To offset the poor credit lenders require a higher intrest rate than on a conforming loans.

There are loan programs available specifically for borrowers with poor credit, but there are often extreme limitations that may keep the borrower from being able to qualify. For example, with a 475 fico score, you may be able to qualify for a loan, but only for 70% of the value of the home. This would mean that you would have to come up with a 30% down payment if you are purchasing the home. For most borrowers, this would prevent them from being able to buy the home.

Poor Credit Loans are available to consumers that fit into a fico score bracket starting as low as 475. Lenders view mortgage history and consumer credit as a part of the approval process for most poor credit loan situations. LTV or (Loan to Value) is also a factor in the approval process of a poor credit loan. Lending institutions limit the LTV to a 70% quailfying percentage, your appraised value or equity position in your home determines the LTV. Good mortgage history, consumer credit, and LTV are the 3 keys in the loan process which will help you qualify for a refinance or purchase of home.

Lenders charge more points and higher interest rates to those with poor credit. Loans to borrowers with poor credit carry far more risk and lenders deserve compensation for this risk. Borrowers with good credit should not let themselves enter into a loan agreement where they pay points and rates based on a bad credit loan. One national company recently filed bankruptcy to protect themselves from litigation on fraudulent loan practices.

Lenders make a clear distinction between Poor Credit profile and No Credit profile. No Credit merely means the borrower has not had a history of using credit. A person with Poor Credit/Bad Credit profile has demonstrated a pattern of mishandling credit.

Home Loan for People with Bad Credit - Lenders nationwide have several loan programs available that allow people with bad credit to qualify for a home loan.

It is a myth that people with a bad credit score cannot qualify for a home loan. Many people with blemish credit history have bought homes, as long as there are other compensating qualifications.

Depending on the situation and exact circumstances involved, borrowers with a previous bankruptcy or late payments on other debts can often qualify with rates the same or close to those offered to borrowers with perfect credit.

Mortgage Brokers have access to subprime and niche lenders that often have loans programs that are targeted to borrowers with bad or poor credit.

Borrowers that are 1 day of bankruptcy, 1 day out of foreclosure, mulitple collection accounts, and recent late payments are a few of the profiles that fit within these niche programs.

Remember bad credit does not disqualify you from getting a home loan. Having bad credit does not mean that you have to continue to rent or live with relatives, with the loan programs available today even you can own your own home.