Getting a subprime mortgage in today’s economy is difficult. Over the past few years, the subprime mortgage market has had a fallout and has almost completely imploded. This means that people with less than perfect credit had a difficult time paying back their loans according to the terms. The end result is the foreclosure crisis that we are in right now with no end in sight at the time of this writing.

While this is nothing recent, just lately there has been an increase in the amount of non-paying mortgage customers. Many of these loans did not require any down payment or verification of annual income. This made it much easier for less than nominal candidates to get their hands on a subprime mortgage. While the rates were supposed to be high because they gave less than able people a chance, it backfired horribly on a grand scale. Many people have simply walked away from making their mortgage payments entirely, leading to an even bigger problem. The housing market is already in crisis and this on top of everything else has made the current subprime mortgage market just about bone dry.

These used to be over 1,000 plus of these types of lenders. But now there are just a few because most lenders have went bankrupt. There are still some subprime mortgage lenders out there but lenders overall have tightened their lending criteria significantly. You can still attain a subprime mortgage but the people eligible will have to meet a high degree of qualifications. It is definitely A LOT harder today to get a loan than in years past. Lenders require better credit scores with larger down payments or higher loan to values required.

Property values have also dropped, leading lenders to acquire less profit from their mortgage ventures. This is another reason for the increase in criteria tightening. It is harder than ever to get a mortgage in the subprime category because too many borrowers default on the mortgage within the first three months.

The best bet for borrowers with less than perfect credit to obtain financing is from the Federal Housing Administration or FHA. FHA mortgages are government insured and backed. Many lenders offer these mortgages based on specific regions that FHA details specific guidelines to qualify prospective borrowers. They will qualify you based on area income limits, loan to values and credit history.

FHA is definitely the most lenient lender of choice right now for less than perfect credit borrowers and lenders. This will probably be your best bet to get a loan.

If you are looking to get a bad credit mortgage in the current housing market, you will probably do well to contact a financial advisor of some sort before venturing out to contact lenders. They will be able to give you a much better way to go about preparing for mortgage lender requirements in today’s market.

Find a lender or mortgage broker who specializes in FHA loans. They are not easy to perform and it takes a seasoned FHA veteran to close these mortgages.

Moe Bedard
My name is Maurice "Moe" Bedard. I am the founder of America's #1 Mortgage Forum, My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.