Even with the more rigorous standards, many creditimpaired borrowers can find willing lenders — albeit at higher rates than were being quoted a month ago.

“I think for the vast majority of people, they don’t need to worry about it,” says Jim Sahnger, mortgage consultant with Palm Beach Financial Network in Stuart, Fla.

But a few people have reason to worry. They include homeowners with poor credit histories who want to refinance but who have less than 5 percent or 10 percent equity in their houses.

People with poor or fair credit who don’t want to verify their incomes or assets are also finding it more difficult to qualify for loans — especially if they want to borrow more than 95 percent of the house’s value.

The stricter lending standards are the fallout from the subprime mortgage market meltdown. About 15 percent of mortgage borrowers are in the subprime category. Those are the least creditworthy people, with credit scores less than 620 (on a scale of 300 to 850).

About 85 percent of mortgage borrowers have credit scores of 620 or higher. So far most of these prime customers needn’t worry about being turned down for home loans on the basis of their riskiness as borrowers, if they’re willing to let the lender verify their incomes and assets.

“We’re certainly starting to see tightening up in underwriting requirements, and they’re starting to raise the rates a little more because the loans are risky and the investor community wants higher yield on these loans,” says Jeff Lazerson, president of Mortgage Grader, a brokerage in California.

The stricter standards come in the form of higher minimum credit scores, lower maximum loan amounts and requirements for bigger down payments. In many cases, lenders raise the minimum credit score by 20 points or even 40 points to qualify for a type of loan.

Lenders have also boosted rates. Rates on the most popular type of subprime loan, called a 2/28 mortgage, have gone up about 1.5 percentage points to 2 percentage points since mid-January, says Jim Svinth, chief economist for LendingTree.com.

Svinth says one type of subprime customer could end up in big trouble: “If you were a 2/28 borrower a couple of years ago, and you can’t document your income and don’t have enough equity to put 10 percent down, and your credit hasn’t got any better, you’re in a bad spot.”

- BANKRATE

Even with the more rigorous standards, many creditimpaired borrowers can find willing lenders — albeit at higher rates than were being quoted a month ago.

“I think for the vast majority of people, they don’t need to worry about it,” says Jim Sahnger, mortgage consultant with Palm Beach Financial Network in Stuart, Fla.

But a few people have reason to worry. They include homeowners with poor credit histories who want to refinance but who have less than 5 percent or 10 percent equity in their houses.

People with poor or fair credit who don’t want to verify their incomes or assets are also finding it more difficult to qualify for loans — especially if they want to borrow more than 95 percent of the house’s value.

The stricter lending standards are the fallout from the subprime mortgage market meltdown. About 15 percent of mortgage borrowers are in the subprime category. Those are the least creditworthy people, with credit scores less than 620 (on a scale of 300 to 850).

About 85 percent of mortgage borrowers have credit scores of 620 or higher. So far most of these prime customers needn’t worry about being turned down for home loans on the basis of their riskiness as borrowers, if they’re willing to let the lender verify their incomes and assets.

“We’re certainly starting to see tightening up in underwriting requirements, and they’re starting to raise the rates a little more because the loans are risky and the investor community wants higher yield on these loans,” says Jeff Lazerson, president of Mortgage Grader, a brokerage in California.

The stricter standards come in the form of higher minimum credit scores, lower maximum loan amounts and requirements for bigger down payments. In many cases, lenders raise the minimum credit score by 20 points or even 40 points to qualify for a type of loan.

Lenders have also boosted rates. Rates on the most popular type of subprime loan, called a 2/28 mortgage, have gone up about 1.5 percentage points to 2 percentage points since mid-January, says Jim Svinth, chief economist for LendingTree.com.

Svinth says one type of subprime customer could end up in big trouble: “If you were a 2/28 borrower a couple of years ago, and you can’t document your income and don’t have enough equity to put 10 percent down, and your credit hasn’t got any better, you’re in a bad spot.”

- BANKRATE