Bad Credit Home Loan

Bad Credit Home Loan - Making It Happen

The average 30 year, fixed rate, $300,000 home loan is running at about 7% APP these days - about 9% if you have bad credit.

• At first glance you'll think, " 2%? thats nothing! I can easily afford a bad credit home loan!"
• At the next glance however you'll see that 2% of $300k means an extra $6,000 a year, or $180,000 over a full 30 year term - yikes!
• But at the third and most important glance you'll see that a bad credit home loan remains a great deal.

No pain, no gain - thats the law of making money and it rings true with home financing as well.

Risks pay off with a bad credit mortgage

There are risks to taking out a bad credit home loan for this current home purchase - if you borrow too much or if your rates are too high you might wind up biting off more than you can chew. Or, following the ARM track of most bad credit home loans, you might actually succeed for the first couple years only to be struck down by a huge increase in your monthly payments when that rate adjusts. But these are worse case scenarios, and they assume you make no changes to your current financial position or your credit standing. In reality, people applying for a bad credit home loan will:

• Increase their credit scores within a few years to the point where they can refinance into a low fixed rate.
• Make major gains in income, enough to easily handle the costs of home ownership.
• Benefit off rising home prices - even if the industry slumps.

Sure, if you bought a home in 1999 you would probably have doubled your original investment by now, and you'd be sitting mighty fine on a few hundred grand regardless of your credit. But even though home prices are stagnating they are not dropping ( well, not in most areas). So while you might be paying a little more than someone with good credit, you are still going to profit off that home purchase.

Where to go if you have bad credit

Most people think that only by going to a corporate lender - taking out something like a Countrywide home loan - is the only way to get bad credit financing. Thats wrong - small, local lenders are just as adept and just as willing to provide a bad credit home loan as any national corporation, and in certain instances they can even get you a better deal with lower rates. Expand your search for bad credit financing as wide as you possibly can - and never say no to the little guy.

All material copyright © 2008 Getting Mortgages. All rights reserved.

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