Options for Getting a Mortgage with Bad Credit

If your credit is bad, it is only natural to worry that you won’t be able to get a mortgage. However, even with bad credit, you have options. Generally, you might have to shop around a bit more to find the right mortgage lender and might have to pay more toward your home loan. Yet, at the end of the day, if you find the right lender, you can obtain a mortgage that is appropriate for you and fits your financial needs while meeting your budget as well.

Best Overall Mortgage Lenders for Borrowers with Bad Credit

Certain lenders are available to help individuals with bad credit to find the right mortgage. The following are considered the best overall when you have a low credit score and are looking for a mortgage to buy a home:

  • Carrington Mortgage Services: Carrington Mortgage Services generally caters to new home buyers and borrowers whose credit isn’t the best. It offers loans with fixed rates for purchase and refinance mortgages, including conventional, FHA, VA and USDA loans and has a minimum credit score requirement of 550. The company is also licensed in all states in the United States except for Alaska, Massachusetts, North Dakota and Vermont. The mortgage process is fairly quick and simple and can be done online, over the phone or in person when you visit a Carrington branch in specific states. Generally, online is the best way to apply.
  • New American Funding: New American Funding offers mortgages to individuals with low income and bad credit. It seeks borrowers who don’t fit the traditional credit history mold, with many clients being minorities. The company has branches throughout the country except in Hawaii and New York and offers a number of down payment assistance and grant programs. Its minimum FICO credit score requirement for FHA and VA mortgage loans is 580. It offers loans that don’t affect your credit and uses manual underwriting to evaluate a potential borrower’s creditworthiness. Application is done online at the company’s website.


Best Online Mortgage Lenders for Bad Credit

If you are strictly looking to apply for a mortgage loan online and have bad credit, these are the companies you will want to consider:

  • Rocket Mortgage by Quicken Loans: Rocket Mortgage by Quicken Loans offers fixed rates of eight to 30 years to borrowers whose credit score is at least 620. For individuals looking to secure FHA loans, the minimum credit score requirement is 580. Generally, the company’s mortgages are more likely to be sought by younger people looking to buy a home rather than refinance their existing home.
  • G. Wentworth Home Lending: J.G. Wentworth offers a variety of mortgage products, including government-insured loans from the FHA, USDA and VA. The minimum credit score required to qualify for an FHA or VA mortgage loan is 580. There is a lender fee of $299 for most loans. The company’s mortgages with fixed rates have terms of 10, 15, 20, 25 and 30 years, giving borrowers plenty of options.


Best Refinance Mortgage Lenders for Bad Credit

If you have bad credit and are looking to refinance your home, the following are the best options to secure your mortgage:

  • Quicken Loans: Quicken Loans is the largest FHA lender in the United States and has a minimum requirement credit score of 580 for its loans.
  • ConneXus Credit Union: ConneXus Credit Union operates in 48 states and offers refinance mortgage loans to individuals with bad credit whose score is at least 600. Of course, to qualify for the mortgage, you must be a member.

These are some of the best options available if you have bad credit and want to acquire a mortgage. It’s wise to explore what each company offers so you can ultimately choose the one that’s best for your needs and financial situation.

Different Loan Options and Their Requirements

There are many reasons that people apply for a loan. You may need a loan to buy a home or car, to cover tuition or medical expenses, or simply to pay off an outstanding debt. Whatever your reason, there are a wide range of loans available and understanding the differences and requirements for approval will save you time and energy.


A mortgage falls into a closed loan. This type comes generally from a bank, a sub lender, or through the government in the form of an FHA or VA loan. Mortgages offered through a traditional bank have higher standards and requirements that you must meet in order to get an approval. They require a credit score on the high end of the 600s but mostly prefer people with a credit score that exceeds 700.  If you go through a sub lender or the government, you can qualify for a home loan with a score of 580 or more.

Home equity loan

A home equity loan is a loan available to homeowners who have equity in their home. There are two types, a straight home equity loan and a home equity line of credit. A bank issues the money from a home equity loan in a lump sum with a repayment of monthly fixed rate payments. A home equity line of credit is a revolving line of credit with a variable interest rate that you can use and then borrow again once you pay some of the balance off. If you should decide to sell your home while you have the loan, you will need to pay it off prior to your closing.

Personal loans

A personal loan issued through a traditional bank requires a source of collateral, generally a home and an excellent credit score. If you don’t own a home or have a fair or poor credit score, there are various types of other personal loans offered through online lenders where the line of credit loan requirements that are less stringent. They generally require only that you have a steady paycheck, a checking account in your name, and a social security card.

Car loans

It used to be that you could only get a car loan if you had a good credit score. Today, that’s changed. More banks realize that many people have a mark or two against them for reasons that were out of their control. You will pay a higher interest rate than if you had good credit, but if you pay the loan on time for a year or so, you can refinance it through another bank at a much lower interest rate.

Consolidated loans

A consolidated loan is for the purpose of paying off your outstanding debt and then consolidating it into one affordable payment. For many people who own a home, this provides an easy way to free up hundreds of dollars from their budget each month. There are several different types of consolidation loans available, including secured, unsecured, and a student debt consolidation loan. The secured requires the use of collateral, generally a home. Whereas, the unsecured loan bases it on several other factors including your credit score and income and, because there’s no collateral, has a higher interest rate.

