Having a blemish on your credit report can lead people to believe that it will be impossible for them to obtain a mortgage or refinance the mortgage on your current home.

Although having less than perfect credit can be a challenge, all hope is not lost.

There are mortgage lenders out there, and many of them, specialize in doing mortgages for customers with challenged credit. These lenders are known as sub prime lenders.

You may not be familiar with sub prime lenders because they are not the type of institution to set up shop on every street corner like the banks. They are known as wholesale lenders.

Sub prime lenders deal with all kinds of special and unique situations. Whatever your financial situation may be, there is a good chance that there is a lender out there with a mortgage program for you.

For instance, sub prime lenders have mortgage programs for people with poor payment history, people who have had bankruptcies, people who are in foreclosure and are looking to be bought out, etc. Over all, if your credit history is not the best, you will most likely have to go with a sub prime lender.

My suggestion to you would be to find a mortgage broker to shop around for the best possible mortgage program for you.

A broker is not a lender, their job is to guide and educate you through the loan process. Most brokers have a contact list too literally hundreds of mortgage lenders across the United States including sub prime lenders. Allow for the broker to assess your financial situation, than fit you into a mortgage program that you both can agree on.

The down side to dealing with a sub prime lender is the interest rate. You can count on it being high. If you have bad credit, the lender will see you as a high risk customer, and the penalty you pay for being considered a risk is in the interest rate.

The point is this, regardless of your credit issues, there most likely is a mortgage lender out there who will deal with you, just make sure the deal you agree on is in your best interest and not in the best interest of the broker or the lender.

When deciding to purchase a home or refinance your existing one, always do your homework. Continue to educate yourself so you know what to expect moving forward. And don’t be afraid to shop around for the best deal out there. Just because your credit isn’t in the greatest shape does not mean lenders won’t be competing for your business, because they will.

Your credit can be repaired over time if you pay all of your bills on time, so make this a goal and start working toward it.