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Mortgage Crisis Hits Affluent Buyers, Too

Even borrowers with excellent credit are now facing higher rates

By Peter Fearon,  Newser Staff

Posted Aug 7, 2007 5:48 AM CDT
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(Newser) – Mortgage tremors have rippled so far across the home loan market that even buyers of high-priced homes with good credit records are now being squeezed, the Wall Street Journal reports. Rates have surged on loans above $417,000 for prime borrowers—to 7.34% for a 30-year fixed-rate mortgage, up from 6.5% in May.

The higher costs for so-called jumbo loans will further depress the real estate market. The credit crisis has crashed two hedge funds, put dozens of lenders out of business and triggered turmoil on global markets.  The crisis is also exacting a toll on individual families who no longer qualify for mortgages—or can't afford increased rates.

Realtors take a first look at a new $489,000 home going on the market, Friday, July 6, 2007, in Draper, Utah. Sales of new homes fell in June by the largest amount in five months as the housing industry continued to struggle with its worst downturn in 16 years....
Realtors take a first look at a new $489,000 home going on the market, Friday, July 6, 2007, in Draper, Utah. Sales of new homes fell in June by the largest amount in five months as the housing industry...   (Associated Press)
years. (AP Photo/David Zalubowski)
years. (AP Photo/David Zalubowski)   (Associated Press)
A home for sale shows the owner has lowered the asking price, Tuesday, July 31, 2007, in Cincinnati. With the housing and mortgage industries plunging deeper into distress, investors around the world are losing their stomach for risk. This means it will cost more to borrow, which could harm the...
A home for sale shows the owner has lowered the asking price, Tuesday, July 31, 2007, in Cincinnati. With the housing and mortgage industries plunging deeper into distress, investors around the world...   (Associated Press)
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Credit Crisis

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US • Money

 
real estate • subprime mortgages • Bear Stearns • mortgage • loans • hedge fund • houses • home loans • Fannie Mae • borrowers

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