Consumer lending on the rise at smaller banks

Interest rates for home loans remain at all-time lows. The federal first-time homebuyer program has still got some steam left in it, and real estate agents are touting, "Now's a great time to buy!"

There's just one small problem: Tighter lending standards make it tougher to get a loan.

Most consumers can't buy a house without a loan, but last year at the largest 10% of U.S. banks (by asset size), consumer lending shrank by 4.7%, according to the Wall Street Journal.

Happily, there is a silver lining.

The same article reports consumer loans rose 3% at financial institutions that make up the lower 50% of industry assets. A spokeswoman for one Pennsylvania bank reported a 30% jump in consumer lending.

For consumers in the market for a mortgage, remember to shop around the same way you should when choosing a title company. Compare costs, talk to a few experts, read some blogs . If after shopping, you come to find lending standards are too strict to accommodate your needs, look for ways to beef up your down payment.

More on that a little later. ...

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