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Bad Credit Doesn't Mean You Can't Get a Home Mortgage
By Jonathan Haeber
CMR Columnist
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Being a young college graduate, I know how a little bad credit can go a long way. Miss a payment and it goes on your credit report; forget to pay that student loan for one month and you're branded as a bad credit culprit. Even worse, your credit report is typically only wiped clean after seven years, so that means a mistake you make in college can stay with you until you're 30!
However, a little bad credit doesn't mean you can't get a home loan--it just means you have to shop around a little more for the best home mortgage rates. Luckily, there are some new mortgage programs aimed at helping low-income or first-time homebuyers with bad credit.
Acorn Housing, a non-profit organization, can help you get home loans up to 1% below market rate--even people with less-than-perfect credit. Plus, Fannie Mae and the National Foundation for Consumer Credit are working together to offer an even wider range of mortgage options for consumers with bad credit.
The Downside to Bad Credit Home Mortgage Programs
The caveat to these programs? You need to attend counseling sessions in one of 13 metropolitan areas. In these sessions, you'll be taught the proper way to balance your monthly expenses (such as a home loan) with your income, as well as some helpful ways to prevent the pitfalls of predatory lending.
Generally, it takes a full two years of clean credit history before a bank will even consider a mortgage for bad credit borrowers. This program cuts down on the waiting time and is also a useful learning process for home budgeting.
Hopefully, with a little planning you can get a home mortgage and own your own home. Even those late payments from that shopping spree in college won't prevent you from getting your home mortgage.
Source
Bankrate: Bad Credit? No Sweat! Buy that House!
About the Author
Jonathan Haeber is a marketing writer for Discovery Channel Stores. He recently purchased his first home, and took a self-taught crash course in home mortgages.
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