You want to get a mortgage loan but you have bad credit. For people in this subprime situation, it has become harder than ever to obtain a loan, but it's not impossible. Here are several important things you should know.

Available Cash

The process of applying for a bad credit mortgage is not unlike any other mortgage application. The lender will want to look over your credit report, your employment history, your income, and the amount of debt you are carrying. Lenders will also look closely at available cash. This is where things can change in your favor. If your credit rating is low, you will typically need to have much more available cash to compensate. A steady income notwithstanding, if you have cash reserves, you will be able to put down a higher down payment, sometimes as high as 20 percent or 25 percent. If, for example, you are considering a $200,000 house and put down 25 percent, or $50,000, you pose much less risk to the lender. Because you have so much invested in the property, it is much less likely that you will default on the loan.