If you have bad credit and want to obtain a mortgage to buy a new home, you may feel as though it's impossible since lenders tightened their eligibility rules. There are plenty of so-called “options” available on the Internet for bad credit loans, but you must be very careful to watch out for scams.

Mortgage laws have changed in recent years but, the following general guidelines apply:

• Your credit report must have fewer than two 30-day-late payments in the past two years. 

• Bankruptcies must be at least two years ago, with excellent credit history since then.

• Foreclosures must be at least three years ago, with excellent credit history since then.

If you have a few minor negative marks on your credit, you might be better off simply waiting a few months for those to clear (while continuing to make all your payments on time, of course). Alternatively, you may ask a creditor to remove a single late payment flag from your report—though it's up to the creditor to do it.

If you've had serious financial trouble, you'll need to shop for a mortgage loan from several lenders. Don't assume you're actually prequalified for a mortgage just because you filled out an online form and received several offers. You'll need to follow through with the process of applying for a mortgage with each lender to make sure the offers are real.

It's best if you talk to a loan officer in person and get your questions answered on the spot. Even if the first bank you talk to won't give you a mortgage because you have bad credit, the loan officer can help you understand what needs to be done in order to secure a mortgage.

It's not impossible to get a mortgage with bad credit, but it is more difficult. Work with several potential lenders and don't settle for the first approval. Even though you have bad credit, there are several places in the process where you can negotiate a better deal. Give us a call and we can put you in touch with a mortgage professional that can give you all of your options.

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