Q: Can I get approved for a bad credit mortgage loan if I have bad credit?
A: It varies from state to state and lender to lender, but generally speaking, yes, you can obtain a loan. First, we recommend that you apply to the above Prime Lenders. Why? Because your credit may be better than you think. Many people have written thanking us for recommending the above lenders. That's really what Bad Credit Guide is all about - helping obtain a mortgages for people with bad credit. We specialize in bad credit financing of all kinds.

Q: What if the above lenders do not offer a loan to me?
A: We have at our disposal a network of Up Front Mortgage Brokers that specialize in negotiating bad credit loans of all shapes and sizes. They broker with bad credit mortgage lenders and charge a set fee for doing so. If you are interested in access to our Up Front Mortgage Brokers list and FAQs, please see more information HERE

Q: Should I choose a fixed rate or adjustable rate loan?
A: Fixed rate loans have a stated interest rate that does not change over the life of the loan, whereas the rates on adjustable rate loans are linked to an index and change as the index rate changes. Many mortgages, such as a 5-Year Fixed (30 Year), start as a fixed rate loan and then convert to an adjustable rate. Adjustable rate loans have more risk due to the possibility that the interest rate could increase. However, because you are assuming some of the risk the lender will generally reward you with a lower interest rate. These loans are best for borrowers who do not plan on keeping the loan for the full term.

Q: When does it make sense to pay points?
A: Points are a one-time fee that a borrower pays to lower the interest rate. Points are defined as a percentage of your loan amount, with one point being equal to one percent of your loan. For example, if you borrow $200,000, one point would be equal to $2,000. Paying one point will generally reduce your interest rate by approximately .25%.

Q: Should I consider an Interest-Only loan option?
A: Interest-Only loans are a good means of either increasing your home purchasing power or maximizing your flexibility to control cash flow. You can save significant amounts of cash for investment, savings, or other expenditures during the first ten years of your loan. This is also a solid strategy to maximize tax deductibility, with more funds available for paying down higher cost, nondeductible consumer debt. With these loans, the minimum payment required covers interest only-you decide how much or how little of the principal to repay each month. These loans should not be confused with negative amortization loans-with Interest-Only the principal balance NEVER increases

Q: Should I choose a loan with negative amortization?
A: Bad Credit Guide generally recommends that people stay away from these types of loans due to the high risk. Most adjustable rate mortgages (ARM) adjust the payment when the interest rate changes. However, negative amortization ARMs have a fixed payment option, even when the interest rate increases. Therefore it is possible that the total loan balance may actually grow over time.