Bank Proposals

With European leaders due to meet on Oct. 23 to tackle the debt crisis, Venizelos said today that a law on new cuts to pensions, wages and jobs must be approved by Parliament before then. European Commission President Jose Barroso pledged to present proposals tomorrow on the recapitalization of European banks for discussion at the summit.

“The crisis has reached a systemic dimension,” ECB President Jean-Claude Trichet told lawmakers in Brussels today. “Sovereign stress has moved from smaller economies to some of the larger countries. The crisis is systemic and must be tackled decisively.”

European officials are toiling to meet an end-of-month deadline set by French President Nicolas Sarkozy to get to grips with the crisis, which has propelled Greece to the brink of default, shaken world markets and fueled speculation that the 17-nation currency might not survive in its current form.

Troika Report

The so-called troika of creditors to Greece will need about 10 days to prepare a report that will form the basis of EU talks on changes to a July 21 accord on future financing for Greece. Germany, Europe’s dominant economy, is pushing for a bigger reduction in Greece’s debt burden to forge a lasting solution to the debt crisis that has roiled markets and shaken confidence in the euro.

“Once the Euro group and the IMF’s Executive Board have approved the conclusions of the fifth review, the next tranche of 8 billion euros will become available, most likely, in early November,” the statement said.

Greece’s debt load will climb to 172.7 percent of gross domestic product in 2012 as the economy contracts for a fifth year. Greek bank stocks slumped for a second day today amid talk of a deeper write-down of their holdings of government bonds. National Bank of Greece SA, the largest, lost almost 16 percent to 1.60 euros at 5:19 p.m. in Athens.

German Chancellor Angela Merkel said on Oct. 9 after meeting with Sarkozy that the Troika report will help determine the next steps. Belgian Prime Minister Yves Leterme said yesterday the crisis summit now scheduled for Oct. 23 should focus on boosting the 440 billion-euro rescue fund.

To buy a house in this historically affordable market — and get today's best or near-best rates on a mortgage — you need a perfect credit rating and 20 percent down, right?

Well, no. Not really.

Despite news reports that banks have tightened lending standards since the financial crash of 2008, it's not necessarily as bleak as all that, industry and finance experts said.

In Dane County's housing market, which remains slow but was never hit as hard as other parts of the country, decent credit and a modest down payment, if that, may be enough to get loan approval.

"If you have a little bit of dinged-up credit, even if you have a late payment here or there on your credit report, you're still going to be able to get good rates," said Erik Sjowall, president of Madison-based Bunbury and Associates Realtors.

There are still incentives available for first-time buyers, and many state and federal programs aimed at low- to moderate-income people offer affordable, competitive mortgages for 5 percent down or less.

And if you don't fit those categories, local banks and mortgage brokers say they're ready to lend to any qualified borrower at good or great rates, even if your credit score doesn't top 740, which is generally the minimum needed to get the very best rates.

"You don't have to put 20 percent down," said Steve Jacobson, founder and CEO of Fairway Independent Mortgage Corp., a nationwide residential lender based in Sun Prairie. "Most people put 10 percent or 5 percent down."

Whether it's a good idea to get into a house that way, with little equity and likely a long loan to make payments affordable, is a different question, and the answer depends on individual circumstances.

Even with record-low interest rates, there are no shortcuts to making a smart home purchase, consumer finance advocates warn.

"Somewhere in the transaction, you're going to pay for it," said Kate Nardi Sullivan, housing counselor at the Dane County Housing Authority. "The best thing you can do is work on your credit score. That saves you money."