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The Impact of Bad Credit on Getting a Home Loan

By Gabriel Traverso
Mortgage Credit Problems Columnist


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Having bad credit does not mean you can't get a home loan. Nor does it mean you'll get "ripped off" or taken advantage of. It does, however, mean that you have to compare mortgage quotes more carefully.

Bad Credit? Mortgage Lenders Still Want to Work With You

If you have bad credit you might end up paying a few percentage points higher than someone with perfect credit. You might not be able to get 100% financing or roll your closing costs into the home loan--options some good credit borrowers have available to them--but you should still be able to find a mortgage lender to work with you.

Mortgage News: Current Events

The recent trouble in the subprime or bad credit mortgage business really boils down to impractical lending practices. As home prices rose dramatically and the excitement grew to a frenzy, many lenders wrote loans that were neither in their best interests nor the homeowners. Now the buzz is about the rising foreclosure rate. These events do not mean that you won't be able to get a home loan because you have bad credit--but you might have to provide such details as proof of income.

The Real Estate Industry Wants To Help

The National Association of Realtors is America's largest trade organization and with the strength of more than 1.3 million members is pushing hard for FHA reform to help consumers achieve the goal of home ownership. They're advocating for the needs of everyone, not just those with perfect credit.

Don't let your bad credit hold you back. It's a buyer's market out there and this is a great time to be shopping for a new home. Spend some time comparing mortgage offers and you should find that you can get the home you want despite your bad credit.

Source
NAR: Subprime Lending Policy Advocates Responsible Lending Practices

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