When credit is tight, getting the best loan

Now more than ever it pays to be a prime borrower - here's how to be that guy.

by Carolyn Bigda
posted by Greg Lipinski

Just as housing prices stall, lenders are making it tougher to borrow.

A recent report from the Federal Reserve shows that 15 percent of U.S. banks began tightening credit standards at the end of 2006 - the most since the early 1990s.

Since then, the belt-tightening has only accelerated as lenders worry about a slowdown in home price growth and borrowers' ability to repay their loans.

In December, for example, EMC Mortgage Corp., a subsidiary of Bear Stearns Companies, as much as doubled the amount of cash savings that loan applicants need to qualify for a loan.

Then in February, the bank announced it would no longer offer so-called "piggyback" loans, which let consumers finance 100 percent of a home's price. Now, you must put down a minimum of 5 percent or 10 percent, depending on other factors in your loan application.

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