How to Buy a Home with No Credit History at All
You may have rented for a long time and have never owned your own home. You might also have never had a credit card or a line of credit. This most likely means you have no credit score at all. If you have now decided you want to buy a house, it could mean you won't be able to get a conventional mortgage through a major bank. One of the main things they look at is your credit history.
If you want to buy a home but have no credit history at all, consider trying no credit financing. Here are a few options that could be open to you.
Apply for a Federal Housing Administration Loan
If you don't qualify for a traditional mortgage through your bank, you could try applying for no credit financing with a Federal Housing Administration Loan or FHA. If you have a steady income and a good payment history, you could get approved for an FHA.
FHA doesn't look at your credit history to grant you a loan. Instead, they look at your payment history and income. For example, if you have paid rent on time for years, you could prove to be a good risk for a loan. The same is true if you have paid any type of bills like cellphones, utility bills, or car and insurance payments. If you have a good history of paying on time, you could qualify for a loan.
Apply Through a Small Bank
Instead of trying to get a mortgage through a larger bank, try a smaller bank or a credit union for a mortgage. Smaller banks might be more willing to take your payment history into account instead of a credit score.
Credit unions and smaller banks can make a good choice for no credit financing as many are more open to working with you to find the right solution for you. It could be you might need a co-signer to get the loan, but because you have a good payment history, you may qualify.
Try Another Type of No Credit Financing Program
There are other options should you have no credit history at all. You could try programs such as Habitat for Humanity. You will have to check their requirements to see if you meet them, but many families do if they have a good payment history, and can prove they can make mortgage payments. You could also try programs such as the Neighborhood Assistance Corporation Of America or NACA. They help those with no credit at all or have bad credit get no credit financing.
If you are a member of the military, you could try for a VA loan if you have no credit. You may also be able to apply and qualify through a mortgage broker. They can help you find ways to gain a credit score and to potentially qualify for a loan.