We’ve heard a lot about trying to borrow money recently: There’s none available. Banks are holding onto their funds. The requirements are so high no one can get a mortgage or buy a car.

But what if you do want to buy a house – you need more space or you have to relocate for work? What if your 12-year-old minivan died on the freeway, and you need a way to get to work?

We talked to bankers, loan officers, mortgage brokers and car dealers in the South Sound to find out what’s going on.

The bottom line? There’s money out there, but you have to be able to prove you can afford a loan and you probably will need a down payment.

HOME LOANS

Don’t listen to all the bad news, there are still loans out there for home buyers – if they can qualify.

Bill Riley, an owner of GMAC Real Estate in Puyallup and vice president of government relations for Washington Realtors, said last week, “There is money available. Some of the money is a little tough – people actually have to have a job.”

Banks and credit unions say credit requirements and down payments mean more scrutiny for buyers.

THE RIGHT BANK

Trey Bemis, residential loan officer for Columbia Bank in Tacoma, said the first thing a potential borrower needs to do is find the right lender and make sure it is a stable institution. Look for longevity over deals.

“People are still in the mind-set of who’s giving me the best deal,” he said. “This is something where common sense comes in,. It’s great to rate shop, but at the same time if you don’t know who the lender is on that loan, it’s a great risk you take.”

GOVERNMENT INVOLVEMENT

The Federal Housing Authority, Riley said, is taking a larger role in financing home loans. “FHA, which wasn’t a big player, has become a big player in the marketplace. Eighteen months ago, they were 5 percent of the market, now they’re 35 percent of the market nationwide.”

Riley suggests that people seeking a loan should contact a Realtor, who could then provide contacts and information concerning a loan.

MORE ON HELP FOR BUYERS

“FHA lending remains largely unchanged,” said Adam Stein, immediate past president of WAMP and president of Integrated Mortgage Originations Systems of Auburn. “There are a number of programs – there are no more zero-down, poorly underwritten loans, but traditional loans are much the same. To qualify, you will need to verify your income, have reasonable good credit, and there are a number of programs for first-time buyers.”

He points to a program sponsored by the City of Tacoma – which offers down payment assistance of up to 6 percent of the cost of a home located in certain parts of the city – as well as another for rural housing loans. Mortgage brokers, he said, can offer full details.

CREDIT SCORE

Although each loan is different, banks and credit unions say a cutoff credit score for home loans is about 650 to 680. Anywhere lower is tough to negotiate.

“The higher the score, the more flexible the program, it will be easier and less cost prohibitive,” said Aaron Bresko, vice president for lending at BECU.

MONEY DOWN

Possible borrowers will need more down payment for a conventional loan if they can’t get a government-backed FHA or VA loan. Bemis said this means a down payment between 5 and 10 percent. Government-backed loans require about 3.5 percent down.

The most important advice for borrowers is to be prepared. Borrowers should understand their credit, what they can afford and be comfortable with a lender before any decisions are made.

“People need to be in tune to what their credit is and how to fix any blemishes,” Bresko said.

MARKET STABILIZING

As to the current atmosphere, Riley said, “The media is talking about foreclosures, and that doesn’t send the right message. It sends the message that people should wait, but I think that’s a mistake. With all the intervention at the federal level, you’re seeing a stabilization of the credit markets, and liquidity.”

And although there’s mortgage money available for the end buyer, he said “there’s not a lot of construction money for the builder-developer. Developers are trying to settle up their standing inventory. They’re dormant right now.”

VIEW FROM A MORTGAGE BROKER

Jason Bloom, president of the Washington Association of Mortgage Professionals, said last week, “There certainly are opportunities and options out there for people who want to finance homes. I think there are folks who are sitting in the sidelines saying they’ll wait, because home values will decline. Well, one of the things consumers need to keep in mind is that interest rates are historically low. Let’s say they’re waiting for a 5 percent decline in home values, and three months from now, interest rates may be a half-percent higher. The net effect will be the same.”

Bloom said he knows of several sources of home loan financing currently available, including some well-known names.

“When the feds took Fannie Mae and Freddie Mac, they didn’t do it to shut those organizations down. They did it so those organizations would remain healthy and vibrant and so lending could continue at a reasonable level.”

Consumers, he said, “should not be scared or worried. They should call their mortgage broker or loan officer.”

AUTO LOANS

Preparation is also the key for anyone looking to buy a car. Buyers need to find exactly what they want, understand the price and whether the lender is right for them.

“The more information the better,” Bresko said.

LOANS AVAILABLE

“I spend my whole day talking with lenders from all different credit tiers,” said Frank Potis, finance director at Korum Automotive Group of Puyallup. “Everybody is looking to lend money, to build their portfolios.”

He also cited some familiar names.

“At financial institutions like Wachovia, their car side is thriving. Credit unions in Puget Sound are very big and very stable. Bank of America, Chase, those people – if they financed cars a year ago, they’re still trying to finance them today.”

Potis suggests that consumers “do their homework. Know what’s available. Maybe it’s your own bank or the manufacturer, Ford, Toyota – all of these manufacturers have money to lend at good rates. If people have a bank that they’ve been doing business with, they can be educated by that bank.”

He said, “I think people are scared. I think they’re going to be excited, whoever is elected. I believe once we get past that, people are going to relax and believe.”

CREDIT SCORE

Borrowers from BECU, who have a good credit score – 700 or higher, need about 10 percent down for an average car loan. The worse the credit score, the higher the down payment. The same goes for interest rates. Borrowers with good credit will get an interest rate of about 5 percent, and those with average scores get about 6.5 percent.

YOU NEED INCOME

Debbie Patterson, manager of the Fircrest branch of Columbia bank, said that for someone to be approved for a loan, they have to show two years of good credit history, two years of stable employment and enough income.

People might not be buying as much, but most banks and credit unions are still lending.

“For car loans, as long as they qualify and have the proper down payment, we are still doing business,” she said.

Brian Everstine: 253-597-8374

C.R. Roberts: 253-597-8535

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