Mamacita asked:
How can one mortgage a home without any credit history? We don’t own any credit cards and credit is harder now to obtain than before. What kind of a down payment would we need?
How can one mortgage a home without any credit history? We don’t own any credit cards and credit is harder now to obtain than before. What kind of a down payment would we need?
Thanks!
FHA has a no score program, but no investors are buying them so it is very hard to do. With the no score program we use things such as light bills, water, rent etc as credit. However, since most mortgage companies end up selling your loan to an investor most investors are not buying these loans now they are rarely getting done these days.
You would need a credit score of at lease 620 in order to qualify…plus a down payment of 10%-20%. Without credit, the lender may be willing to accept a co-signer with established credit.
It’s going to be awfully hard, but if you can supply a 20% down payment, and prove your income with tax returns, you have a very good chance. Good luck!
For some people 20% is a lot to put down. There are many instances where the parents could help out. They can sign onto the mortgage as a guarantor. After one year they can be removed from the mortgage through a lawyer. Lenders want to see that you are good with credit prove your responsible and lenders will have no problem with you in the future. There are many times a guarantor is needed for younger professionals without any credit history. Speak to a mortgage broker they can help you.
The slow way is to get a credit card from your bank and start using it. Make sure your payments are on time and in 3-6 months you will start seeing your score. Typically, you need 1 or 2 open lines of trade (credit card, line of credit, personal loan) to get a higher score. Make sure you make your credit card payments right away and try not to carry any balances over to the next month. Keep your statement balance at $0 while using your card regularly
creditreport.imess.net – try this service to boost you credit score before getting loan. After credit repair you can get the loan with minimal interest rate.