How to Get a Mortgage With Bad Credit History

Filed in Bad Credit Mortgage on Jul.21, 2010

Your all important credit score affects several areas of your life – your ability to take out a car loan, apply for a credit card, even get a job. It can also be extremely difficult to get a mortgage loan if you have bad credit, although it is possible. With a bad credit mortgage, you will almost certainly end up with a higher interest rate and higher monthly payments.
If you have bad credit and are applying for a mortgage, it’s worth delaying the process by a year or two if practical – long enough to try to improve your credit score a little bit. In fact, your credit score is so important when it comes to a mortgage loan that most lenders will advise this strategy. If this isn’t an option, the most important thing to do is to shop around – there is help getting a mortgage with bad credit and some lenders specialize in just that.
One possible solution is to find someone with a good credit score to be a co-signer on your mortgage. The big disadvantage with this approach is that the co-signer is also then responsible for making the payments on time being a co-signer on your loan will also affect their credit score and limit their ability to take out a mortgage themselves. It’s also perhaps a good option to simply buy a less expensive house than you would like, just to keep your payments as low as possible, given that your interest rate will be higher.
There are also various programs available to help home buyers with their bad credit mortgage. Organizations such as the Federal Housing Administration, the Veterans Association and Fannie Mae can all potentially help. The good news is that it isn’t impossible to take out a mortgage with bad credit – you may just have to work harder to make it happen.

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