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Bad Credit Mortgage with Low Rates


With the current economic conditions, more people than ever are struggling financially.  This may be because of a job loss, divorce or even a major illness.  These issues can sap our savings and cause us to miss payments or make late payments as we struggle to stay on top of things.  However, it is good to know even a person with poor credit can realize the dream of owning a home.  These tips are designed to help you get a bad credit mortgage: 


 1. You need to do everything you possibly can to save money.  Even an FHA loan, which has the least rigorous requirements, needs you to show at least three months of house payments in your savings account. 


2. Don't open up a new account for credit anywhere.  In fact, don't even apply for anything.  Every time you apply for credit it will show up on your credit report and can lower your credit score.  It is best not to have your credit pulled anytime in the six months preceding your loan application, whether it is for a first mortgage or for a mortgage refinance. 


3. Don't take out any new loans, open any lines of credit or co-sign on anything. 


4. Pay your bills on time, and don't pay in cash.  For instance, if you pay an individual rent, do it with a check because the bank will most likely want 12 months of cancelled checks to prove your rent payment history. 


5. Don't change jobs.  Your lender wants to see a consistent income from your current job in order to qualify you for the loan. 


6. Don't change careers.  Your job needs to be in the same industry or field for at least 2 years to prove job stability and income. 


7. Living below your means shows the lender that you won't have to spend your last penny to purchase the home and shows that you are willing to be frugal and show restraint. 


8. Work with your loan officer to determine a comfortable payment so you will know your limits when house shopping, and don't let your realtor talk you into going for a more expensive home. 


9. When you are house shopping, look for the best deal you can get. 


10. Be prepared to make a large down payment, whether it is for a bad credit mortgage for a first mortgage or for a mortgage refinancing. 


You can find loan programs that work with individuals with bad credit, but if you follow the tips laid out here, you will have an easier time qualifying for a loan.