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Step 1
There are certain qualifications that will have to be met in order to qualify for a bad credit mortgage loan. You will have to have stable long term income. Often, you will be required to have liquid assets as well so that they can determine a history of change. Without some guarantee of change to your credit, loan companies stand to lose a lot of money on these loans and will not want to finance them.
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Step 2
One of the best resources for finding loan brokers is the internet. There are a number of brokers who will give you quotes from multiple banks in order to find the absolute best one for you. This is a good option since banks know they are competing for your business with other banks. Just be careful not to over pay broker fees.
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Step 3
With a typical mortgage, they usually require no less than 3% of the total loan upfront. If you have 10% or more as a down payment, you are more likely to be approved for the loan. Additional upfront money can also be beneficial to purchase points. Points will allow you to lower your interest rate. In general, points will more than pay for themselves through the life of the loan.
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Step 4
Another option is to get a cosigner. Not all banks will allow cosigners on mortgages because of the term of the loan, however some do. A cosigner is agreeing to cover the loan if the primary party cannot pay the bill. This secures their investment in you. The problem with a cosigner and the reason why many banks won’t allow it is that once you are well into the term of the loan, the cosigner may want out which puts the bank and the borrower in a sticky situation with possible legal implications.
