This week, mortgage rates continued to fall, indicating a drought in consumer spending, and the immense job losses nationwide.

According to Frank Nothaft from Freddie Mac, vice president and chief economist, the economy shrank by 0.3 percent in the third quarter.

Having the economy experiencing massive job losses, foreclosures, bankruptcies and financial distress, lenders have tightened their credit standards even further.

The Federal Reserve Senior Loan Officer survey from October states that about 70 percent of the banks raised their prime mortgage lending standards, and about 90 percent of the banks offering nontraditional mortgages also did the same.

With the economy in turmoil, it is crucial for consumers and homeowners to be wiser with their spendings for months to come. Even keeping their credits in good shape is important when economy does turn around. If your credit is shot, chances of getting a loan or a refinance are slim to none. You don’t want to miss out on opportunities.

Hang in there. This economy will turn around eventually. It’s just a matter of riding out the difficult times cautiously and keeping your eye out for that light at the end of the tunnel.

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