If you are looking for a bad credit home mortgage, then you will want to read this article.  We will be discussing the recent changes in the landscape of bad credit mortgages and discuss what the best option going today is.  After reading this article, you should feel confident in your ability to shop for a mortgage.

Times have changed

You would have to live under a rock not to understand that the mortgage industry has faced some dramatic changes in the last few years.  Countless lenders have gone out of business and not a week goes by that you don’t hear about another bank that is in trouble.

These changes have had a dramatic impact on the subprime mortgage market.  Once a booming business, subprime mortgage companies have pretty much disappeared.  Gone are the days of financing for people with credit scores in the mid-500’s.  Mortgage professionals used to joke that if a client could fog a mirror they could find them a loan.  Now, even people with decent credit are being turned down.

FHA is the way to go

FHA loans have essentially become the new subprime loan.  Don’t get too excited though.  The underwriting criteria for these loans have shot way up too!  While at one time your credit score did not matter, you will now be required to have a minimum credit score of 620 if you should hope to qualify for an FHA loan.  New appraisal guidelines for 2010 are also making FHA loans a bit more difficult to come by.

One of the best advantages for those that do qualify is that the interest rates are very good regardless of if your score is 625 or 725.

If your score is not a 620, the best thing you can do is begin a serious credit restoration program.  With a little hard work, you can fix your credit fast!