Bad Credit or Not, Now is the Time to Buy a New Home

By Gabriel Traverso
Mortgage Credit Problems Columnist

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There are many homeowners just like you who got approved despite their bad credit, and there are plenty of mortgage lenders willing to work with you to get you into a home. Don't let your credit history stop you, because now is a great time to buy.

A Buyer's Market

The real estate market is constantly changing. Prices go up and down all the time, usually in cycles lasting several years. A few years most of the nation experienced quite a ride and saw home appreciation rise dramatically, but now that ride seems to have gone the other direction and prices are dropping. Often people ask whether prices might continue to fall and whether it would be a good idea to wait just a little longer, but if you wait too long others will start to catch on and you might find yourself having to compete with other buyers.

Why is Now the Time to Buy?

According to the Case-Shiller index, prices are dropping at the fastest rate in over a decade. In ten major real estate markets prices have fallen 4.5% in the past year and 3.9% across 20 top markets. This is a reliable indicator that if you start shopping for a home today you are likely to get a great deal on the home you really want.

Bad Credit Mortgages

Perhaps you think that because your credit is so bad you can't afford to buy a home, or that mortgage lenders won't approve you, but this isn't necessarily the case. Here are the facts, if you have bad credit:
  • You may pay more fees
  • Some lenders won't work with you
  • You are likely to pay a higher interest rate
To get approved for a bad credit mortgage you will need to shop around to find the best possible deal--each lender will evaluate your application differently. And don't be afraid to ask a motivated seller to pay some of the fees so you can secure a lower rate. You will also need to do everything you can to clean up your credit. Whatever you do, don't let your bad credit stop you from applying for a home loan today!

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