| A lot of people worry about whether or not their | | | | Take a very close look at your current debt situation. |
| credit is good enough to get a home loan. What | | | | Are your credit cards maxed out? Are you late on |
| many people do not realize is that there are very | | | | any payments? Is your job history up to credit |
| few individuals who have perfect credit. Also, many | | | | standards? |
| people do not realize that "bad credit" is a vague, | | | | Any problem that you can fix should be fixed before |
| subjective term that can mean one thing one year | | | | you approach a lender. If you are behind in your |
| and a completely different thing the next year. In | | | | payments, get caught up on them before you |
| other words, what constitutes bad credit is always | | | | attempt to get a home loan. A lender will wonder |
| changing. | | | | how you intend to pay for a home loan if you cannot |
| More often than not what constitutes bad credit (or | | | | pay the bills you have now. Resolve as many of your |
| credit that is not good enough to meet the | | | | financial issues as possible and then seek your lender. |
| requirements of a home loan) is dictated by the | | | | You may discover that your credit really is bad or at |
| housing market lenders and the general housing | | | | least not good enough to get a traditional loan. When |
| market itself. In other words, in a tight market a | | | | this happens you have fewer choices and options. |
| borrower would need a better credit history and | | | | The most common option is to get a sub-prime loan. |
| score than he or she would need in a loose market | | | | A sub-prime loan is a home loan that is drafted for |
| when lenders are making more loans based on lower | | | | people with credit or income problems. These loans |
| credit worthiness issues. With this being the case the | | | | usually carry a much higher interest rate than |
| best place to begin is to see how bad your credit | | | | traditional fixed rate or ARM loans. The sub-prime |
| really is. | | | | market is a market into itself and you need to be |
| By law you are entitled to one copy of your credit | | | | very careful before entering into a loan of this nature. |
| report from each of the three main reporting | | | | Even a sub-prime loan will be difficult if you do not |
| agencies per year. You should get a copy from each | | | | first resolve any current debt or credit problems. If |
| and look at each one carefully. If you see mistakes | | | | you find yourself overwhelmed, you may want to |
| or if you see omissions, you should ask for | | | | look into talking with a debt repair agency. These |
| corrections to be made. | | | | companies can help you get back on track with your |
| Once you have a good idea of where you stand in | | | | debt and with your payments (if you are late on |
| your credit history you begin looking at your current | | | | payments). In the long run, they can help repair your |
| situation. There are some things that can make or | | | | credit perhaps faster than you might be able to do |
| break a home loan besides the credit history. | | | | yourself. |