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NEW YORK (CBS) ― As foreclosures are increasing, it's becoming much harder to get a mortgage. More than half of all banks in a Federal Reserve survey say they have tightened their lending standards in the subprime mortgage market — it's affecting even those with good credit.

Subprime mortgages are loans offered to borrowers with weak credit histories. The Fed survey found that of 16 banks that said they were still in the subprime market, nine of those banks had tightened lending standards in the past three months. The 16 banks are among the nation's largest and accounted for 57 percent of all residential loans at the end of March, the Fed said.

Considering the atmosphere, senior financial analyst at Bankrate.com Greg McBride says it is important to find out what your credit rating is.

"Everyone is entitled to a free copy of their credit report from each of the three major credit bureaus every year," he told The Early Show co-anchor Julie Chen. "Get those copies of your credit report and correct any errors. If you want your credit score, you have to pay an extra fee. If you're in the market for a mortgage, that's a wise investment."

The Fed survey found that more than 40 percent of the banks responding said they had tightened loan standards for so-called nontraditional mortgages. The Fed defines this category as adjustable-rate loans with multiple payment options, interest-only mortgages and products referred to as "Alt-A" loans that offer such features as limited verification of incomes.

But if you have an adjustable rate mortgage, McBride said now is a good time to refinance so you can lock in a low fixed rate.

"That monthly payment that will never change will give you tremendous peace of mind," he said.

The Fed survey found that even on prime loans, which offer traditional payment options such as 30-year mortgages to borrowers with strong credit histories, slightly more than 10 percent said they had tightened lending standards in the past three months while none reported easing standards. But it is with these loans that the value lies, McBride said.

"The rates on fixed rate loans are lower than some adjustable rate, believe it or not," he said. "You're getting 30 years of protection from rising rates at a cost lower than what you would find on some adjustable rate loans right now."

McBride's tips for getting a good mortgage


• Shop around

"Start with your current bank, look at local credit unions," he said. "We also have a free search engine at Bankrate.com you can use. Cast a wide net to make sure you're searching out and finding the most competitive offers."


• Look beyond monthly payments

"Well, a lot of people zero in on the monthly payment," he said. "They put the blinders on and then they miss the forest for the trees. In particular, you want to look at the big picture, not just the interest rate, but also the fees you'll have to pay. That's really how you evaluate the total cost of the loan."


• Apply with three lenders

"The advantage there is when you apply with a lender, they give you an estimate of the fees," McBride said. "If you apply with three different lenders, you now have three of those estimates you can look at side by side between not only the rate but also the fees and that way you can facilitate that comparison and make the best choice for you."

Today, it seems that homes are going into foreclosure at an astounding rate, especially in California. If you have a problem paying your mortgage, McBride said it is important to contact your lender immediately.

"The fact is a lot of lenders are in a position that they can modify the terms (of) your loan to get you current and help you stay in your home," he said.

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