We have all heard the term predatory lending. But what is it. Predatory lending is simply loaning money to individuals under terms that make it unlikely that they could ever repay. However, the truth is all lenders and even the federal government are in on the predatory lending game. Lenders have an assortment of loan commodities targeted at a variety of consumers and almost anyone. Even the federal government is in on it backing loans for people who are “high risk” through the FHA, VA, and HUD.
In other words, they know that the people they are “helping” will probably fail and be foreclosed upon. However, home sales as we hear all the time are one of the driving factors in our economy. At the same time, foreclosures are on the rise. Not a good sign. However, with record high home sales over the past few years the market is being depleted of qualified candidates. Thus, steps are being taken to make sure that homes continue to be sold. Even when they should not be.
One of these steps is to manipulate the media into brainwashing everyone into thinking they should and must own a home. And that they can do it right now. The question of whether or not you can buy a home is not relevant. No matter who you are or what your situation, there is somebody out there that will back a mortgage loan for you. The question is do you need to buy a house, or should you.
If you are not a perfect applicant (i. e. bad credit, erratic and unverifiable earnings, and carrying debt), you have to expect to pay a somewhat higher interest rate. If you fit into any or all of these categories, you may not want to even consider buying a house. Credit is merely a reflection of how you have handled your debt in the recent past. A house is not just an investment, but it is the largest form of debt most people will ever get into. 'You are what you repeatedly do' as the saying goes. Then if you repeatedly getting behind on your debts, you are a debtor. Do not expect that buying a house is going to change that.
Of course, credit is irrelevant if you have sufficient supplies of hard cash. But truly, if you have so much money would you have bad credit in the first place. Either way, would it matter? You could just buy what you wanted with out worrying about loans. Besides that, the cost of maintaining a home can negate any benefits. This includes tax benefits.
Remember, several lenders specialize in handling borrowers with less-than-prefect credit, but you should really get to know yourself and your situation before you even consider trying.
