Getting a home loan is a nerve wracking and difficult time.

However getting a home loan is not always easy and this is particularly true if it is a bad credit home loan.

First and foremost you should look around for bad credit home loans.

Bad Credit Home Loan Applications

It was designed to increase home ownership, and reduce the required down payment. FHA today is used for first time home buyer, credit challenge borrowers, and borrowers with no credit scores.

FHA does have credit guidelines, but they do not look at credit scores. Bankruptcy, FHA does allow borrowers who have filled for bankruptcy.

Qualifying for an FHA mortgage is simple. FHA really has no set credit guidelines and allows for exceptions with documented extenuating circumstances. If you have no credit this ok as well, but you will need to provide your loan officer with nontraditional credit, acceptable nontraditional credit references include the following utility bills, phone cell or land line, cable, and auto insurance. FHA does require a down payment of three and half (3.5) percent, conventional mortgages require at least five (5) percent down with minimum credit scores of 640.

FHA has very competitive rates. Mortgage rates change daily, but on most days FHA has the same rates as conventional loans, so FHA borrowers are getting the same rate on a thirty year fixed mortgage as someone with excellent credit. FHA also has lower mortgage insurance premiums than conventional loans. Conventional mortgage insurance is based off credit score and loan to value. Rates start at fifty basis points (.0005) of the loan with excellent credit, and goes has high as two points (.02) percent.