First Home Facts

Can You Get A Mortgage With No Credit?

You make your monthly rent payments on time every month without an issue, you have a stable income, and you really believe you could handle a mortgage payment without any issues. However, you have no credit, and you know that finding a mortgage loan without a good credit score can be a hard thing to do. Even though getting a mortgage loan or no-credit financing to buy a home is harder to achieve, it does not mean that it is impossible. There are a few things you should know that may help you along your journey toward becoming a responsible homeowner. 

Make sure you understand the difference between no credit and low credit. 

Some people wrongly say they have no credit when what they actually have is low credit. No credit means that you have yet to establish any kind of substantial credit history. Low credit means you have had some accounts that may not have been tended to as they should have. For example, if you have only had one credit card but you made several late payments, your credit would probably be low to reflect that. 

Seek out lenders that offer manual underwriting. 

Manual underwriting is a more in-depth examination of your financial status, and it does not rely so much on your credit score. When you find a lender willing to offer manual underwriting, you may have to supply a lot more documentation, such as: 

  • Your banking statements
  • Several months of pay stubs or salary information 
  • Rental receipts to show what you've been paying for housing

Your credit score may still be a factor in a manually underwritten loan, but it will not be the primary deciding factor as it is with a traditional mortgage. Therefore, you may have a better chance of getting a loan. 

Consider saving up a substantial down payment. 

The more money you have to pay down on a home, the less money there will be left to finance, which means it will not be such a big risk to give you a loan in spite of your lacking credit. If you absolutely cannot find a no-credit financing option, start saving funds now, and work on getting a substantial down payment. Sometimes, if you can pay something like a quarter or half of a home loan upfront, you will have an easier time finding financing for the rest without your credit (or lack thereof) being such a factor. Contact a lender like SWE Homes to get started today.