Is it possible to get a mortgage with no credit?

Question

My g/f are looking into buying a home of our own. neither of us have credit. we pay for everything in cash. we have 0 debt. no car payment nothing. we between the both of us we have been renting for about 3 years. we have never been late on a payment. with all this talk about "credit scores" and that it can save you thousands of $$$ if you know it, i am not sure how easy it is going to be to actaully get that much money loaned to us. we also will have a 10-15k down payment right off the start. oh i should also say we are both 21 also. so does anyone know if i can even get a mortgage?

Thanks guys

may i also add that we have been paying for rent via check. not cash. good lord.

one last thing. i dont want a credit card, or want to have a smaller loan for something like a car. if i want something i am going to pay for it in cash. but a house now that i need some help on. but cars and other things are paid for in cash. mine when i drive it off the lot.

also i have ran both of our credit scores at my bank. they both came up blank. nothing. nodda, no history. is that bad?

were both only 21 so we both dont have that long of a job history. but she has only had 2 differnt jobs in 6 years, and i have only had 2 differnt jobs in 6 years. neither of us have ever been unemployed. and we both work for big good paying companys.

Answer 1

You will need 3 alternative tradelines (cell phone, car insurance, utility bill, etc.) that has a 12 month history of on-time payments + a rental history of 12 months with no 30-day lates. The lender will verify your rent with a VOR (verification of rent form) if you rent from a company or they will request 12 months cancelled checks if you rent from an individual. FHA loans are great, but tend to be difficult to qualify for, have high closing costs, private mortgage insurance and the house has to pass an FHA inspection. Most brokers have wholesale lenders that offer alternative loans to FHA with decent rates and a lot of times they don't require PMI. I'd rather work with someone with no credit history than someone with really bad credit :)

By the way, if you do not have enough alternative tradelines in your name, ask a parent or friend to add you to their account. As for the rent, that has to be verified...

Honestly, this is a no-brainer mortgage and you should be able to qualify for some pretty competitive rates!

Answer 2

Congratulations! You two sound like you have all your ducks in a row and have your heads on straight, not getting messed up in credit card debt.

Your best bet is to talk to a mortgage broker. You'll be dealing with one when you apply for the mortgage anyway, so they can give you the low-down on your individual situation.

Yes, you can get a mortgage with no credit and a BIG down payment (like you have). All a credit score shows is how well you manage your money, and the fact that you have a combined total of $10-15k saved for the down payment tells the lender you can manage your money just fine (really, BETTER than folks who use credit cards to overspend).

Talk to the mortgage specialist at your bank or ask a realtor. They can recommend a mortgage broker. Just make sure you already know how much mortgage you can afford (principle, interest, TAXES AND INSURANCE) before you go. Use your current rent payment to guesstimate how much loan payment you can afford, then use an online calculator to find out how much mortgage that will get you. Add in the down payment and that's how much home you can afford. Don't let them tell you you can afford more - they get paid a commission based on the value of the home/mortgage - bigger home/mortgage=more pay for them. Only YOU know what you can afford.

Answer 3

I would talk to someone at your bank to start things off. I have heard of people using utility bills, cell phone bills, etc as proof that they pay bills on time. With your down payment, depending on the purchase price, it could be possible.

You might, and probably will be, lumped in with people with bad credit, simply because you don't have any. You may want to wait a year, establish credit now, and then try again. But don't dip into your down payment money. That is a good amount to have, so leave it where it is!

If you really must have a home now, contact a bank or a mortgage company. I am NOT an advocate of mortgage brokers. I was almost screwed over by one, but my real estate agent pretty much told him where to stick it. Good thing too ... my closing costs would have been over $5000!!!

Answer 4

You can get a mortgage with almost any credit situation but the worse your credit the higher the interest and payments will be and the less you will qualify for. I realize that the allure of a nicer bigger home is hard to resist but I I suggest first working to get your husbands credit repaired so that when you find your dream home you can get it with reasonable terms and interest rate. Whatever your budget is think of how much more house you could afford with a low interest rate versus the high rate you'd have to pay with a bad credit mortgage. Either way I've listed a couple of resources below that helped me when I was in a similar situation.

Answer 5

a lot of banks don't give mortgages to people with credit scores below 650. You can put your rent payments on your credit report but that would take some time.
I'm a broker and my friend is 21, has horrible credit, but rich and I was able to get him approved with a 25% down payment on a 3.5 million dollar house. If you have no credit I suggest you get an 80/20 loan or you can get a 75/20 with a 5% down payment. With no credit I suggest you go to a broker and ask them what your options are.

Answer 6

Yes, I got a construction mortage with very little or no credit. You need to go talk to your local bank, Do not go through a mortgage broker unless all else fails. It helps if you do have an established checking account though. You have to have some credit, Utilities, rent, even your car insurance can sometimes show up on your credit, there are several programs for first time buyers that will help you, You may not even have to put down a down payment. Good Luck.

Answer 7

Yes, you can get a loan, just the rate will be higher than those with good credit scores. I can help you to get one. I work with a big direct lender/mortgage broker doing business in 48 states, and because the huge volumn of business we do, we get better rate than smaller brokers. We have over 200 loan programs to meet the needs of different situations, from good FICO score and good income and down payment, to poor FICO score and NO income (called "stated income") and NO down payment, so I will be able to find the program which best fits your needs. Contact me at [e-mail] or 408-476-0455 and I can help you. Jessica

Answer 8

sure look here http://www.wesayes.com
text from this site
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also from the same site which pertains to your situation
no credit

Answer 9

In addition to what the others have said, what about your work history? If you both have steady income and job potential, I'd think that would help.

Why not appy and see if you can get pre-approved for a mortgage? Either you get it or you don't, and if you get turned down, do what you need to do to get approved, even if it's getting a credit card or line with a $300 limit.

Answer 10

It is possible. The person who qualifys you can use alternative credit - and build your credit.

1. Rent history -
2. Cell Phone,
3. Regular Phone
4. Auto Insurance

Anything you pay on that is consistant, can be added to build your credit -