Hopefully poor credit mortgages are a thing of the past. Many of the companies who specialized in poor credit mortgages are now out of business following the subprime mortgage meltdown. Right now everyone is outraged about the foreclosure crisis, and the fact that it was partly fueled by the poor credit mortgage lenders. However the economy will rebound and we will forget about these types of mortgages and a whole new crop of poor credit mortgage lenders peddling mortgage loans to people who have no business obtaining a mortgage will resurface.

Before we go any further, let's make sure we understand the definition of poor credit mortgages. These mortgage loans are made to people who have bad (low) credit scores. Because these kinds of credit problems suggest a financial risk, the lender will charge the individual a higher interest rate than they would charge a person with good credit. Poor credit mortgages are also referred to as subprime.

The simple truth is that some people cannot afford to own a home. When a person has a bad credit score it usually indicates they have trouble managing money or at least they have in the past. If this is truly the case, buying a home and being responsible for a mortgage is the last thing that person should do. These people should first improve their credit score and financial situation. Then they can afford the payments on a mortgage and not have to resort to a poor credit mortgage.

Today, following the subprime mortgage meltdown of 2007 and 2008, lenders are under greatly pressure to only offer home loans to individuals with a solid credit history. You will also need a higher credit score today in order to get the best interest rates on loans. So for now poor credit mortgages are a thing of the past.

If you currently have a bad credit score, you will need to improve your score through financial responsibility. In order to do this, you will need to reduce your debt levels as much as possible starting with credit card balances that have ridiculously high interest rates. You will also want to start saving money because this will help you qualify for a home loan when the time is right and provide an emergency fund for you.

In order to avoid poor credit mortgages make sure you understand how your mortgage loan works. Many of the poor credit mortgages were adjustable rate (ARM) type loans. They started with a reasonable interest rate for the first three to five years, but then they adjusted to a much higher rate because of the person's bad credit situation. Remember, individuals with a good credit score get the best interest rates and the best terms for a home mortgage.

If you have a bad credit score don't attempt to buy a house. Buying a house would just increase your debt load and set you up for certain failure. Instead, try to increase your credit score by reducing your debt, paying your bills on time and saving money. All of these actions will increase your credit score over time and you will be in much better position to apply for a home loan – and you'll get a better interest rate on the loan.