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Bad Credit Mortgage Loans

If you have less than average credit, even bad credit, then purchasing a home may seem out of the question for you. However, even people with less than stellar credit scores are finding out that they not only qualify for a mortgage, but are preparing to make a move into their new homes right now. Let's take a look at how a bad credit mortgage loan can work for you.

When it comes to lending money to consumers there is one big factor of determination used by mortgage lenders: risk. The higher the perceived risk, the less likely you will be able to receive a loan; lenders want to receive a reasonable amount of assurance that you will pay off your debt. If your credit reports are chock full of problems your risk level skyrockets and your chance of receiving loan approval drops accordingly.

A lender may still be interested in lending money to you if upon review of your credit report that certain easily repairable factors play in:

Your credit could be in tatters do to a recent divorce. Perhaps many of your late payments are in fact the responsibility of your ex-spouse. Amend these problems and your credit picture could improve.

Errors on your credit report are dragging down your score. Someone with the same name as you but a different social security number has been playing fast and loose with his own credit. Unfortunately, someone at Experian - the credit reporting agency - doesn't know this and has tagged your credit report by mistake. Correct the problem and your credit picture should clear.

Your income has increased significantly. Perhaps you hit a bump in the road a few years back and lost your job. The loss of income was devastating and bills piled up. Today, you are not only working but you are paying your bills on time. Your credit report may not yet reflect the change in your current financial outlook.

Even if you still have bad credit a bad credit mortgage may still be offered to you. With a bad credit mortgage you'll pay more per month for a higher rate mortgage and the lender could require that you put an additional amount of money down in order to swing your bad credit mortgage loan.

Regardless of the reasons for your current credit standing a bad credit mortgage loan could still enable you to get into a new home if a willing lender can be found.