As a former member of the BC club (bad credit) I speak with too much experience. During the younger years of my being, with children and debts growing hand in hand, I was up to my eyebrows in financial problems. It culminated when I sold our house to buy another one that had more room for the children and my nerves, and we couldn't get a loan until three weeks after the old house had sold and closed (I wasn't in the business at that time). Have you ever spent three weeks in a hotel with three teenagers? Something had to give, and it was my resistance to cleaning up the mess that had started with the Savings and Loan debacle in the mid 80’s, which shut down my development business. I had lived with the thought that things will turn and all would be better. It didn't happen until I took massive action to make it happen.
When I tell you that your credit problems can disappear, I am speaking with experience and not reading you a line from a book. When I say that you can start answering the phone at night, I am speaking with the knowledge that all the threats in the world didn't turn me around – three normal teenagers and a fierce determination to end the nightmare did.
When I speak about sacrifices, I am not talking about giving up eating; I am talking about giving up the old ways and going in a different direction.
If you own a house the solution is much easier. If you don't, then start thinking about getting one and making your life easier. Lease a house with an option to buy it. After one year of lease payments made on time, you can get a loan using the equity that was created, if any, during the time you were leasing as your down payment. This will make the purchase easier. You should be able to create some equity just based on the fact that the seller doesn't have to pay a real estate commission and can give you that savings.
Why is it important to own a house? In this country, housing generally goes higher year after year based on higher building costs, limited land availability and inflation. Some areas obviously are better than others, but in the long run they are all good. The increase in the equity in your house means your balance sheet will become more balanced. Your asset side, which includes the equity in your house, will grow to meet the liability side and help you get even quicker. You can use the equity in your house at any time to start getting out of debt, and although many will write and say how foolish that is, they obviously haven't lived with credit problems.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.