When you have no credit at all, it can make getting any type of loan a little harder, as creditors base their decisions largely on a person's creditworthiness. Without credit, lenders do not know whether a person is creditworthy or not. If you want to buy a house but have no credit, here are some of the options you could look into.
Put a large payment down on the purchase
Lenders often take a close look at a person's financial past to determine if the person seems worthy of a loan. If a person has no credit, it makes it hard for a lender to know the answer to this, but a lender might be more willing to approve a loan if you can offer a lot of money down on the purchase. When you put a lot down, the loan amount decreases and the equity in the home increases. This makes the deal less risky for the lender, and that is why you will have an easier time getting an approval if you can do this.
Take time to build your credit
If you are worried that you will get denied a loan or get a bad interest rate on the loan, why not take some time to build your credit. While building credit can take years, there are ways to get some credit on your report quickly, and one option is to get a credit card. If you get a credit card and start using it, you will have a simple way to build payment history, and this will help you build your credit.
Seek out help from a mortgage broker
Another option you could consider is contacting a mortgage brokerage firm. Mortgage brokers typically have more connections and options than banks and traditional lenders, and a broker could steer you in the right direction if you want to buy a house without any credit.
Lease to own a house instead
One other option you have is to buy a house through a lease deal. There are homeowners that are willing to sell their houses through this method, and you can often qualify for a deal like this if you have bad credit or no credit at all.
These are all good options to consider using when you want to buy a house but have no credit. If you have questions about getting a loan with no credit, consider talking to a mortgage broker about an FHA mortgage.
Share30 November 2018
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