Bad credit mortgages are much harder to get now than they were a few years ago. Loose lending practices contributed to the foreclosure crisis, and banks and lenders have taken heed and tightened up their belts. Sometimes it is even hard for people with good credit to get approved for a mortgage now.
However, if you have bad credit, there is no need to despair. There are still bad credit remortgage and bad credit mortgage options available. You just have to look a lot harder to find them, and you may be rejected several times before you find the right lender. However, there are some things you can do to help improve your odds of finding a bad credit mortgage lender who will approve your loan.
First of all, work on that credit. Lenders like to see that you are trying to improve. Do what you can to remove the negatives by disputing them, and start paying your bills on time as much as possible. Your credit score won’t jump to 700 overnight, but it might just improve enough to push a lender toward saying “yes” instead of “no.”
Second, instead of applying to one lender after another, find a good mortgage broker and stick with him until he finds something for you. Mortgage brokers work with many different lenders, so they have a much better chance of finding you financing than if you just randomly apply to different lenders. A mortgage broker will know which lenders you have the best chance of being approved by and help you get that approval. Make sure you do what your mortgage broker tells you to do in order to become qualified. This will help you get approved so you can buy your home faster.
Last but not least, try to come up with a good-sized down payment before applying for a bad credit mortgage. You need something positive to counter the negative credit report, and a large down payment will go a long way toward getting you approved for a mortgage, even if your credit needs a lot of work.