Bad Credit History? How Financing and Buying a Home Can Help You Improve Your Financial Situation

Financing and buying a home can help improve your financial situations, especially if you have a bad credit history. Adding a mortgage payment to your monthly expenses seems like a mistake if you are having financial difficulties, but in the long run a mortgage can save you money on your living expenses.

Raise Your Credit Score

Regular payments made on a loan-term loan, such as a mortgage, are weighted more heavily by financial institutions that regular credit card payments. Within three years of regular payments, you can raise your poor credit rating to good and qualify for lower interest rates on all your loans.

So while you will probably have to finance your mortgage with a sub prime lender if you have poor credit, you can expect to refinance your loan for better rates in about three years.

Investment For The Future

Paying rent is simply making someone else richer. For the same amount you are paying on rent, you can be making a house payment and investing in your future. You will be building equity through your monthly payments and rising real estate prices.

Your home's equity is a financial safety net that you can tap into for future emergencies. With its interest written off on your taxes, this line of credit is better than using a credit card. You can also use the equity as part of a retirement plan by down-sizing your home in the future.

Reduce Future Living Expenses

Unlike rent, your mortgage payment won't fluctuate, unless you opt for an adjustable rate mortgage. So while your paycheck will increase with each pay raise, your mortgage payment will be taking a smaller chunk of your paycheck. And once your mortgage is paid off, then you will really see a reduction in your living expenses.

Create Wealth

If you are really ambitious, you can also create wealth through purchasing and renovating a house. Often times a little bit of sweat-equity can have big payoffs. You can then sell the house and purchase another house to renovate. This hard-work process is best for those willing to put a lot of time and effort into a project.

To view our list of recommended bad credit mortgage lenders online, visit this page: Recommended Bad Credit Mortgage Lenders Online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

I want to refinance my mortgage, but the value of my house has fallen
St. Louis Post-Dispatch,  United States - 7 hours ago
I really want to refinance my mortgage, which I got about three years ago, but I think my house price has declined. What can I do? ...

Single mom should refinance her mortgage
Globe and Mail, Canada - Jul 5, 2008
She also has a $114000 mortgage. Finally, she expects an $82000 repayment of a personal loan that is due to her in a year. Karen should make as much of her ...

THE DEBT ADVISER: Ignored debt grows and damages many parts of ...
Quad City Times, IA - 12 hours ago
Second, your mortgage-refinance issue is just the tip of the iceberg. Many people don’t know that a negative credit history will also hurt you if you have ...

CNBC
UPDATE 1-US mortgage refinance applications plunge -MBA
Reuters - Jun 18, 2008
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity fell 8.7 percent to 508.4 in the week ended June 13. ...
US MBA's Mortgage Applications Index Fell 8.8% Last Week Bloomberg
Mortgage applications down 8.7% last week: MBA MarketWatch
Mortgage Applications Drop as Rates Rise, Refis Dry Up Housing Wire
BloggingStocks - WFMJall 61 news articles

Flashback to birth of the mortgage disaster
Sydney Morning Herald, Australia - 2 hours ago
If interest rates fell, there was a big chance that mortgage holders on which the bond was based would refinance on lower rates. For the owner of the bond, ...

New York Times
Mortgage Brokers as Naysayers
New York Times, United States - 18 hours ago
During the recent real estate bubble, some borrowers who chose loans with skyrocketing interest rates emerged unscathed because they were able to refinance ...

With the loan bar higher, the rules are different now
MiamiHerald.com, FL - 9 hours ago
Homeowners who currently have an adjustable mortgage can refinance into a fixed-rate mortgage so they don't have to worry about rising mortgage costs after ...

Arizona rate increases to peak in July
Arizona Republic, AZ - 11 hours ago
Most borrowers awaiting initial loan resets have accrued no equity because of plummeting land values, making it virtually impossible to refinance. ...

The credit crunch keeps rolling on
Arizona Republic, AZ - 11 hours ago
Nearly a year into the credit crunch, the mortgage and housing markets remain confusing and difficult to navigate for many consumers. ...

Arizona law now requires loan officers to be licensed
Arizona Republic, AZ - 11 hours ago
He supposedly persuaded homeowners to refinance their homes through his business and then invest most of that money into the real-estate market through him. ...

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