Tighter credit market hits low-risk borrowers

Loan applicants with solid credit are rapidly facing more scrutiny as the subprime mortgage crisis spreads and the credit market tightens. Lenders are increasing interest rates on prime mortgages and rigorously examining income, credit histories and home appraisals. No-money-down products for applicants with strong credit are being pulled, and lenders’ guidelines are changing quickly. Lenders are demanding reserves equal to six months of a home’s mortgage principal, interest, tax and insurance payments, instead of two. more [WSJ]