Why It’s Better To Rent When You Have Bad Credit
Are you thinking about buying or even refinancing your home with bad credit? If so you may want to think twice before you do it, in fact you may not even want to own a home all together if you have terrible credit. In this post I’m going point out a few reasons why you shouldn’t buy or own a home if you have bad credit and why renting would be better.
Why You Shouldn’t Buy A Home
First off, when you’re considering the purchase of a home especially with bad credit it makes it hard to win against the banks. For example, let’s say you have a terrible credit score and a bit more debt than you would like. To convince a banker would be tough considering the guidelines they have to follow. If you decided to rent an apartment you wouldn’t have to convince a banker, just the landlord.
Second, you also have to consider the interest rate you would end up with if you bought a home. With bad credit your interest rate will defiantly be higher than those with good or excellent credit. If you rented an apartment you wouldn’t have to jump through all the hoops that a lender will want you to do. They also won’t jack up your payment because you have bad credit. The apartment you rent is based on the value of the building and area you live not your credit score.
Finally, having bad credit may cause you to buy a home in a neighborhood that is less than par. This will make it hard to sell the home if you decide to move to better place down the road. Buying in a neighborhood with poor schools and a high crime rate will be much harder sell. If you would rent you could stay in the apartment until you got your credit built back up.
In Closing…
Consider the strong points I’ve made and look into both options to see which will be less expensive for you. Being stuck in a house you don’t like because you have bad credit will only make it harder for you sell and move on. In the end renting makes logical sense because you will save more money and make it much easier for you to boost up your credit at the same time.
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