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When you have a bad credit history and attempt to get a mortgage most conforming lenders will decline you almost instantly. Since the conforming lenders have the good low interest rates but will not approve you its time to explore other options. If you are a home owner that has a bad credit history and are looking to refinance your home you may be wondering what your options are. You should be aware that there are mortgage programs options available for borrowers with low credit scores, late mortgage payments and other situations that cause bad credit so getting a mortgage won't be a huge challenge. The challenge however is using the right programs to get a good bad credit mortgage. Any good mortgage broker will tell you that FHA and Fannie Mae are your best options for a good interest rate, however not everyone will qualify. The main consideration for FHA is the last 12 months of mortgage payments had to have been paid on time with no 30 day lates. Debt to income ratios are also required to be under 41% too. Fannie Mae on the other hand will require a minimum score of 620 because MI companies are no longer insuring mortgage of borrowers below this score. In addition, most FHA lenders have also increased their minimum score to 580. Another obstacle for getting a good bad credit mortgage can be the number of trade lines on your credit report. So don't be afraid to re-establish your credit this will help you in the long run as long as you make your payments on time. If for some reason you cannot qualify for an FHA mortgage you can still get a good bad credit mortgage rate from a sub prime mortgage lender. Sub prime mortgages will be a higher interest rate and a good mortgage broker who specializes in bad credit mortgages should be able to explain to you the many different sub prime programs that you may qualify for and help you make the best choice. If you go the sub prime route be prepared for slightly higher closing costs too. This is mainly because FHA only allows certain fees can be charged thus things that are normally charged can not be when you go that route. You can still get a good bad credit mortgage rate by talking to a good qualified Mortgage broker who offers both FHA and Sub Prime you will come out on top! To apply for a bad credit mortgage click here now
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