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Bad Credit Mortgage?

I don't have terrible credit, but it's not spotless. We've been late on two credit card payments (my husband didn't get paid for two months). If we want to buy a house in 1-2 years, will that be enough to keep us from getting a mortgage? How bad does your credit have to be to have to get a "bad credit mortgage"?

One or two years from now, one missed payment on a couple cards won't send you into 20% interest rates. We are also assuming those cards prior to the missed payment was up to date and you don't miss any payment for the next year or two. These can be explained that your husband didn't get paid from work. What that explination will send up red flags if you looked for a mortgage now. Missing one payment on a couple cards after not getting paid for two months will point out to the lender that you do not have sufficient savings to cover a bump in the road. They will see this on the mortgage application anyway. Most reputable agencies will ask or require you have a 6-month savings buffer. After what happened to you, they may insist on it and refuse your application until you have sufficient savings. They are just protecting themselves from you defaulting on the mortgage and foreclosure.

Even if your score comes in really low, as long as your front and back ratios come in good, the bad credit score will just disqualify you from prime lenders and the lowest interest rates. You would, however, qualify for sub-prime lenders which may not carry PMI charges, but will charge a few points higher. You may still qualify for a piggy back loan which is your mortgage is partially funded by a prime lender and a sub-prime lender. Piggy backs may eliminate PMI but part of your sub-prime loan will still come at a higher interest rate.

Your number one problem isn't the missed payments, your number one problem is your lack of savings. Save enough for you two to live on for 6 months with no income and then everything above that, use that for a down payment. Even if in two years that "extra" savings doesn't equal a 20% down payment, you'll still qualify for a large number and various types of loans if your credit score and ratios are good enough. Source(s): BSBA Fianance, Certified Level 1 H&R Block Personal Income Tax preparation, studying for Certified Finanical Planner's license, fomer mortgage broker

This is easy to answer through a few articles I wrote on this subject. There are multiple opportunities for people with bad credit but you can also improve the scores within a week with a bit of guidance.

Here is some additional info. Hope this helps.
What rating does your credit score have?
http://www.tomvoli.com/2006/11/14/what-r...

Rescore Your Credit Profile in 1 Week!
http://www.tomvoli.com/2006/11/06/rescor...

It is easy to clean your own credit report
http://www.tomvoli.com/2006/12/06/it-is-...
Being late twice is still pretty good credit. It would have you above 700.
if your credit score is 560 or higher u will get a laon for house
If it was only two credit card payments you shouldn't have a problem with a mortgage especially if you've made on time payments the rest of the time. It usually only gets reported to the credit agencies if you were more that 30 days late. You may or may not be asked you explain them.