If you want to buy a house and feel that you are financially ready, you might experience some problems getting a loan if you do not have any credit yet. Credit is something that takes time to build up, and a lot of young people simply have not had enough time to build any up. If you do not have any credit, there is still a good chance you could get a loan, and here are some tips to help you with this.
Talk to a Mortgage Broker
One of the best ways to get a loan without any credit is by talking to a mortgage broker. Brokers work with many lenders and typically understand all types of loan programs. A broker will examine your entire financial picture to see if you qualify for any types of loan programs. If you have no credit but have a lot of other positive attributes with your finances, the broker may find a loan that will work for you.
Prove Creditworthiness in Other Ways
When you have no credit on your credit report, there are often other methods you can use to prove that you are creditworthy. One of the best examples is your rental payment history. If you want to buy a house, it is likely because you are currently renting. If you are renting, you could ask your current, and any previous, landlords for a record of your payment history. If your payment history is perfect, it will show that creditworthiness, and you might be able to use this to qualify for a loan.
Additionally, you could print payment history statements from other bills you paid, such as insurance expenses, utilities, and cellphone bills. If you can show that you have paid all these bills on time for a year, or longer, it could help you qualify for a mortgage loan, even though you have no credit.
Put Money Down
One other thing that could help you qualify for a mortgage loan is putting money down as a down payment. If you have no money to put down, a lender would have to offer 100% financing, which is extremely risky for lenders. On the other hand, lenders have less risk when they only have to finance a portion of a home purchase.
If you currently do not have any credit, you could still get a loan. To learn more about this, contact a company such as SWE Homes.
After thinking long and hard about what to do with my living situation, I finally made the decision that it was time to buy a house. I was tired of living paycheck to paycheck because of rent, so I began working with professionals to guide me in the right financial direction. I was able to find a great company that offered exactly what I wanted to learn, and they walked me through the financial aspects of home ownership. Within a few short months, I was living in a gorgeous new home that I absolutely loved. Check out this blog for great advice on home ownership.