Bad Credit Mortgage Loans: Do Your Homework First!

By Karen Lawson
Mortgage Credit Problems Columnist

Having bad credit means putting in extra effort if you want a mortgage loan with reasonable terms. The key to succeeding in getting a bad credit mortgage loan (and the key to your new home!) involves seeking out opportunities available for those without sterling credit and looking for the right bad credit lenders.

Four Things That Can Help You Get a Bad Credit Mortgage

• Seller Incentive: It's probably true that almost anyone can get a mortgage if they're willing to pay the price, but don't go there. It's a buyer's market in many areas. Anxious sellers may pay buyer's costs, and home builders may offer cash incentives or other buyer assistance programs.
• Community Redevelopment / Home Buyer Programs: These programs are sponsored by cities and counties that work with real estate professionals and lenders to help first time buyers.They may lend you enough for a down payment and closing costs, which can help you avoid higher costs associated with no or low down payment bad credit mortgage loans.
• Managing Your Money: Overcoming bad credit requires sound financial management. Pay off credit card debt, and avoid incurring large debts such as car loans. Saving is important. Arrange for direct deposits to savings every month.
• Comparing Bad Credit Lenders: You probably wont find the best loan offer in the first place you look. If you want to find a mortgage with bad credit at the best rates available to you, you should continue to compare lenders and see what's available. Lenders' thresholds for acceptable credit scores depend on many different factors and can change over time.

It can take time to find the home you want and the mortgage loan you need - especially with poor credit; don't give up!

About the Author
Karen Lawson is a freelance writer with extensive background in mortgage banking. She holds BA and MA degrees in English from the University of Nevada, Reno.

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