Whether you are planning to purchase a home for the first time or refinance an existing mortgage, plan on comparing lending companies before you accept a financing offer if you have adverse credit history. Sub prime lenders specialize in offering loans to people who have a high-risk credit history. In return for accepting this risk, they charge higher rates and fees.

These are the Best of the Best:
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When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.

Also, make sure to include all the income you have. If you have any equity in any stocks or other financial accounts, make sure to mention that to the broker as well.

The more money you can put down on the loan, the more likely it is that you can get approved. FHA loans usually only require 3-5% down. They are also usually open to working with people with credit problems.

But not all sub prime lending companies offer competitive rates. Lenders can stack fees into the loan or charge excessively high interest rates, so it is best to compare financing offers.

Check Online

Mortgage websites offer a convenient and competitive way to gather financing quotes. Through such websites, lending companies know they are in direct competition with others, so they offer their best quote. You can also complete your loan application online once you have chosen a competitive offer.

Compare Rates

Interest rates can vary a couple of percents between lending companies. Over the lifetime of your loan that can add up to thousands of dollars. When comparing rates, make sure that you gave out the same information. Differences in loan amount, down payment, and income level affect rates.

Look At The Fees

Fees should be included in the price of the loan when you are comparing prices. Adverse credit will result in some fees, but they should not be excessive. You should expect to pay up to five points for most loans. There are always exceptions to this rule, but comparison shopping should give you an idea of what is reasonable.

Details Count

Once you have a competitive financing offer, be sure to read the terms. Some lending companies charge high fees for late or missed payments. While late fees are common, they should not be extreme. If you have any questions, contact the lending company and they will answer your questions.

Include A Down Payment

A down payment between 5% and 20% is usually required for people with a credit score less than 600. If you provided a down payment larger than the minimum, you can often get a better offer. In addition, a down payment of 20% or more will save you from the expense of PMI.

Here are our recommended sources for bad credit mortgage lenders online: See below for the Most Reputable Lenders:
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  When applying for a bad credit mortgage loan, make sure you are current on your existing credit lines. You will want your current credit to be as good as possible.