Applying for a bad credit mortgage? If your credit
score is not too good, and you are trying to to get a mortgage loan
approved, then there are a couple things you should keep in mind.

First
of all, keep in mind that the interest rate that will be extended to
you will be somewhat high.  That is because of your credit score. The
higher your credit score, the lower will be your rate of borrowing from
lenders.  Conversely, the lower your credit score, the higher will be
your rate of borrowing.  This is because lenders regard borrowers with
low credit scores as high risk borrowers.

Secondly, because of
your position of having a less than perfect credit score, sub-prime
mortgage lenders may try to take advantage of this.  You see, if your
credit was perfect, they you would have a considerable amount of say in
how much the lending rate of your mortgage should be. If your credit
was perfect, then you\'d be the ideal customer for mortgage lenders, and
they\'d be all after you.  You can wheel and deal in this scenario.  Not
so with bad credit mortgage.

So before you decide on a mortgage lender of broker, there are few precautions you should take:

Find
out if there is a pre-payment penalty on the mortgage.  This is a
charge the lender imposes when you repay the mortgage before a certain
period of time elapses. You are in effect being \"penalized\" for paying
off your mortgage early.  In many instances, the penalty is such that
it may discourage you from paying off early. If there is a pre-payment
penalty, then it should be set out in the truth-in-lending statement.
Knowing this is important because you will want to work yourself into a
position where you can refinance the outstanding balance on your
mortgage to get a lower rate of interest.  If you are familiar with the
amortization schedule for mortgage loans, then you will understand that
even one half of a percent can make a big difference in the total
amount of interest you pay.  So your game plan when applying for a bad
credit mortgage should be to pay it diligently, while you rebuild your
credit. When your credit is sufficiently high, then you can refinance
at a lower rate of interest. So you definitely do not want to be tied
into a mortgage for bad credit.

Even though you may not have as
wide a selection of lenders to choose from because of your credit, you
can still shop around.  You can still try to find the mortgage with the
most economical rate and that will work best for you.  Do not make the
mistake of allowing the mortgage lenders or brokers to use your credit
disadvantage to imprison you.

Make sure that you are comfortable
with the monthly payments. You credit is already less than desirable. 
You certainly do not want to make it worse. Too many people make the
mistake when applying for a bad credit mortgage, of being short-sited. 
The simply fail to look into the future and consider that they will not
want to remain with a high payment mortgage.  They are so overwhelmed
with the approval, that they do not really consider whether they can
comfortably meet their monthly commitment to the mortgage company.  The
end result is that because they experience problems repaying the
mortgage - maybe due to late payment or missed payment, they end up
being stuck with a high payment mortgage.