Owning your home is a dream and aspiration may people wish to try and achieve, although given the significant amounts of money involved, this can be a rather awkward task for many homeowners hindered by poor credit ratings. So common misconception is that if a person has a bad credit rating, then they will not be able to get a home loan, this is not quite true, because there are a number of loans specifically designed for people with poor credit scores. Just like with EBay, whereby users have feedback in their account to provide users with a reference as to their reliability, the credit score helps provide lenders a snapshot of your history, and spending habits.

Sub-prime mortgage crisis in the US is getting worse. Still, the situation of many who can't afford to service their mortgage loans will increase in the next two years. Why? Because it's inevitable that the lenders will increase their variable interest rate.

If your loan is $200,000 an increase of just .25% will add $500 per year to your interest repayment. For some borrowers living on a fixed income, this may just tip them over the edge, and result in a default. Bad credit is the inevitable effect.

We all know how quickly the number of foreclosures grows in the USA housing market. It's not just proverbial Cleveland or the states of the South East. The oncoming year 2008 will bring huge increases in mortgage loans defaults across whole America. Why? Because big banks who have underwritten those loans, have to settle outstanding deposits and borrowings.

Yes, the situation will get much worse for the average American, with long-term credit worthiness implications. In other words, those wwho were positioned as poor credit risk, will drop down to the much worse status: bad credit. This will reduce their borrowing ability, just when they need it most; trying to refinance their loans, and just get some kind of a bridging finance.