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“We are a community bank, and look at it from the standpoint that we live here with our customers. We’re not going to put people in the position to where interest rates go up and they’ve got no equity, you put those things together and that is a recipe for disaster.” — Kyle Thomas, President/CEO, Seneca National Bank

SENECA — Despite the national storylines regarding the apparent mortgage crisis, the lending market in Upstate South Carolina is in relatively good shape, Kyle Thomas, President and Chief Executive Officer of Seneca National Bank said. While some states are seeing massive spikes in foreclosures due to the growing subprime loan folly, South Carolina is fairly stable.

“I think the main thing a lot of people think right now is that lenders have stopped making mortgage loans,” Thomas said. “That is the furthest thing from the truth. Right now we’ve got a good supply of money in the mortgage market. There is money there to be loaned.”

Thomas said if a customer seeking a loan has good credit, is willing to make a three to five percent down payment on a house and their debt doesn’t exceed 40 percent of their income, then they would have no problem whatsoever in obtaining a loan. The national mortgage picture does have some blights on it, due to subprime loans being given by mortgage brokers to high-risk borrowers. In some states, foreclosures have risen exponentially in the last few years due to subprime loans.

“In the Upstate of South Carolina, things are nowhere near as bad as what people see in the national news media,” Thomas said. “There are problems in Florida, California, Arizona and Nevada. There are some tremendous mortgage problems out there. The main culprits behind these problems are the subprime lenders. They are just brokers who rent out a building, loan to anyone and raise interest rates, and they just want a commission. They don’t worry about the consequences.”

Thomas said most national and state banks do not participate in subprime lending because of its risky nature.

“We are a community bank, and look at it from the standpoint that we live here with our customers,” Thomas said. “We’re not going to put people in the position to where interest rates go up and they’ve got no equity, you put those things together and that is a recipe for disaster.”

While the local mortgage market is much healthier now, there was once a time it too was in dire straits.

“Last July the mortgage market came to a grinding halt in Oconee County,” Thomas said. “But in the last several months we’ve been seeing a real upswing in activity.”

While there is money to be loaned, those looking to borrow still have to carefully monitor their spending and borrowing habits to ensure their credit will allow them to obtain a loan. There are many things people can do as well as avoid to ensure a good credit score, such as limiting the number of times a credit report is pulled.

“So many people do not realize that when they go out shopping, if they apply for credit, that will lower your credit score every single time,” Thomas said. “So I would encourage people to not go out and get their credit pulled all over town.”

Nonpayment of bills of all kinds also contributes to a low credit score. Some bills that could hurt may surprise many.

“If someone decides they don’t want to pay a doctor’s bill on time or a hospital bill, that could possibly lower your credit,” he said. “If there is a Verizon or Alltel bill for say $70, and they file a judgment against you for not paying, that will just kill your credit. So you’ve got to use some discipline to help your credit. Make sure you pay on time.”

There are plenty of ways to build credit, as well, such as taking out small loans from a local bank, or making limited purchases on a low-limit credit card to be repaid on time.

“There are a few ways,” Thomas said. “Go to a bank and get a small credit card or a loan of some sort, and just make sure you pay that bill in full every single month. Even if it’s only a $1,000 credit card, that is the best way to do it — just start with something very small.”

To take out a small loan, it is common for young people trying to get their feet set underneath them to enter into a loan with a cosigner, such as a parent or relative, to ensure prompt payment, which would establish a good line of credit.

Thomas said the point is that there remains very feasible options for those looking to buy a home or get a loan, especially in comparison with the mortgage crisis going on in many other states.

“If you pay your bills on time, you won’t have a problem getting a loan in the Upstate,” Thomas said. “It’s not as if the market has completely dried up.”