Even if you have a less than perfect credit rating, it is possible for you to get a mortgage. This type of mortgage is called a bad credit mortgage. Unfortunately not everyone has the best credit history or score, but there are companies out there to allow you to get a mortgage even if your credit is poor. Here are 3 basic things you should know about a bad credit mortgage. This will help you to understand and make a better decision.

1. A bad credit mortgage usually have a much higher interest rate. Since, your history has a record of slow or late payments, the rate is higher, so they do not lose money if you happen to default. These rates can vary drastically between companies, so make sure you do your homework before signing the dotted line. Paying your bad credit mortgage on time and in full will actually help to get your credit score back on track.

2. Always look for hidden fees and penalties. Most bad credit mortgages have higher late payment fees as well as fees if you pay off or refinance too soon. These fees can be rather expensive, so make sure you know what you are agreeing to in terms of contract. Check around to see which company has a bad credit mortgage that is right for your budget.

3. Expect to place a large down payment for your bad credit mortgage. Traditional mortgages expect anywhere from 0-20% of the total in a down payment. However, those with poor credit usually need a minimum of 20% as a down payment to secure a bad credit mortgage. Always check around to see which company will give you a bad credit mortgage with the lowest down payment possible.

Before you consider a bad credit mortgage, make sure you pull your credit score to verify all information is correct. Often times, information that is incorrect or misprinted could be negatively affecting your credit score. Getting your credit score is simple and could help save you money in the long run. Always try to make your payments on time and in full to enable you to get the best mortgage possible. However, if that is not an option you are always able to get a bad credit mortgage.