If you have bad credit and need a refinance or want a new home loan, your best friend may be a mortgage broker. Mortgage brokers have access to a wider variety of mortgage programs and are better able to help a less than perfect borrower find the right loan. While working for a mortgage broker, I would sometimes send out a loan application package to over twenty lenders before I found one that would approve my borrower. If I had worked for a direct lender or bank I would only have had a few programs to offer and would not have been able to help some of these clients.

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Mortgage brokers: On the endangered species list?

Unfortunately, many brokers are leaving the business. This isn't all bad; some are getting out because of new regulations that won't let convicted felons sell mortgages (yay!), and some have not been able to pass their newly-required standard licensing exams. But others are leaving because the contraction in mortgage lending has made it difficult for smaller lenders to stay in business, and because government-imposed net worth requirements mean only larger outfits will survive.

This will affect people with bad credit more than people with good credit

Good credit mortgages practically underwrite themselves. They are processed electronically through automatic underwriting systems. When you have good credit, you can go to whatever lender offers the lowest rate and get instant approval and close quickly. When you have bad credit, service is more important, and a good broker can make sure that you don't pay any more for your bad credit mortgage than necessary.

When shopping for a bad credit mortgage, contact at least one mortgage broker. That person may give you access to a lot of programs that you won't otherwise get.