You know yourself to be a terrific person, but you just happen to have a huge problem- a very bad credit record. Your bills are past due, the mortgage payment is staring you in the face and you absolutely have to find a way out. Don’t despair! We want you to understand that you are not the only one in this situation. We hope that this short article will assist you to find your way out of your dilema. If you are a home owner, there are mortgage loans available for those with bad credit. But you must be very aware of the pitfalls and be ready to research the various options.

Before you start, the first thing you should do is find out your exact credit score. It is also important to know where to look for your credit score. So to make things easier, we’ll tell you that the simplest way is to go online and see it. Now that you have your score, let’s explain something about it. If you have no credit at all, that gives you a score of 0, which is a long way from the top which is 850. To the readers who have opened a credit card account or some other account, your score stands to be somewhere within the realm of 350 to 850.

Numbers are numbers, right, but there is one number that those seeking mortgage loans must be aware of and that is 620. You are in trouble if your score is 620 or less. If your credit score is at this low point (or even less) you will find that now your credit status is very different than before. Most lenders will now consider you as a high risk and will frown at giving you a loan. When you are classified as a credit risk you will be rejected for most of the easily available loans and therefore you will have to start searching for bad credit loans.

But you still have some openings to help in your distress. Because of the current trend in the housing market, lenders are trying their best to accommodate even those with bad credit so these people can get loans, too. Now these mortgages which some call sub-prime are available to those in distress, but be cognizant of the fact that your risk (if this is a secured loan) has now been increased while the lender’s risk has diminished. So, once again, be very careful as you plod through all the paperwork regarding a mortgage loan for bad credit and do not let yourself be led into any situation you may regret later on.

It is also important that before you meet with the lender you have understood everything and are fully prepared for what lies ahead. Having a low credit score unquestionably means that your interest rate has to be higher, that much is obvious. At this point, it is wise to understand why you are in this financial situation to begin with, in order to avoid repeating the trend.

Before signing anything, remember that there will be other factors involved in the process. Undoubtedly you will find other costs being added on as you begin signing papers, such as pre-payment penalties. For example, if you have a credit score around 520, you would most certainly have to agree to an adjustable rate mortgage, and a down payment of at least 30%. Think about how much your monthly payment will be, and whether or not you can realistically afford it when you tally all your other monthly expenses together. Don’t dismiss any figures since you will have to end up paying them all, like it or not.

Because you do have bad credit, when you are in the market for mortgage loans you have to remember that beggars can’t be choosers - but that doesn’t mean you are at the lender’s mercy. All of this has been said to encourage families mired down in bad credit to position themselves to move out and up into financial security.

We hope this has helped you understand that there is hope for you, however bad your credit has been, even if it means previous bankrupcy. Use all the resources you have available, starting with the Internet, and do your homework thoroughly so that you will be prepared to face the lenders with as much knowledge as you can muster to obtain a better deal for you.