If you have terrible credit and are in need of a lender to finance your mortgage you do have options. Sub prime lenders have specifically marketed to borrowers with terrible credit and offer purchase and refinance mortgages to terrible credit borrowers. Although almost all bad credit lenders require at least a credit score of 500 to qualify for a loan.

Fha loans are great for first time home buyers. While the current credit crunch has pushed many would be buyers out of homes, FHA does not have a minimum credit score requirement. Whether your score is a 525 or a 500 you qualify for 97% financing with a 6% sellers concession.

You can do an FHA refi on up to a 4 unit property with no pricing adjustments. The property must be owner-occupied and FHA loan limit’s apply, although the loan limit’s increase with each unit in a property. Contact a mortgage professional for FHA loan limit’s in your area.

Lenders usually look more favorably on borrowers with no credit than those with below average credit. Borrowers with no credit are usually offered rates compared to borrowers with good credit. However, they must prove they are responsible through what is called alternative credit grading. Lenders will grade your credit based upon accounts usually not found on a traditional credit report.

Some sources of alternative credit can be a cell phone, cable bill, utilities, and insurance. Basically, anything that you have a monthly payment can be used as alternative credit. Once you have a 12 month history for these accounts your mortgage broker will created a supplemental credit report through the three credit repositories showing that these payments have been on time for 12 months.

The federal housing authorities insured loan programs offer many benefit’s to consumers looking to refinance their homes. Although most people think of first time home buyers when they hear about FHA loan programs, FHA loans can be a great loan programs for refinancing as well. The next few paragraphs will review many of the ways an FHA refinance can help you.

When using alternative credit to help establish payment history, you will need at least two or three accounts to show your ability and willingness to pay. You will also need statements and canceled checks for this.

Even if you have no credit score because you have never had any credit, there are mortgage programs designed for you.

One way to qualify for a mortgage with little or no credit history is to provide a sizable down payment. A down payment of 5% to 10% of the purchase price will often qualify you for a mortgage. Be sure to ask you preferred mortgage professional if a larger down payment will help you qualify for a home loan.

Many times being a first time home buyer and having limited credit you are still able to qualify for a home loan. Some lenders will allow you to use alternative credit in order to qualify in these cases. Alternative credit would be using letters from utility companies, phone companies, cell phone providers, non credit reporting loans, renters (verification of rent form, vor’s), etc these can generally be used to show a positive credit history and as an alternative credit option for 1st time home-buyers with a limited credit history.