Here’s a subject that we can really sink our teeth into: bad credit mortgages. Some people are all about them, while others think that they are one of the worst things to come around for UK homeowners. The truth is a little bit of both, actually. Let’s get something out of the way here: we don’t think that mortgages are bad, we don’t think loans are bad, and we certainly don’t think that financing in general is bad. It is a neutral tool that you need to use in order to get where you want to go. It’s really that simple. Some people make it into being something that it isn’t, and that’s a real shame. There’s no reason for all of that. You just need to think about what you’re ultimately trying to do and go from there. You just have to look at the bigger picture from all of this. The reality is that there are going to be people that have bad credit mortgages to offer you. Before you take them, you have to ask yourself if this is really the best time to get the mortgage.
If you’re enjoying your flat at the moment, there’s not a deep need to jump into the buyer’s market when you’re not ready. Sure, you might be able to afford the higher mortgage now, but is that really a good idea? Is that really a smart choice? Is that really something that you really think will move you forward? If it isn’t, then it isn’t. There’s no reason to push yourself into something that you can’t handle, and you have to also realize and remember that there’s a time and a place for everything. Pushing too hard when you’re not ready to be a homeowner is partially why we have so many people struggling to keep their homes. No, that’s not a judgment call or anything like that. It’s simply facts. Many people tried to jump into the property game before they were ready and found that it’s a lot harder than it looks to maintain a home. Things will break on you. Your insurance costs will be much higher as a homeowner than when you were just a renter. You won’t have the landlord to call when something breaks. You will have to find the best person for the job and hope that everything will work itself out. That can be a tall order when you already have the stress of everyday life on your shoulders.
There is a space for everything in the financial market. We can’t say that bad credit mortgages are evil, because then some really great people wouldn’t get the chance to own their own home. We’re saying that if you can, avoiding them until you can get your credit issues fixed is a good thing. It just depends on what you’re up to. If you’re finding that your financial issues are behind you and you can start fresh, then a bad credit mortgage is a step up. But if you’re still in the middle of financial hell, going with a BCM is not a good idea. There’s no reason to take on more debt when you’re already drowning in it. It just sets the stage for a big crash, and that’s exactly what the mortgage lender will want to avoid.
The higher interest rate is justified, even though that’s not what we want to hear as consumers. The truth is that people do tend to default based on their financial problems. If you’re in the middle of financial trouble, it feels like everything is massive and in the way. That’s not a feeling that you want to have forever if you can help it. It makes a lot more sense to actually take a deep breath and do what serves you, leaving behind the things that don’t.
Is it really that straightforward? Absolutely. Think about why you want to buy a home. Is it a rush because other people around you have homes? If so, that’s a really bad reason to get a home. Get a home because you’re ready for the extra responsibility. Trying to jump into it just so you have an “investment” is not a good idea at all. The more that you can plan, the better off you will honestly be.