Mortgage Terms Tighten; Rates Rise

The Wall Street Journal Reports that nervous lenders are continuing to tighten up on terms and raise interest rates as the subprime mortgage problem continues to grow. One large lender, Welles Fargo has raised its prime 30-year rate for a jumbo mortgage to 8%, up from 6 7/8% just last week!

So called “no doc” loans — those that do not require verification of claims about income etc — are going to be a lot harder to get, of you can get them at all. And loans without down payments are also going to be scarce or non existent.

The Journal claims that much of the problem is due to skittisheness in the so-called secondary market for bonds based on mortgage loans. So, you may find that you get a better deal with a local bank that does not “sell” its mortgaes into the secondary market. But in any case, the days of easy money seem to be gone, at leats for now.

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