How to Get Preapproved for a Home Loan With Bad Credit in Phoenix, AZ

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Getting approved for a bad-credit mortgage in Phoenix is possible, but will take some work to find the right lender for you and your situation. Consider working with a Phoenix mortgage broker or a mortgage company. A broker works on your behalf with several lenders to find you an approval at the best rate, while a mortgage company only seeks an approval through its own programs. You may have to try several companies before you find an approval or a deal you can afford.

Research online for Phoenix mortgage brokers or mortgage companies, whichever you prefer to work with. Read the online information to determine if they work with customers with poor credit scores.

Check into any special homeowner services the city of Phoenix is offering. There may be specific deals for those with less than perfect credit, down payment assistance or improvement money available. Many of these programs require you to buy a home in specific locations and live there for a specified number of years, typically three to five years. Some programs require you to attend home purchasing classes as well. See the city of Phoenix website at linked in the Resources section.

Arrange appointments with either the brokers or mortgage companies that work with bad credit in the Phoenix area. Ask the percentage of bad-credit loans they get approved as well as costs and timeline. Determine who you want to handle your mortgage application and mortgage process; you want someone familiar with the Phoenix real estate market.

Obtain a copy of your credit report. Your mortgage broker can give you a copy or you can get one yourself at Look it over carefully to ensure that what is reported is accurate. Write a brief statement of explanation for any negative items. This will help your lender understand your poor credit history.

Organize the documents that you will need for your application. You will need to prove your income by providing pay stubs and bank statements. Provide all of the information quickly to your lender or mortgage company. Bad-credit mortgages are approved through sub-prime lenders, so the paperwork is sometimes more than otherwise is required.

Prepare to contribute a significant down payment as part of the approval process. A sub-prime lender can often reduce your interest rate if you can offer a significant down payment. A down payment is required on any loan with bad credit.