Florida is a lovely place to have a house in; unfortunately the real estate prices are rather forbidding for most. And for someone with a bad credit past, it gets tougher. However, if Florida real estate has is in your dreams, you can still get a mortgage loan, even with a bad credit if you know how to look for it.

Before we get into shopping for the best mortgage rates, let us understand how the credit score of a borrower determines the scope of his search. Most lenders will willingly lend to a person with A credit score but someone with a C or a D grade wont get so lucky.

Fortunately, recent entries into the Florida lending industry have led the industry into being more liberal when approving loans. For instance, if there are more than 4 late mortgage payments in a period of 12 months, it calls for a B score, however if these delays have a plausible explanation the lender may excuse the default and consider a score of A.

There are companies who specialize in giving loans to high-risk borrowers and they are known as Sub-Prime lenders. Even though loans from the Sub-Prime source continue to dominate the high-risk borrowers segment, the government-sponsored agency, Fannie Mae too is beginning to acknowledge the potential in this category. With the availability of more options, a borrower with bad credit can afford to get choosy and not jump at the first approval he gets for the fear of not getting another chance.

The Internet is a good place to look for multiple mortgage options and even for specifically Florida Mortgage Loans, without the borrower having to reveal his credit status. One may even go to a mortgage broker in order to locate the best quotes, but they can be expensive. Ask for reference from friends and colleagues for a good mortgage lender, since a recommendation is always assuring.

Once you narrow down your choice, here is a checklist that you must go through.

1. First analyze your financial status, if you find you have come out of your past credit blues and can commit more you can consider an Adjustable Rate Mortgage (ARM). An ARM allows for a lower rate of interest in the initial years with an option to refinance at a lower, fixed rate after the first couple of years. However, if you find yourself financially burdened, a fixed rate payment would be more appropriate. Search, negotiate and settle for a rate of interest and for terms and conditions that suit your financial status.

2. Find out how much penalties are imposed for pre-payment. Heavy penalties will take away the advantage of any timely payments that you may be able to make and that may get you a refinance on better terms in the next few months.

3. Most Sub-Prime lenders exploit the vulnerability of high-risk borrowers and slap on high closing costs at the end of the loan. There are more lenders out there willing to do business than one would have you believe and a little negotiation can always add to some cost shaving.

4. Avoid paying any upfront or processing fees; the only fee acceptable should the one you pay for your credit application.

5. Ensure that everything goes on paper in writing, from the rate of interest, to the closing costs to the pre-payment penalties and that nothing comes as a surprise after you have signed the contract.