Short-term loans

Most times, a short term loan is very easy to acquire. The requirements are much more lenient than that of a traditional bank. A short term loan can range from several months to several years. The downside to acquiring one of these versus a personal loan from a bank is that the interest rates are generally much higher. These type loans offer someone with mediocre to poor credit the chances to pay off debt, cover repairs and other expenses.

Before borrowing any money from a bank or another lender, make sure that you carefully calculate your budget to make sure that you have the money coming in each month to accommodate another bill. If you don’t, then taking on more debt is only going to make your situation worse.

Get Help Dealing With Debt Creditors

FastTrackDebtRelief.com, a website dedicated to linking up debtors with highly experienced, professional debt managers, is known for its tendency to make sure that a client’s qualified debt is settled, greatly reduced, and conveniently consolidated into one low monthly payment. Working with creditors can be a hassle, but lucky for you, you can hire people to work them for much better rates so you won’t have to deal with the hassle of getting yourself debt free!

For example, according to their website testimonials, they were able to settle a $2,014 debt for $604, a 65% decrease, in May 2016. A month earlier in April, one of their experts was able to lower a client’s debt from $4,092 to $614, an astonishing 85% decrease! And if you’ve gotten yourself into a bit of trouble and owe more than $10,000, fear not, as Fast Track Debt Relief’s professionals can even help you out of that situation — all the way up to $100,000.. Also in April, one of their clients saw an amazing 79% decrease of their $17,341 debt down to a mere $3,642.

Fast Track Debt Relief’s seasoned experts offer guidance through many debt relief programs that are sure to help you consolidate and pay off your commitments. According to the professionals, they key to making yourself debt free is to confront your debt directly instead of avoiding it. The best way to go about tackling your money owed head-on is to sit with an expert and formulate a knock-out game plan. Fast Track Debt Relief’s agents are trained to negotiate with creditors to make sure your debts will be settled in the quickest, fairest way possible, and remember, they strive to work for your benefit rather than the creditor’s — you are THEIR client, after all!

Debt Consolidation To Free Yourself From Slavery

You’ve probably heard someone say that the borrower is slave to the lender. If you’re currently struggling with debt, have you ever thought about how true this is? Owing money to someone is constantly in the back of your mind. Every dollar that comes in comes with a nagging reminder that it’s not really yours – that you owe it to someone else.

Every purchase you make might also set off an alarm bell, telling you that it really belongs to the person or institution who you’re in debt to.

The word slave might be a bit melodramatic, but it’s not that far from the truth. It’s a terrible feeling to be in that kind of debt to someone, so let’s talk about how to get out.

If you’re truly drowning in debt, be it credit cards, student loans, lines of credit, car loans, or some combination of all of these, being pulled in so many different directions is just as stressful as the actual amount you owe.

That’s why debt consolidation can be a good option to help deal with everything.

Debt consolidation is the process of borrowing enough money to pay back all of your debts at once. This loan is then your only debt that you’ll focus on paying down. At first it may seem like you’re just moving money around, but there are several benefits:

  • Lower monthly payment – rather than a bunch of different monthly minimum payments (which you may not even be able to afford), you’ll be able to negotiate for a single payment that works well with your income and budget. This alone can take a lot of the stress off of your debt. Of course a lower monthly payment means it will also take longer to pay off your debts. There are many calculators available to help you see what your options are. Check out http://debt.ca for some great ones.
  • Lower interest rate – some debt, such as credit card debt can carry an astonishingly high interest rate. Through debt consolidation you may be able to negotiate for an interest rate that is, on average, lower than what you were paying before.
  • Less pressure – if you’ve been getting harassed by creditors, debt consolidation will stop all of that. Debt consolidation Ontario or any other province in Canada will speak directly to your creditors and arrange payback in full. You’ll only owe one institution, and they’ll be the ones setting up your payments to make sure you don’t fall behind again.

There are some dangers to debt consolidation. If it was bad habits that got you to this point, doing what seems like clearing out your debts might lead you to make the same mistakes again. For example, if your credit card is maxed out and all of a sudden it’s cleared, you might be tempted to make more purchases with it. If you think this might happen, debt consolidation will only serve to drive you further into debt.

Compare Home Loans for Great Honeymoon Rates

While it’s most important for homebuyers to think about every aspect of their loan options, it also makes sense to compare home loans so you can take advantage of great honeymoon rates. Having a few years of fixed interest rates could help you save money for future repayments.

Comparing Honeymoon Rates

Many lenders use honeymoon rates to attract new clients. These fixed rates can last from one year to ten years. In most cases, you get the lowest honeymoon rate when you choose a small introductory period. One year will usually give you a considerably lower rate than ten years.

It’s important to compare these honeymoon rates to make sure you save as much money as possible. Interest rates can differ considerably from lender to lender. Ask the home loan companies to give you comprehensive lists of their honeymoon rates. That way, you can compare them side by side.

 Consider How Interest Rates Might Change

Having a low introductory rate can help you save money, but when you compare home loans you also need to think about how your rate will change after the honeymoon period. In some cases, you might find that higher interest rates offset the savings that you might get from the honeymoon rate. In other cases, though, you might find that you still get a good deal even after the introductory period ends.

If you expect your financial situation to change dramatically over the next five to ten years, then you could benefit from low honeymoon rates even when you know the rate will increase considerably in a few years. Honeymoon rates can make your home more affordable for one or more years while you save money and earn a higher income. When your income increases, you can afford the higher interest rate.

Before you can decide this, though, you have to compare all aspects of the loan and take an honest look at your finances.


This post was submitted by Tomorrow Finance – An Australian Mortgage Comparison Website.