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Bad Credit Mortgage FAQs

Except for in the rarest of circumstances, buying a house is almost always an event worth getting excited about. Whether you are buying a home for the first time or whether you have owned many homes before, the prospect of having your own place in a new neighborhood can be a lot of fun.

What is not as much fun, on the other hand, is shopping for a house loan when you have a bad credit score. Having a FICO score under 550 - or even one under 600 - can make it difficult to qualify for a house loan.

If you are interested in successfully applying for bad credit house loans, here are the answers to 5 frequently asked questions:

1. Mortgage acceptance hinges on income, down payment, credit score and choice of lender:

It is important that you have a firm understanding of the four main factors upon which your acceptance or rejection for a house loan hinge: your income level, the amount of down payment you can come up with, your credit score, and your choice of lender. You probably have less potential to influence your income level immediately in the short term, but you can influence the other three factors to your advantage.

2. You can increase your chances of acceptance by improving your credit score:

If your credit score is below 650 or 600, you have fair to poor credit. This can negatively influence your chances of loan acceptance. The fastest way to improve your credit score is to fix any outstanding errors in your credit report. Run your 4 major credit reports (TransUnion, Experian, Equifax, and Innovis) and read through each one, making notes of misreported items, errors, or any signs of identity fraud. Report what you find to those companies: your score should go up almost immediately.

3. Try to scrape together a reasonable down payment of 20% or more:

It may not be easy to quickly increase your income, but you may be surprised at how easily you can get money together for a down payment if you are motivated to do so. Having more to put down on your house will increase your chances of loan acceptance and reduce your payments by getting you a better interest rate. To raise the money, consider borrowing from family, taking a one-time loan from your retirement account, or selling a few assets.

4. Seek out bad credit house loan lenders:

This is key: choose only to work with lenders who specialize in handling bad credit borrowers. Do a bit of online research and put together a list of at least 5-6 lenders who say they are "bad credit house loan lenders" or "bad credit mortgage lenders."

5. Allow the offers you receive to play off of each other:

Now, begin to apply to each lender. As the offers start rolling in, make sure that you play the lenders off of each other. Your confidence in negotiating will increase with Lender B if you already have an offer from Lender A. Do not be afraid to negotiate for the best rate.

Consider these answers to 5 frequently asked questions about bad credit house loans. Get access to more bad credit house loans tips and lending resources at: Bad Credit House Loans.