Have you avoided the curse of credit cards and otherwise stayed out of debt? Do you want to buy a home but your lack of any verifiable credit history has the bank shying away? Living debt-free is something to be commended, but it can also cause you serious problems if you later decide that you want to purchase a car, a house, or something else in a similar price range. While establishing good credit is possible, this is a tactic that will take time and patience. If you've already spent several years saving up a down payment, only to be stymied by your lack of any credit history, here are some things that you can do to speed up the process:
Talk to your landlord: Although many landlords may report non-payment to the various credit bureaus, fewer landlords are going to be likely to report prompt payment. If you've always made your rental payments on time, talk to your landlord about reporting these payments to the credit bureaus. This may not be enough to give you great credit on its own, but it can at least help establish some credit and that you have a good payment history.
Save up more money: The more money that you can bring as a down payment, the less your credit will be a factor. If you can manage to save up 50% or more of a home's purchase price, the lenders that you talk to will be more willing to write a mortgage for the remaining amount. Unfortunately, like establishing your credit in the first place, this is something that can take a significant amount of time to accomplish. Although tempting, borrowing the necessary money from friends or family may actually backfire. The lender will want to know where that money came from and how you got it.
Look for a specialized lender: There are many lenders out there who offer no credit financing. These are lenders who are willing to use criteria other than your credit rating in order to determine whether or not you're eligible for a loan. With no credit financing, you may wind up having to pay a slightly higher interest rate than other borrowers are getting, due to the fact that the lack of a history of good credit is considered a high risk to the lender. After a few years of making payments on your no credit financing loan, you'll be able to refinance to a more conventional loan at a lower interest rate.
Contact a company like SWE Homes for more information and assistance.