Changes are coming that will affect most Americans who will seek to borrow money in the future. Here are some of my predictions: (Note some of these changes have already occurred).
- You will need a substantial down payment to purchase a home. Yup, we essentially back to the 20% down payment requirement of the past.
- It will be harder to qualify for a mortgage. To get the best rates a FICO score of over 760 will likely be necessary.
- It will be harder to get a home equity line of credit and the loan-to-value ratio of the credit line will be lower than in the past
- It will be harder to get an auto loan unless you have great credit.
- Fewer auto lease deals will be available (We’re already seeing that with domestic makes).
- It will be harder to get credit cards and credit lines will be lower.You will see fewer credit card offers in the mail.
In essence the days of living on borrowed money are over. For those of you who are working with me, most of you have already made that transition and are ahead of the game. For the rest of you it’s coming if it hasn’t already.