Credit problem: expensive loan

Mortgage and Lending with kandola mortgage services


Credit (borrowing) has become scarcer, rather than simply more expensive, which could affect the real economy

in at least three ways. It could make the already large overhang of unoccupied housing worse, curb consumer

spending, and constrain capital spending and hiring by firms that depend on external financing. And then what?

Will this housing problem infect other parts of the economy? The "wealth effect" that housing in the past has

brought us is almost gone in many parts of the country. Home equity helped the consumer stay ahead of the

game but that has been stripped for the most part. The number of eligible borrowers has dropped while the  

amount of homes available has significantly increased. Many consumers are struggling to make ends meet

especially with the cost of energy and food soaring, and if they're spending $60 to fill up their SUV twice a week

there is less money for restaurant meals or the new Sony Playstation.



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