Bad Credit Mortgage Loans: Improving Your Chances

Bad credit mortgage loans are often the only way that a person with poor credit will qualify for a mortgage. If you do have bad credit, you can qualify for a hard money mortgage or another sub-prime product, but you need to have other compensating factors to ensure approval.

Large Down Payment

If you had credit issues in the past, a way to make the lender feel you are now credit worthy is to show you have saved a large amount of money for a down payment. A hard money lender requires 35 percent down, and other sub-prime lenders will want 20 percent or more.

Steady Employment

If you have a steady income, and have been employed in the same field and by the same employer for several years, the lender is more likely to offer you a loan.


DTI stands for debt to income and is a ratio used bby lenders to see how much of your income is absorbed by debt. Keep your debt load low, and you will have a better chance of qualifying for a mortgage. A good DTI, including your new proposed mortgage payment, would be under 40 percent.

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