A divorce or bankruptcy can wreak havoc with not just your emotional life, but your financial life, as well. Your credit rating can take a hammering, and the dream of owning a home might seem far-fetched for a while. But there are options even in the darkest of times, and getting that home loan can put you back on track to a full recovery.

Bad credit home loans

The first step to take is to lower your expectations a bit-the best interest rates will go to customers with impeccable credit histories. However, if you're willing to concede a couple of percentage points, you can get a bad credit loan and get on with your financial life. There are many lenders that specialize in bad credit mortgage loans, and they're willing to take on the higher risk of spotty credit in return for higher interest rates and increased closing costs.

In some cases, you can get a better rate with a no-documentation or reduced documentation loan application than you would with a bad credit loan. No-doc loans also preserve your privacy, because you don't have to disclose your income, credit history, or bank balances. But for most people, a no-doc loan will be more expensive than a bad credit mortgage.

Lifesaver of mortgage loans

While hardly ideal, these loans can be a lifesaver, and an important first step on your road to recovery. If you need extra money now, some lenders will let you borrow more than you're paying. In any case, steady repayments will repair your credit score with just a little patience. Another choice would be to wait a while, improve your credit in other ways, and then look for a mortgage when you're armed with a better credit score; but this isn't always workable.

A bad credit loan isn't always a bad thing. It's often the start of a whole lot of "good"-a good home, a good credit score, and a good life.