A lot of people with bad credit want to know if they will ever be able to get a mortgage to buy a home. The answer is yes. Of course, it won't be smooth sailing. You will have to pay a higher interest rate than bowers with A+ credit because you are considered a riskier borrower. Plus, you may be required to pay a pre-payment penalty which means a payment of large amounts of interest in the initial months of the borrowing. Once this large sum is paid, they can pay the normal interest rates.
The time period to make this huge payment in the form of pre-payment penalty may range from six months to as long as three years. This arrangement is of immense help to the mortgage debtors as it helps them tide over the rough seas until they arrive at a safe landing. During this period, the borrowers can improve their credit and finances as well as set up fresh and better credit ratings. When this is achieved, the borrowers would have returned to the normal mortgage payment rates which come at a lower rate of interest.
The bad credit mortgage offers a variety of advantages to its takers. In a general sense, the loans help them pursue their dream of home ownership which would have been impossible without a mortgage. However, as with any other loans, the bad credit mortgage system also has some pitfalls. The rates of interest are higher than that of the normal loan rates. Besides, the pre-penalty payment is a huge burden from the perspective of the borrowers. The mortgage broker who helps them get the loans will normally charge a fee, which only adds to the misery. Be sure you fully understand all the pros and cons of any mortgage you enter into because you may be stuck with it for the next 30 years.