Bad credit mortgage loans are available to people with poor credit.  This article contains an interview with a bad credit mortgage loan expert.  If you find yourself in a situation where you have the option of losing your home or refinancing, but you have bad credit, then you should continue reading.  By the end of this article you should be well on your way to a better understanding of obtaining a mortgage loan for people with bad credit. We have interviewed Gerri White, a mortgage loan expert to help answer some common questions:

LDC: Thank you for speaking with me today.  I know there are a lot of people out there that are concerned about the interest rates they are paying on their homes and want to refinance but believe they cannot due to bad credit.

GW: Not a problem.  I am happy to talk about bad credit mortgage loans.  It is important to let people out there know that they have options.

LDC: What is a bad credit home mortgage loan?

GW: Well, a bad credit mortgage loan is a loan that is granted to a person who wishes to buy a home or refinance their existing home loan for various reasons.

LDC: What are some of the reasons that people wish to obtain a bad credit loan?

GW: The first and foremost reason someone wants a bad credit loans is because they wish to purchase something, be it a home or auto, but they have bad credit.  Many people assume that if their credit is poor then they will never be approved for any loan and that is simply not true.  To tell you the truth, lenders love people with credit scores from 580-619 because they can charge them the higher interest rates for the riskier loan.

LDC: So if you obtain a bad credit loan you can expect to pay higher interest rates?

GW:  Yes.  Simply put, you are seen as a risk to the lender so in order to make it worth their while, they are going to charge you higher interest rates.  But, if you really need a home or a car, then many people have no other choice but to deal with the high interest rates and higher monthly payments.

LDC: Doesn’t it stand to reason that people with bad credit already have a hard time paying their monthly payments and wouldn’t be able to afford a high interest payment?

GW: There are many different reasons that people have bad credit.  Some people are in a situation where they had some financial burdens that overwhelmed them at one point, but they are not on track to a better credit history, but that just hasn’t caught up with them yet.  In the meantime, while they wait for their credit score to rise, they find themselves in need of purchasing something new.  These people can handle the payment and for now decide to do so knowing that in the future they can refinance for a lower rate.

LDC: What is your advice for people looking into a bad credit mortgage refinance loan?

GW: My advice would be to wait until you can improve your credit history before considering refinancing with a bad credit refinance.  You can improve your credit in as little as four to six months by making your monthly payments on time an fixing any errors on your credit report.

LDC: Thank you Gerri for the information you provided us with today regarding bad credit mortgage loans, I am sure many people appreciate it.  This should help a lot of people understand what is possible and the steps they need to take in order to obtain one.