Bad Credit Mortgage FAQs
credit can be overcome. You may still be able to qualify for a mortgage refinance or a home loan if you have bad
credit. Here is a list of 10 Frequently Asked Questions about a bad credit mortgage.
1. Can I be approved for a home loan if I have bad credit?
Yes, if you meet other
compensating factors, which include job stability
2. What constitutes a bad credit score?
A score below 620 will
keep you from qualifying for a conventional Fannie Mae, Freddie Mac, FHA or VA loans. Even with a score of 620
or higher, you may not qualify if you have excessive 30-day late payments within the last 24 months reporting on
your credit report.
3. What is the waiting period after a foreclosure?
If you have had a foreclosure, you will need to
What is the waiting period if I filed for
There is a waiting
period of three years from the time the bankruptcy is discharged until you can qualify for a new
Will my interest rate be
The Interest rate for a
bad credit mortgage is higher than a conventional or government-insured loan. Right now, even bad credit
interest rates are lower than they were 10 years ago.
have late payments on my mortgage; can I still refinance?
Late payments are not
reflected on your credit report until they are at least 30 days late. Even if you have a 30-day late
payment on your credit, you may still qualify for a mortgage refinance or home loan. Lenders will look at
other compensating factors to determine overall credit worthiness, such as cash reserves, time on job, income,
7. What type of documentation will I need to
The type of
documentation required varies. Be prepared to provide government-issued photo id, social security card, at least
two months of bank statements, income verification (such as Y-T-D paystubs). If your income doesn’t come
from w-2 employment, two years signed tax returns with 1099s attached may be required.
Will I need a down
loans require a down payment. The down payment requirements for a bad credit mortgage are higher than
What if I’m upside-down on my current
If you owe more on your
current mortgage than what your house is worth, you won’t be able to refinance. You may qualify for a loan
modification to reduce your mortgage payment.
What constitutes a bad credit
Bad credit history is when you have repeatedly missed loan payments for a period of