There is no doubt that having a bad credit history or a bankruptcy on your record can greatly affect your ability to get a mortgage, and the down payment and interest rate requirements of that mortgage loan. With some shopping around, however, it is possible for even the most credit challenged among us to live the American dream with a home of their own.

The effect a bankruptcy has on your credit varies according to how long ago the bankruptcy was discharged. For instance, a bankruptcy which was discharged less than one year ago means that the borrower will qualify for a D loan. These D loans generally require a down payment of 30%, and high interest rates as well.

Those who can wait a year after the bankruptcy filing to apply for a mortgage can qualify for a B or C loan instead. These loans feature lower down payment and interest rate requirements than the D loan.

Regardless of your bankruptcy status, any mortgage lender will want to see a reliable payment history, including payments on rent, loans and credit cards. Those lenders who have sufficient cash reserves, generally enough for six to twelve months, are generally considered a lower credit risk and may therefore qualify for lower interest rates and down payment requirements.

It is important to shop around for a quality sub-prime lenders, since not all lenders are the same. Some lenders may be able to qualify you for a B loan, while others will require you to take out a C loan. The only way to be sure what type of loan you qualify for is to shop around and request quotes from several different lenders.

These days home buyers have a number of choices, including applying over the phone or online. Most online sites will be able to provide a fairly accurate quote based on the information provided by the potential borrower. In addition there are a number of free mortgage broker sites where potential borrowers can obtain quotes from several different lenders.