Top Exec Blog (Web Log)

Undoubtedly, if you're reading the news, listening to the radio or scanning the web for the latest in business and the economy, you've heard that the mortgage industry (subprime lending) is in a "meltdown". This is worth noting, as in a previous post, mention was made of tremors in the market.

Now, according to knowledgeable sources, the pressure is on those who have less than perfect credit. To wit, the story in today's Wall Street Journal, which mentions the continuing turmoil in that sector of the economy. Read it here: Journal Article

As for the commercial side of mortgage lending, industry has tightened up its standards as well. What once was "easy money" is now more "risk averse" which means that you should work with a professional to structure your loan request, guide you to the right lending program and match your property type, cash flow numbers and other information to a successful closing. Ditto for the residential side of borrowing. Here are some ideas to consider.

You can also prepare for this new reality in borrowing money:

• Have a larger amount of cash for your down payment & closing costs
  
• Improve your credit score (pay down debts, avoid new credit lines, etc)
  
• Consider locking in a fixed rate loan, rather than allowing your interest rate to float.

It's not rocket science, as they say, but it is good business to ask for a loan that you can readily repay, while making a solid case for your business particulars that a loan committee is willing to accept, based on your information and not over-reaching. More on this in the future. Care to comment?