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Trying To Buy A Home With Bad Credit
by John M. Roberts

Today, many lenders will not loan to people who have good credit, let alone those with bad. Because of the mortgage meltdown and the downturn in the housing market of 2008, lenders have become very conservative in their lending practices.

Unlike the liberal spending practices that were prevalent during the 1990s and early to mid 2000s when money for home loans flowed freely from banks, mortgage companies, and other lenders, the resources have dried up. During those years, it was thought that the economy would continue to grow and expand with no end in sight, but eventually, the housing market collapsed and many people were forced into bankruptcy and/or foreclosure.

Many banks, savings and loans, and mortgage companies, with encouragement from the federal government, stopped policing themselves and made bad loans to borrowers, many who had no real means of repaying their loans. Properties became over inflated to the point where they were no longer affordable for people who wanted to buy them, so many people were allowed to buy homes and were given loans without credit checks or employment verification.

Now we are all paying the consequences. The lending pool has dried up and government bailouts are needed just to keep the economy from total collapse.

So what can I do if I have bad credit and I want to buy a home?

  • What you should do is be patient and try to pay off as much of your bad credit as possible.
  • Make a solid, reasonable plan for yourself, and stick to it. Don't set goals that you can't possibly meet.
  • Get into a matching funds savings plan at work (401k or 403b or other savings vehicle) and save as much money as you can.
  • Talk to a realtor and a loan officer. Although banks and mortgage companies are reluctant to loan right now, there is no harm in talking to a loan representative. They can tell you what you need to do to clear up any derogatory credit you have and help you put together a plan that will help you get credit worthy.

Today, many lenders, loan officers, mortgage representatives, and realtors, are struggling financially just like you are, so no lender, or realtor is going to be too busy that he or she won't take the time to work with you. If one loan officer, or realtor, won't take the time to help you, there are thousands who need your business, so it won't be to hard to find one who will.

With the country heading into what looks like a serious recession, property values are most certain to continue going down so you will have the time to improve your credit rating and maybe still get a good price on a home in the future.

If you make your plan and then work your plan, you should be out of your financial crunch in no time at all.

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