No matter when you're ready to buy a home, getting pre-qualified for a mortgage should…
When you’re looking to get a mortgage, your credit score matters. Not everyone has perfect credit, however. This doesn’t mean that you can’t get a mortgage. In fact, we’ve shown clients how to get a mortgage with no credit history before.
If you have little, none, or even poor credit, you have more options than you think.
Let’s go over how to get a mortgage with no credit history. We’ve included expert tips and resources gathered over years of service to clients just like you.
Know your numbers
You’ve probably heard that “knowledge is power.” This is definitely true when you’re applying for a mortgage.
It’s important to know your credit score because it will help you select which loans you’re eligible for. You’re more likely to be successful if you apply for mortgages that are within your credit range.
It’s also important to understand how much loan you can afford based on your current income. This means understanding whether or not your debt is eating up all the money you’ll need to make your monthly mortgage payment.
Your local mortgage broker can look over your financial situation and make recommendations from there.
Simple ways to build & improve your credit
If you’re wondering how to get a mortgage with no credit history, there are everyday things you can do to build up your FICO score and get a loan. Here are just a few things you can do:
- Pay utilities & rent on-time. Your electric bill, cable, auto insurance, phone, and even your rent payments can be reported to all three major credit bureaus. Pay all utilities on-time for a year, even if it’s just the minimum due. This will help establish a record of financial responsibility.
- Pay other loans on-time. Do you have a car payment that’s due every month? Great! This is a great chance to build credit and demonstrate that you can fulfill the terms of a loan.
Once you speak with a local mortgage broker about your financial situation (things like your income, credit history, debts, etc.), they can develop a plan to help you own a home.
Explore a Federal Housing Authority (FHA) loan
Now, let’s go into what loan options you have available to you.
If you’re worried about how to get a mortgage with no credit history, you should ask your local mortgage broker about an FHA loan. FHA loans are great options for people worried about their credit.
An FHA loan also helps concerned borrowers in other ways:
- As little as 3% down payment
- Smaller interest rates mean smaller monthly payments
- Lower credit score requirements
There are some requirements that you need to meet in order to be considered for an FHA loan. Your local mortgage broker will fill you in on what those are.
In addition to an FHA home loan, you may want to check with a mortgage broker about smaller lenders who can offer mortgages to borrowers with credit issues. A broker will know who to talk to and where to look.
Yes, you can own a home—let’s show you how
Owning a home is possible, even with an insufficient credit history. As we like to say, bring your challenges, and we’ll bring the solutions.
We love showing our clients how to get a mortgage with no credit history so that they can become successful homeowners. (We do it every day!)
At Troy City Mortgage, our door is always open. Let’s get together and put the keys in your hand.
Contact us to discuss how we can turn your dream of owning a home into a reality.
Click here to get started!