremely cautious in their lending," says Chris Farrell, economics editor for Marketplace Money, a weekly personal finance program syndicated nationally on public radio by American Public Media. "Lenders are more scared than consumers, and if you are a loan officer right now, the word has come down from the top to only lend money to people who don't need it."
Farrell, who got his first real lessons in personal finance as a merchant seaman working in the engine room of ships for four years after college, spoke at length with Bankrate about what borrowers can expect in today's tightened lending environment.
 How hard is it to get a home loan today, and where can consumers get the best deal? Is a mortgage broker the best place to get a competitive home loan? Or are consumers better off dealing with a small local bank or a credit union?
Well, the answer to the question, "How
hard is it to get a loan today?" really depends
on how big a down payment you are willing to make.
A couple of years ago, it was common to get loans
for no money down -- or for 1 percent, 5 percent or
10 percent down. That wasn't a problem at all. But
today, lenders are looking for a minimum of 20 percent
down. And if you can put down that amount, you shouldn't
have any problems getting a loan in today's environment
because lenders will consider you more desirable.
I've always thought that credit unions, if you happen to belong to a credit union, are the first places you should go to shop for a mortgage. But there are services, such as HSH.com, that can send you a printout, for a nominal price, that tells you the current mortgage offerings in your area. This information allows you, from the comfort of your own desk, to do some pre-shopping.
(Note from editor: You can also compare mortgage rates for free at Bankrate.)
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