Crisis? What Crisis?

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As I write this there is a crisis in America in the
sub-prime lending industry.

A sub-prime loan happens when homebuyers with low credit
ratings are offered mortgages with high interest rates.

Advocates of sub-prime financing tout it as a way
for low-income residents to own their first home.
This crisis clearly shows sub-prime loans are
having the opposite effect.

Well knock me over with a feather.

You mean to tell me that low-income people with bad
credit and poor money habits are having a hard time
keeping up with the payments on a high interest mortgage
and the myriad expenses of home ownership?

That's crazy! I don't believe it. ;>)

As the kids today say, "well, duh".

Truth be told, I haven't really thought much about the so-called
crisis.

I consider one of my jobs, educating people about the pitfalls
of homeownership and debt.

If you need a subprime mortgage to get into a house, you have
no business trying to buy that house. Your American dream can
quickly turn into an American nightmare.

If you have a low income and bad credit you should have
ONE goal in life...ok...TWO goals...well, now that I think
about it, THREE goals...earn more money, learn good money
management skills and improve your credit.

Get yourself to the library and get some books on making
extra money. Invest what little money you have in
making some extra money and learning how to manage
that effectively.

The old "I'm building equity argument" is a crock.
Low-income earners buying their first home with
sub-prime loans are not buying houses that go up
in value.

They have no money for upkeep or to make
improvements so the value of the house goes
DOWN.

So, if you've been thinking about getting a sub-prime
loan, FORGET. Spend your time and money
educating yourself so you can make more money and
manage it well.

Also, check out how the American dream has worked out
for others like you in a previous post on this blog...

http://ownyourpaycheck.blogspot.com/2006/06/should-we-buy-house.html

Be sure to read the comments at the end!

Thanks for reading.

Leo