The continuing credit crisis is not making it any easier for borrowers. Banks have become even more hesitant to lend money despite cuts in rates by the Federal Reserve. The Vice Chairman of the Federal Reserve, Donald Kohn said on Thursday in remarks at a meeting sponsored by the Richmond, Virginia Branch Office of the Federal Reserve Bank. With the more stringent conditions, prospective home purchasers must now navigate through the mortgage loan process carefully, although buyers have some alternative styles of financing available. There are mortgages available for people that have little or no down payment money. There are loans for Doctors just out of medical school, who expect their income to rise quickly in a short period of time. There are also loans for observant Muslims, who are prohibited by Islamic law from paying interest. There are also "hybrid ARM's" Adjustable Rate Mortgages's. People with very good credit may qualify for 3/1 ARM's at less than a 5% interest rate. A 5/1 ARM has an introductory rate that lasts five years. www.bankrate.com www.cnbc.com
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