If you have bad credit, you’re going to find that it’s going be awfully hard to get anything credit related.  From an auto loan, all the way up to something big such as a mortgage.  When looking to secured a mortgage loan for a future home purchase, let me show you what steps you can take in order to get one.

#1 Work on getting 20% down:  When it comes to mortgages , money is going to speak big.  If you have the down payment, more banks are going to look at you.  If you don’t have any money, your chances are going to be fairly slim, when considering one.

#2 Work on your credit score: Again, your credit score is going to be become a huge factor.  If you don’t know your credit score, I would advise that you pick up a copy of your credit report.  By doing this, you’re going to increase your chances at a mortgage, as well as get a better interest rate.  Even if you get .5% less, this can save you potentially 1000s of dollars over the long run.

#3 Consider sub prime mortgages: You don’t have to go after a fixed rate mortgage.  While I would highly advise that you go after one like this, you may not be able to get one.  Instead, a sub prime mortgage is going to be higher in fees and your rates will change over time.  Many banks will deal with these, but because of the recent credit crunch, you may find that it’s going to be tougher to get, as they are buckling down.

#4 Work on your net worth: The mortgage process is a long one.  It can take as long as 30-60 days just to get approved.  You have to go through underwriting and everything else.  This one kind of goes along with the first point.  You will want to work on your 20% down, as well as your net worth.  If you have lots of debt, and no savings, you’re going to kiss your chances of landing a loan goodbye.

Overall, I can’t give you a magic formula to find a lender with bad credit.  What you’re going to want to do is work on the steps above.  Meet with either a mortgage broker, or even a lender to see what they can do for you.