Bad credit home loans, advantages and disadvantages.
If you are considering applying for some form of bad credit home loan, it is worth looking first at the positives and negatives. Looking at a standard
bad credit home mortgage you should consider the following:
-Interest rates are much higher than any kind of standard mortgage. This is almost like a â€˜safety netâ€™ for the banks, so that if you fail to reach a
repayment, they take so much more money in interest that they can afford to wait a bit longer.
-Black listing. This happens to everyone, even on a standard mortgage loan. It involves a â€˜black spotâ€™ appearing on your credit checks for if you
fail to pay and have your home repossessed. It can take a number of long years for this mark to disappear or be overlooked, and even then it can still
make your life just that little bit harder.
-Hidden costs. There can, in some cases, be hidden costs added to your bad credit home mortgage. This seems almost like a punishment for a bad
credit score, but nevertheless these fees do have to be paid and they are 100% legal.
Now letâ€™s look at the good things:
-You own your house. Nothing can take that away from you, unless you do not meet the repayment schedule of course. You gain some extra
monetary security knowing that your house could build equity, despite the fact it was purchased using a bad credit home mortgage.
Thatâ€™s about it. As you can see, the disadvantages greatly outweigh the advantages. During the past twenty or so years a scheme has been
developed to help people that are looking to buy property, but do not want to apply for bad credit home loans. It is called the residential property
acquisition program. The advantages of buying a house using this facility are:
-You do not need the involvement of any banks. The properties are purchased by outside investors. You will still need to follow a strict repayment plan,
but the money is paid to an individual that will pay the appropriate fees directly to the broker.
-The house is owned by a trust, meaning i