Bad Credit Mortgage Loans

Bad credit mortgage loans, also known as subprime mortgage loans, are a bit different from standard mortgages. Expect higher interest rates and stricter penalties due to the bad credit nature of this type of loan.

Since home ownership is intended to be a long-term move, it is well worth it and highly recommended that you take the time to remove negative items from your credit report prior to pursuing a mortgage. This wise move can very well save you huge amounts over the life of your mortgage loan – which is typically going to run you between 15 – 30 years.

Down Payment

A great way to secure lower interest rates with bad credit mortgage loans is to put down a hefty down payment (20% or more of loan amount is recommended for best results). Usually, the larger the down payment is, the lower your interest rate can be. This is a good strategy if you have the money to do it.

Mortgage Brokers

Also what you can do is seek the service of a mortgage loan broker to help you secure the best loans. Mortgage brokers usually have excellent contacts and superb negotiation skills to help you find the best mortgage deals with the lowest rates. Mortgage brokers are unusually individuals or small groups of people specializing in the mortgage industry that you are bound to naturally run into in your search. They do charge a fee for their service, but it is well worth it if they can land you better deals.

Fixed or Adjustable?

Mortgage loans come in both fixed and adjustable rates. To avoid any surprises it would be best to get a fixed steady rate rather than an ARM (Adjustable Rate Mortgage). The problem with adjustable rate mortgages is that although they can seem attractive at first glance, they can balloon out far beyond your means, which could cause you to default on your mortgage payments and ultimately lose your home.


The mortgage industry is highly competitive, therefore, bad credit mortgage loans are definitely available through the right sources. Take your time and explore your options for the rates and opportunities. Being that your credit is not the best currently, be realistic in your expectations. But also Remember: EVERYTHING is negotiable — even with bad credit.


Two very crucial things to beware of with bad credit mortgage loans are early payment penalties where you are basically penalized and charged a hefty fee if you ever want to pay off your loan early. Some subprime mortgage lenders will actually try to charge you upfront to cover this – and all the while you think your money is going toward your principle. Definitely beware of this.

Also as mentioned earlier -> watch out for that ARM (Adjustable Rate Mortgage) where your payments can balloon out suddenly far beyond your means. This is a primary reason why many unsuspecting people have gone into foreclosure and lost their homes.

We cannot stress these issues enough. These are things that are prevalent in the bad credit mortgage industry that you can possibly have removed all together or renegotiated on better terms. If you don’t understand these issues (or don’t feel confident with dealing with these details) then it is best to have a mortgage broker, legal adviser or someone else knowledgeable about the bad credit home mortgage loans to help you.

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