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Qualifying for a mortgage with credit problems

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Updated: 3/27/2003 4:09 pm
It's still possible for you to qualify for a mortgage even if you have credit problems. You'll most likely, however, be subject to what's known as a 'sub prime' mortgage loan. This type of mortgage simply requires that you pay a higher interest rate than conventional loans because you're considered a higher risk by the investor due to your negative credit history. Some of the types of negative listings in your credit report that could put you in the category of sub prime loans are late payments on credit cards, late payments on car loans, collection accounts, repossessions, tax liens, and bankruptcies. Most likely, your credit situation will need to be reviewed by your mortgage broker to see what can and can't be done for you to obtain the loan. Generally, the amount of negative credit you have is usually relative to the amount of the down payment you'll need, as well as the rate of interest you'll be required to pay on the loan. Regardless of how bad your credit is, be prepared to discuss your credit problems honestly with a mortgage professional so that he or she can qualify you for the right loan that best fits your financial situation.

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