The debt ceiling ... the U.S. Loses its triple A credit rating ... Earthquakes on the East Coast  is the world coming to an end? Probably ... (not) but with all these recent anomalies it certainly feels like we are in the Twilight Zone. It has been almost 3 years since the Fed cut its key rate to almost zero. August 9th, the central bank said rates are likely to remain there until at least mid 2013. Even though that doesn’t bode well for the stock market’s prognosis in the future, there are some pros and cons.

The benefits may not flow so easily. Consumers are showing few signs of wanting to borrow, bank and insurance companies profits are most likely going to suffer and with the stock market sliding, pensions and 401ks face years of low returns. For consumers, low rates mean cheap loans for everything from a new home to a new car. For the many baby boomers nearing the end of their working lives, low rates also deliver meager returns on fixed income investments. With the stock market well below it’s 2007 highs, that is going to be particularly painful.

The U.S. economic news and projections are front and center in everyone’s mind these days. Though the markets are nervously reacting to the ever changing news, investors are still buying. Investors rushed to buy treasury notes and bonds this week, for a safe haven to place their money. This was favorable for interest rates, as the 10 year Treasury yield is the benchmark for 30 year fixed rate mortgages.

It's no secret that lending guidelines have tightened, but what is not widely reported is that guidelines are now where they were 15 - 20 years ago -- before the bubble.

Documentation from an applicant is key for a lender to make a sound decision to lend hundreds of thousands of dollars to an applicant. When applying for credit, expect to provide detailed information about income and liquid/non liquid assets. Good credit scores are also important in the decision process and determining an interest rate. However, a slightly lower score will not necessarily preclude you from obtaining financing.

Loan approvals involve balancing levels of risk, and providing strong, documented mortgages to investors who will buy mortgage backed securities. Investors can be fund managers who buy pools of mortgage securities, and place them in mutual funds you invest in. In the long run, fully documented mortgages benefit everyone with stronger, more secure investments. Keep your eye on the prize, and provide all the information your lender requests, so you can get the approval you want. Applicants can feel judged or deflated if unable to obtain the financing they seek. Remember it is not personal and is not forever. Don’t be afraid to apply for a loan. Mortgage institutions want your business, and appreciate the opportunity to give you the financing you need.

Debbie Saulsberry works with HLM Mortgage Company and can be reached via this publication.