A down payment of more than 20%, on a home that is valued at below market average values, is one way to be approved for a bad credit mortgage. It means that there is lots of equity in the home. The lender knows that if you default on the mortgage, they will be able to sell the home and get their money back with relatively low risk.
Bad credit mortgages for home purchases may also attract higher interest rate mortgages. They reflect the risk that the lender feels that they are taking when they lend money to you. They may also assign mortgage insurance fees and other fees to the cost of the mortgage approval process. Lenders really do not want to be stuck with any costs at all.
For more bad credit home loan details, click here.
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