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.

Excessive Interest Rates And Fees

Predatory loans require a borrower to pay excessive upfront costs or high fees. Some state laws protect consumers by putting caps on interest rates or fees. If you have bad credit, you should be paying no more than 8% higher than a conventional loan. Limits on closing costs vary, but anything more than five points should be viewed suspiciously.

Forcing Foreclosures

Another lending scam involves lending to people so they will be forced into foreclosures. These types of loans typically have monthly payments so high, you can't possibly pay them. They lure people in by promising guarantee approval or cashing out your equity, but they charge high interest rates. Before you sign a loan, be sure you can afford the monthly payments.

Demanding Title

A growing scam involves supposedly refinancing your mortgage, but in reality they scammer is pocketing your cash and title. There are many variations on this scam, but usually these con-artists will solicit those who have liens against their property or received a foreclosure notice. They make a promise of solving all your financial problems if you turn over your title and pay an up front fee.

The scammer will then file for bankruptcy in your name that will be dismissed since a third party initiated the process, but it will still leave a mark on your credit report. The scammer will also take mortgage payments from you, even though they didn’t pay off the first mortgage. In the end you may lose your house.

Protect Yourself

Protect yourself from these scams by being a savvy shopper. Request quotes from several lenders before picking one. If you have any questions, talk with the lending company. Legitimate lenders will be happy to explain the process and answer any of your questions.

Once you pick a lender, be sure you read all forms before you sign the paperwork. According to federal law, you have three days to cancel your mortgage after settlement. You will also be refunded all fees, except the application fee.

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.

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.