The Lull Between Christmas and New Year’s

As you can imagine, not much has happened in the markets the past few days.  I don’t expect much until the New Year.  Lenders are changing their guidelines but rates are holding steady.

I have one huge objection to these low rates the lenders are screaming from the rooftops.  Almost no one qualifies.  The banks have to make it look good though, and the media is always looking for something to say, no matter that they gloss over the important points.

If you’re self-employed, you’re almost guaranteed to get a high rate.  Why?  One of the greatest benefits of working for yourself, other than not having to answer to “The Man” is that you can write off a lot of your expenses.  The banks know that too, and they take all that away from you.  If you make $100,000 and write off $70,000 they look at your income as if you only make $30,000.  Not very fair, since if you receive a W-2 they look at your gross income.

Of course, like the newscasters I’m glancing over all the details, but you get the idea. 

The “key” credit score, that reflects whether or not you are a good person, eat your veggies and don’t beat your kids, used to be 680.  Now it’s 720.

Don’t despair.  This is just an over-reaction to the crash and burn of Wall Street.  I agree, things were loose and messy for the past few years, and many people who should never have been approved for a loan, owned 10 rental houses and a chalet in the mountains.  At some point, the lenders had to wake up and see what was coming.  But everyone is scared – each day the news gets worse, and until the banks feel some sense of security, the guidelines will continue to be tight.

It won’t last forever however.  Americans are a resiliant lot, especially where money is concerned.  We’ll swing back to some sense of normality and it will be business as usual, even if the “usual” is different.  Don’t forget, it was different in the decades before the New Millenium and we all did just fine.  So hang in there, and Happy Holidays to all!

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