In the past getting a loan used to be a pretty intimidating process, getting dressed in your Sunday best, looking your best and venturing into town to the bank for a date with the Bank Manager. Once there you used to have to throw yourself at the mercy of the manager and plead for them to lend you money, getting declined for a loan was often a demoralising and embarrassing process.

These days applying for a loan is much more stress-free with the decision on whether you get given the money being based more on details such as your income, credit report and other factors, but still people can get turned down for reasons other than a poor credit record. In light of the recent credit crunch many banks are being more cautious about whom they lend money to and in some cases have ceased offering unsecured loans.

Luckily there is another option for those turned away, and no it isn’t visiting the local mafia! Peer to Peer Lending is a recent phenomenon in the lending business where organisations bring people looking to borrow money together with people who are willing to lend money. Companies such as Prosper, Zopa and Lending Club offer this service and have proved popular.

These personal loans are a bit of a hit and miss though with some lenders sticking to a high Interest rate in order to make their investment worthwhile, lenders are warned that the larger the amount they are willing to lend is, then the more risk they are putting themselves into. Obviously all loans from these services are not secured loans and so there is little equity for the lenders to be assured by.

Lenders are urged to check the site’s procedures for getting repayments as in some cases the lenders may default on their repayments and this is to be expected as the type of borrowers this scheme appeals to are mostly people who have been deemed high risk by the banks and refused conventional loans.

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Your credit score could make or break you in 2008. With all the foreclosures and defaults on credit cards, banking guidelines are getting tough. During the “Real Estate Boom” just about anybody could get a loan. Mortgage companies were just giving money to anyone that came along. Someone pulled the wool over the eyes of Wall Street. I personally was doing loans that I knew would default, but if I had denied the loan, they would have went somewhere else. The guidelines where so liberal that anyone with a job could have got a mortgage. Even credit card banks were extending credit to high risk borrowers. Now our banking and lending institutions are in a major clean up transition. I have noticed that some of the new guidelines for lending this year are getting to the point where good credit will only be allowed to get loans. It’s amazing how Bankers swing from the left to the far right to make an adjustment when it comes to Credit Risk. Freddie Mac and Fannie Mae of course are in business to make money, so it’s really like a cycle. Underwriting guidelines will tighten up, and then they will loosen back up.

So the question is, how long will it take for Creditors to loosen up on credit risk guidelines? Believe it or not, the U.S. had the same foreclosure crisis in 1998. The only difference was there was less publicity because there were less public traded companies involved that went out of business. So Wall Street was not affected like it has been recently. During this time of banking institutions going out of business, the Feds have lowered rates dramatically. It’s a great time to buy a house if you have decent credit. So what if you don’t? Maybe you are unsure where you stand with your Credit. There has never been a better time to get on top of your Credit Report than now. It really stinks to rent, drive a junk car or get denied for credit when you really need it because of your Credit Score. I personally think 2008 is a time to step back look at your personal finance and please don’t try to keep up with the Jones, cause you are not going to take it with you. Just remember, good credit, good health and low debt is the path to prosperity in 2008. It really looks like Banking will tighten up over the next 3 years and the lending will never be the same again.

So if you want a piece of the American dream, please stay on top of your personal credit. Remember “Your Credit is your Life.”

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If you are interested in buying a new home, you will likely have to obtain a mortgage. If you are like many other individuals, you are unable to buy a home without one. If you are a first time homeowner, you may not know exactly where you should go to get a mortgage. The good news is that you have a number of lending options.

The first place that you are likely to approach, when looking for a mortgage, is an individual or company that specializes in offering mortgages. These individuals or companies are often referred to as mortgage lenders. Mortgage lenders focus solely on home loans. As with all other financial lenders, you can find mortgage lenders all around the world. Since there are a large number of mortgage lenders, you may find it difficult to choose a lender to work with.

If you are interested in working with a mortgage lender, it is advised that you schedule a consultation appointment or at least speak over the phone. If you make the decision to work with an individual or company that is known as an online mortgage lender, you are still advised to make direct contact. This contact should be done over the phone, but email contact may be sufficient enough for you.

When speaking to or meeting with a mortgage lender, you will need to discuss a number of important things. If you are only looking for information, you will want to discuss your past credit and your current financial situation. This will give a mortgage lender the ability to give you an estimate as to how much money you may be approved for. If you are looking for a low-cost mortgage, you will also want to familiarize yourself with the financial lenders policy on down payments and interest rates.

Mortgage lenders are popular, but they are not the only way that you can obtain financing for a new home. A traditional financial institution, otherwise known as a bank, can also offer you financing. Many individuals prefer to work with their local bank. This is because trust has often already been established. When seeking a loan from your local bank, you will want to ask about the above mentioned information. As with a mortgage lender, you should try and determine what your interest rate will be, the amount of money you can borrow, and if a down payment is required.

Even if you are interested in obtaining a mortgage from your local bank, it is still advised that you examine your lending options. You should compare the interest rates, loan amount, and down-payments of multiple banks and financial lenders. The goal of most potential homeowners is to own a home, but save money at the same time. To save money, you will need to find a low-cost mortgage. This can easily be done by comparing offers.

Once you have closely examined all of your lending options, you can make a decision. After that decision has been made, you will want to fill out a loan application. Once that application is submitted, you may receive a response in as little as one week.

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