Q: I’ve been trying to buy a house but I don’t qualify for a loan.

My credit isn’t very good and I don’t have any savings. I talked to one loan guy who said he could get me a loan with no money down but he didn’t like my credit score. Do you know of any loan people who can give loans to someone with a really low credit score?

A: After all of the news about sub prime loan failures across the country and bank failures among those lenders who gave such loans, I would think you might realize that banks don’t want to take on high risk clients and you’re a high risk. No reputable lender will give you a loan at this point.

You should begin working to improve your credit score and start to save some money. Even loans with no money down, and there still are such loans, will require you to pay some costs at closing.

I recommend credit counseling. There are several places where you can get free credit counseling and that can start you on the road to financial recovery. Those counselors can also help you find ways to make better decisions concerning how you spend your money so that you can get on the road to homeownership.

Part of the issue for you, it seems to me, is the problem of delayed gratification. As long as you buy every new gadget that you see and think you want, you will never accumulate savings. As long as you fail to make payments on time, you will never improve your credit score.

If you really want a home of your own you have to resist instant gratification and learn to wait, and save, for something you want more. Also keep in mind that owning a home brings with it other expenses over and above your mortgage payment such as taxes, insurance, repairs, and maintenance. Best of luck!

Q: My husband is bugging me to refinance the house to get a lower interest rate and to pull out some cash for a few things we need.

Our washing machine is sort of on its last legs, my car is getting old, and we want to join some friends on a vacation to China. I’ve been reading the news about all of the problems with the economy and I’m not sure this is a good idea. What do you think?

A: This is an excellent time to refinance. Rates are very low and if you can afford slightly higher payments you could get even better rates with a 15 year mortgage. What I would be very careful about is taking out cash.

Because there are so many unknowns in the economy, this doesn’t seem like a great time to buy “toys” and gadgets. You can get along with an older car, with a washer that is still working but not the latest model, and maybe take a vacation closer to home.

According to recent statistics and studies, the Puget Sound region, and Vashon in particular, have escaped the extreme downturn in the real estate market we are seeing elsewhere. However, no one can predict the future. This would be a good time to pay down debt, not incur more.

It’s always tempting to use the equity in your home to purchase things you think you need. This is what I have seen as a problem in the few foreclosures we’ve experienced on Vashon. These were not folks who had sub-prime loans; they were folks who simply kept borrowing more and more on their home until they had borrowed more than the house was worth.

A job change, divorce, family illness, or any number of things can change your life quickly. Some of those folks had to sell their house to deal with their life changes and lost money. Many also lost their credit rating. I think I’ll agree with the experts that this is a good time to stick to a modest financial plan and save.