But once you have been with a non-standard sub prime lender for three years, as long as you keep up your mortgage payments you will have established a new history and can return to mainstream market with a new deal at a lower rate. Non-standard sub prime borrowers may also be referred to as 'sub-prime', 'complex prime' and 'credit impaired'.

Next, you should obtain free copies of your credit reports from www.annualcreditreport.com and start working on improving credit score six months prior to expiration date on your existing pre-payment penalty.

There are five factors that make up credit score and your mortgage consultant can coach you through some basic strategies to improve your credit score. This means very conservative use of credit cards, paying off debt as much as possible and not applying for additional credit cards unless you will benefit from such action. You will want to verify that negative items you have paid off are being removed from your credit report, and that good credit history is being reported to all three bureaus. You’ll also want to dispute any errors that appear on your credit reports and seek to have those removed entirely.

Once your credit score improves, it’s time to refinance at a better interest rate. Your mortgage professional should look for a program that carries no more than a two-year prepayment penalty so you can continue to refinance as your credit score increases. You can repeat this process until you reach A-paper status and secure best interest rate available.

This is a strategy that also works well for first time home buyers who do not have enough credit history under their belt to get an A-paper loan at time of purchase. The important thing is to work with a mortgage consultant who can give you a roadmap to follow and a strategy for success in building personal wealth.