The Sewing Mom

When we purchased our new home back in April I was amazed at how fast we were able to get our loan and close escrow, it was 9 days from start to finish! Of course, I had called the lender about two weeks in advance and been pre-approved, but none of the paperwork had been done. We have very good credit which is what allowed the loan process to move so quickly but it still surprises me how fast it all went.

Not long after that is when it started being reported in the news how the banks and other lenders were having problems because so many people were defaulting on their home mortgages. Not surprising to hear that many times this was a result of banks not doing their research on their customers before approving loans.

Over the past few years it seems that banks and lenders were becoming more and more creative with their financing options and enticing people to take out [tag]personal loans[/tag] as well, many times when they couldn’t afford that on top of their other debt.

I think people need to use more common sense when getting any type of loan and I realize this can be difficult when they feel they are in a financial crisis. These creative loans, sometimes interest only loans, can be very scary and have found people filing bankruptcy because they have no equity and can’t afford to make their payments. [tag]Secured loans[/tag] typically offer a lower interest rate, but I believe most people should stick to the more traditional type of loans and definitely stay away from interest only.