For as couple years people were buying homes with bad credit and nothing down. These loans were packaged and resold to investors with a profit and this business boomed. Then defaults and losses caused billions in losses and these loans vanished. Bad credit Houston mortgage loans are no longer available with no down payment.

It is still possible to get a mortgage if you have bad credit, but it now requires a down payment. This can range from 5% down with small credit problems to 30% or more down with major credit difficulties. The alternative to a big down payment is to repair and rebuild your credit.

There is a misconception about credit repair that you can pay someone a huge amount of money and get a great credit rating overnight. In reality the basic thing done by repair companies is to dispute negative information on your file to try and get it removed. This may result in some improvement and you can do it yourself for the cost of a few stamps.

If you want to get a home but your credit is not good here are some suggestions:

• Find a loan officer or mortgage broker to review your credit. Some will do this free of charge. You may be qualified for some mortgage program.

• If your credit and cash available is not sufficient ask for a plan of what you would need to do to get a good mortgage. Some loan officers will do this for free.

• Get a free copy of all three of your credit reports from annualcreditreport.com.

• Follow the information on the free reports to dispute whatever negative, incorrect, or obsolete information you would like to dispute.

• Are there any small collection or charge-off accounts on your file? If so call them and ask if they will DELETE the negative report if you pay them.

• If you have a really bad file you may want to consider a credit repair company but check them out carefully and be wary of any that ask for big money!

• Keep your monthly payments on time and be careful not to overdraw your bank account.

• See if there are any grant or down payment assistance programs available, loan officers and realtors are a good source for this information. Your income usually needs to be low or moderate to qualify for these.

• Save up as much down payment money as you can. If necessary a relative may be able to contribute funds.

• Ask your advisor if you need to add good credit, and how to do that if necessary.

• Don't give up hope! Home ownership is the American dream and a key path to wealth. Almost everyone with enough income can qualify for a mortgage. It may take some time and effort but it is worth it!

Texas residents can get more information at my Texas bad credit mortgage page. Or call my Houston office at 281-537-7800.