The figures involved are in the hundreds of thousands, and the time required to repay the debt is decades rather than years.
Little wonder those applicants seeking home loans with bad credit usually have a difficult time getting their applications approved.
But despite the negative impact that poor credit ratings can have on applications, there is actually no reason why securing mortgage approval, even with poor credit scores, should be ruled out.
It is, after all, a matter of the current financial situation being strong enough to meet repayment obligations, rather than past financial situations.
But surely, a mortgage provider is unwise to invest such large sums in individuals who have previously failed to honor a loan agreement.
Well, with the right boxes ticked, and the correct preparation done, there is little reason for a lender to reject a home loan application.
The simple truth is that every applicant has the means to improve the strength of their application, making the chances of approval much higher than they might seem.
Here are some of the key pointers that every applicant should keep in mind.
Bad Credit Is No Big Deal Really Lenders have long been busy convincing the public that having a poor credit rating is one of the worst things to happen in life - but this is not true.
Bad credit scores can be overcome, so much so it is even possible to get a home loan with bad credit.
The truth is that a low credit score has little impact on any loan approval procedure.
Of far more interest to a mortgage provider is whether the applicant has a good and secure job, and if the amount of debt they already have is too high or not.
So, securing mortgage approval is not out of the question, but where the score does have influence is the interest rate that may be charged.
This, obviously, can affect the affordability of the home loan, but it would be inaccurate to say it is strong enough to get the thumbs down.
Even with high interest rates, if there is sufficient excess income, approval is still possible.
Seek More Manageable Terms Of course, by improving your particular credit score, it is possible to secure better terms on the mortgage and so help make it that little more affordable.
The only way to achieve this is to clear some (if not all) the existing debt, thus making it viable for the lender to grant a home loan with bad credit.
A consolidation loan hands the borrower the opportunity to clear all debts in one go, with the individual debts basically bought out by one new loan, and replaced with a more manageable debt repayment scheme.
The result is a stronger debt-to-income ratio, a higher credit rating and more cash each month to meet the mortgage repayments with.
The improved situation not only makes securing mortgage approval more likely, but lowers the interest to pay and the home loan far less costly than it otherwise would have been.
Make The Mortgage Affordable There is no great trick to making a mortgage affordable, but once it is done, getting the home loan with bad credit becomes pretty straightforward.
The best way to make the monthly repayments affordable is to lower them, and this can be done by agreeing a longer repayment term - say 40 years instead of 30.
The result is a repayment that is perhaps $150 lower, so securing mortgage approval becomes a formality.
However, remember that with a decade longer to repay, the overall cost of a home loan does increase dramatically.