Need a Loan?
By Barbara Kiviat
Mortgages
Mortgage rates are just about where they were at the start of the year--and historically speaking, a 6% loan for a house isn't that bad. The trick is getting approved for one. A borrower with a 680 credit score who a year ago could have gotten by with a 5% down payment might now have to pony up 15%. And good luck if you want a jumbo loan (above $417,000 in many areas), which now carries an average rate 1.3 percentage points higher than other mortgages, according to Bankrate.com That's more than a smidge above the historical quarter-point spread, since the government doesn't buy jumbos.
Credit Cards
Those relentless credit-card offers left in your mailbox dropped 17% in the second quarter compared with last year, according to mail tracker Synovate. Who's being ignored? The less affluent: 52% of households with income below $50,000 have gotten an offer this year vs. 66% last year. Even if you already have plenty of cards, you're not immune. Card companies are taking a hard look at customers' credit profiles, especially in the areas with the most house-price deterioration. American Express typically cuts the credit limit on about 4% of its cards each year. That figure now stands at 10%.
Auto Loans
The average 60-month new-car loan is priced at 7.10%, not much different from in the spring, according to HSH Associates, Financial Publishers. Those 0%-financing deals still exist too, from automakers desperate to move the metal. But you're not going to get that rate (or maybe any) unless your credit score is north of 700; a year ago, 620 might have gotten you wheels. Even people with good credit are starting to see trouble. The dealer network AutoNation reports that approval rates for that group have dropped to roughly 60% from 90% a year ago.
Student Loans
It's grim news: 137 lenders have stopped funding federal student loans and 33 have dropped private programs, according to FinAid.org publisher Mark Kantrowitz. Students at community, technical and for-profit schools have been the hardest hit. Federal Stafford loans were up in the second quarter compared with 2007, but loans made to parents through the PLUS program, which looks at credit history, plummeted--down 29% in dollar volume. Since May, the Education Department has spent some $5 billion buying loans in an effort to reignite private lending.