It's obvious that getting a traditional home mortgage from a bank is going to be harder than ever at this point, but that does not mean that you are without other options. There still are ways to find a home loan when your credit has potholes that make you look risky in the eyes of a lender. You just need to search out different options from companies that will give you a chance.
One option may be to find a homeowner willing to finance their home themselves, or give you a rent-to-own deal. Since we are in the midst of a foreclosure crisis there are many homeowners looking for a way to prevent foreclosure on their home. If you can give them enough money up-front to catch up their mortgage payments immediately, they may allow you to rent-to-own or take over their payments until you have paid off the home. This is most likely to work out if you know the homeowner to begin with, but it is possible to find those you don't know who are open to an arrangement like this.
There is another option for someone who can get a mortgage loan through conventional means, but due to poor credit, simply cannot get one big enough to cover a decent home. Many homeowners trying to save their home from foreclosure will agree to a short sell, which is where they sell the home to you before foreclosure proceedings are complete, for what is owed on the house. This value will usually be much less than the actual value of the home, but the homeowner saves their credit from the hard hit of foreclosure and you get more house for your money.
There may be ways to reduce the risk that a lender sees when they consider you for a mortgage loan. The first step is to deal with credit cards to create unused credit on your report. You do this by not using your card anymore, just stop immediately. Start paying off the lowest balances, but do not shut down the card. You want to pay off as much of your running balance as possible and leave the accounts open, so that your credit report shows unused credit that is available to you. This looks good from the lender's perspective.
If there are any medical or utility bills holding you down, pay them off as much as possible. Paying off the debt and living on your actual income can be challenging and may take a little time, but it can lead to the mortgage loan you want in the long run so may be worth it. Anything you can do to lower the risk stamped on your credit history, needs to be started immediately.
Financing bad credit loans may be harder today than it was just a year ago, but it is not impossible you put in the hard work and look at the options that are still available.
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