Having bad credit is frustrating because you can’t repair it without getting new credit or playing the seven year waiting game so things will drop off your report, which is fine if you don’t need credit, but horrible if you need a loan to buy something, such as a house.

Though home loans for bad credit do exist, post-mortgage crisis, at least in the United States, they are becoming increasingly difficult to acquire, mostly because banks and lending institutions are still a little skittish.

The best place to start is by sitting down with your bank, in person if you can, and going over your credit report line by line. They’ll be blunt and tell you what you’ll need to do in order to have a chance at making it through the approval process. Though this can be intimidating, and even quite depressing, it’s going to help you find places where you can make a quick fix to help you better your chances.

From here, you can start your search, starting with the most familiar names, and moving into other “speciality” finance companies as prospects start to dwindle.

If you’re an armed forces veteran, then you have a bit better chance of getting a home loan, even with bad credit, as a VA loan will at least guarantee a portion of the mortgage value. However, you’ll still need decent credit to get approved.

Another way to better your chances is to save up a sizable down payment, at least 20%, which you can use to increase the amount of equity you’ll have. If you can get a good deal on a house, and walk in with at least 25-40% equity, then a bank will have a much greater chance of considering the risk and giving you a loan.

Obviously, we’re talking large amounts of money here, so this isn’t an option for everyone.

The most important thing to watch when getting home loans for bad credit is the interest rate. It’s absolutely not worth buying if you pay more than 10% interest, and to be fair, even 6% is high these days. If that’s your only option, then I recommend that you keep renting, keep working on the credit, and try again when you can get a rate below 10%. On a loan of 100k, every single percentage point makes a big difference in both monthly payment, and total loan cost.