Monday, October 13, 2008

Borrowers with good credit, down payments still can get loans

Borrowers with good credit, down payments still can get loans

By Tim Tresslar

Staff Writer

Sunday, October 12, 2008

When it comes to home mortgages, what was old is now new again.

Old as in the old-fashioned notion of a down payment. Even with credit tightening and the global banking system roiling, local lenders say they have money to loan. But borrowers will have to pony up more of their own money than they would have during the housing bubble's heyday.

"The days of 100 percent loans, where there was no down payment required, are by and large over," said Doug Fecher, president and chief executive of Wright-Patt Credit Union.

In the case of Wright-Patt, other credit unions and community banks, this doesn't mark a change, Fecher said. At Wright-Patt, borrowers always needed a down payment of between 3 and 5 percent as well as enough cash or other assets socked away to cover a couple of months' payment should the borrower lose their job or hit other financial problems, he said.

Chuck Edmonson, a spokesman for Fifth Third Bank of Western Ohio, said down payment requirements and interest rates differ among banks and borrowers. But consumers with good credit continue to get loans, he said.

"The key is to make as much of a down payment as you can," Edmonson said. "The more of a down payment you can make, the better the chances will be of you getting a favorable interest rate."