With good credit and the ability to make a nice down payment, you’ll have more to work with in terms of the length of the loans, and whether or not it will balloon on you. With bad credit, you will want to seek out a bad credit loan. Just because someone has bad credit doesn’t mean they are bad with finances, sometimes starting over after a bankruptcy or divorce can lead to such a situation.

Bad credit will of course not allow you all the perks of good credit though, it is likely you will need a higher down payment, or accept that your rates will balloon.

Home collected loans are smaller loans paid off in weekly installments. They can be helpful in emergency situations, or if you just need an equity loan for your own home business.

Home equity loans are based on the appraisal of your home and the current market value minus the balance you still owe on the loan, and can be useful for a death in the family, or getting something done around the home, such as a home improvement project.

First be aware that the FHA doesn’t actually loan you the money. They guarantee loans granted by private institutions and what you get is a loan from a bank backed by the FHA instead. This will lead to a lower interest rate and having to be approved for the loan because there is less risk to the bank.

This program is great for subprime lenders because the FHA doesn’t look at your FICA credit score. Instead they look only at your credit history. With a relatively good credit history for at least a year, if not more, you can simply explain any problems and still get a loan even if normally your credit score would have stopped you.

Say for instance an accident you had set you back thousands of dollars, it would most likely have a drastic effect on your credit score, yet it is considered only a black mark on your credit history. If you pay your debts on time, the FHA will still consider you a responsible lender and still grant you a loan even if other things would have kept holding you back.

If you decide to look into an FHA backed loan, check around at different banks to see if they offer the program. Compare the loans and what you will have to do to get them. There will be more paperwork to do, but they will help you with it. Also know that closing costs, interest rates and other terms will be determined by the bank and you should compare all of this to make sure you get the best deal possible.