The answer is dependent on how bad it is. Due to the high foreclosures and unstable market, lenders will not approve mortgage for a person with a FICO score below 600. This is the average in the industry.
There are some lenders who will demand around 640-660. Of course they consider other factors like present debt, down payment income and more. Lenders will pretty much want a high score. There are some states with weak market and the score might go as high as 700.
An option is applying for FHA loan. You can find mortgage brokers san francisco that offer this. Watch this video related to its pros and cons. http://www.youtube.com/watch?v=ChNXceh3J4Q. It is said that FHA mortgages are available for those with score lesser than 500. Only a handful of lenders will consider that low score. If you do a research, you can still find someone who will accept this. The only drawback is that they only accept about 10% down payment at the minimum.
Remember that having a low credit score will mean getting high interest rates. Those with credit score around 620-640 will pay an interest around 6%. Pretty much higher than a borrower with good score. Are you familiar with FICO scores? Some people don’t know about this number. If you have asked a copy of report from one of the credit rating agencies, this isn’t the FICO score. The number is quite different from what your FICO score will turn out. There are some agencies who don’t give this to the person but to the lender only. You need to be sure that it is the FICO score.
In case you are not aware about your FICO score, don’t assume that you have a poor credit even if you have small problems with record. There are lenders who don’t report late payments right away even if it is two months late. Just because you pay late doesn’t mean your credit score is bad. Remember that the score is only about credit and not on other problems.
Even if you made late payments and it is stated on your records, the effects are short lived. This will just remain for about 7 years. The record will recover around a year. Of course avoid making a lot of missed payments or else, you will have a long waiting period. The worst thing that can affect your score is bankruptcy, foreclosure or more than 3 months payment delay.
Definitely you can acquire a loan even with not so good credit.