It is unlikely that many places will be willing to lend you money to make a home purchase if you have a history of bad credit.
While there may not be many out there, there are some.
The key to this is doing some research and knowing ahead of time what your credit score is.
There are 3 major credit agencies out there that all lenders use to determine your credit score, and what many people don't know is that you too can access them and find out even before you apply for a loan.
By simply taking a little time on the internet you can have a copy of your credit report sent to you.
Once you know your own credit score, this will help you to determine which lenders may be able to help you.
Here is a breakdown of credit scores and what your options may be.
1.
Less than 500 - The chances are not likely that you will be able to obtain a Mortgage loan at this time.
However that does not mean to give up yet.
Do some research.
Find some lenders who have a history of lending bad credit mortgages and give them a call.
Even if they can't help you at this time, they might be able to tell you how much work you need to do on your credit before they can help you.
If they have a policy of lending to people with a credit score of 500 or above, and you know that your credit score is 490, then you know how much work you need to do.
2.
500 - 600 - At this point you should be able to find a lender that will finance a bad credit mortgage for you.
The key here is to understand that a medium size down payment may be required and lenders are less likely to lend up to 100% of the property value.
3.
600 - 700 - At this point you are not doing to bad for yourself when it comes to obtaining a mortgage loan.
You will probably be able to get anywhere from 100%-125% financing based on the value of the property.
In many cases this will be even with no money down.
4.
Above 700 - If you are above a credit score of 700 then you will find everyone is willing to lend to you.
You will be able to pick and choose the best loan for you with the best rate and terms.
The three agencies that are used for credit reporting are Experian, Equifax, and TransUnion.
All of these offer information regarding your good or bad credit history and it's very important to make sure that the information that are providing to potential lenders is accurate.
The thing for you to remember is that if you have a history of bad credit then your options of lenders will shrink.
Although you may have less to choose from that doesn't mean that it's impossible.
Know your credit score going in, and that way there will be no surprises for you when you get approved or declined.
Don't be afraid to ask the lender what the minimum required Credit Score that you need to have in order for them to lend to you.
This will save you having to go through the application process more times than may be necessary.
Additional credit checks will also lower your overall Credit Score.