Finding a bad credit mortgage loan is this the first step to completing a purchase or a home refinance.

Bad credit mortgage loans are surprisingly available. There are loans out there for people who have unique credit situations. Lenders charge what is called risk based pricing which prices out a loan according to a borrowers credit worthiness. More often than not, a bad credit mortgage will come in the form of an FHA loan. These are loans for people with bad credit. Believe it or not, there is money to be lent despite what the media otherwise says. The key is to work with a “makes sense lender” who understands the credit challenges and the loopholes around them.

Everything is about documentation and showing how and why something happened, but more importantly, since that time, being able to show consistent payment history. Lenders always have the final say whether or not a loan will work. Your mortgage loan officer needs to be someone who understands your situation completely, even if it is a bad credit situation. Work with a loan officer who is a champion of your cause because they will find a way to make your loan work. This is the kind of individual that’s going to help you secure a bad credit mortgage. Such an individual is typically one who works for an independent mortgage bank or small size mortgage broker.

Make sure to do your homework when finding a bad credit mortgage.

Not all bad credit mortgages are the same. There are various types of bad credit mortgages the most common one being an FHA loan, but make sure you do your homework. For example Lender A’s FHA bad credit mortgage might be 5.5% and Lender B’s offer could contain a substantially lower interest rate such as 4.75% for a 30 year fixed-rate mortgage loan. Other bad credit mortgages out there are non traditional loans. These nontraditional mortgages sometimes contain prepayment penalties which put golden handcuffs on the borrower for a set period of time which are actually now prohibited on residential mortgages set forth by Truth In Lending.

Various other types of bad credit mortgages are those of private money or sometimes called hard money mortgages. These mortgage loans contain interest rates between 8 to 12% for purchases and refinances. These mortgages are also short term loans where the fixed payment is for a set period of time and then there is a balloon payment due. Be aware of private money mortgages and know the risks upfront.

Finding a bad credit mortgage depends on what the credit challenges actually are.

What previous thing happened to cause the bad credit situation in the first place? Is it a past foreclosure or a past bankruptcy? Is there high credit card balances or multiple delinquencies on a debt obligations? If yes there is good news, while you may not be able to get a mortgage right away that’s okay because sometimes it takes a little bit of time to increase the credit score.

For example if there is a previous foreclosure or short sale, we can do an FHA bad credit mortgage or refinance three years from the date of the foreclosure. Getting a mortgage post short sale or foreclosure is doable. If there is a bankruptcy we can usually do it within two years, sometimes under two years under the right circumstances. High credit card balances can be fixed by paying the credit cards down to 30% of the total allowable credit line per credit card. A good loan officer should be able to look at your credit report and explain to you what the blemishes are and how to fix them. This person can also provide a time frame for how long fixing the credit might take in order to get a mortgage.

Bad credit mortgages are available in Sonoma County, CA.

As a bad credit mortgage specialist, I help people mostly find 30 year fixed rate mortgages for unique credit situations. My average client has a 660 credit score with a couple of derogatory credit items here and there. My clients are usually successful after a consultation with me in fully understanding what it will take to secure a mortgage with bad credit. I can be contacted at 707-217-4000 or e-mail at Scott.Sheldon@nafinc.com. Find A Bad Credit Mortgage at www.SonomaCountymortgages.com.