It’s difficult to buy a home these days, but when you have no credit, it gets even harder to be approved for a loan. As Dean Graziosi points out in a post on a similar topic, while some people have been building a credit score for years, others haven’t been able to do this. If you fall into the second category, you’ll be happy to know it will still be possible for you to buy a home.
A high credit score enables you to purchase larger items such as homes and cars at lower monthly payments. This serves as a disadvantage to those who have either chosen not to have a credit card or who haven’t been able to sufficiently build up enough credit to be privy to these perks. The end result is paying more each month and not getting the best possible loan. Even so, one of the best ways to build up your credit is to purchase a big item such as a house. The key is to prepare yourself for the larger payments and higher interest rates by saving money. The more you are able to place on a down payment, the better off you’ll be in the long run. This also shows the mortgage companies you will be good for the loan because you’ve taken the time to save up enough to get started.
Saving money will give you something to use on payments each month so you can stay ahead. You’ll also have something to fall back on in hard times.
Typically, a minimum credit score of between 620 and 640 is required before you can even be eligible for a loan. There are, however, some other methods you can use if you don’t have a score that falls into this range. As Dean Graziosi explains, this is how lenders will determine your current credit standing.
Rental history does count for something. If you pay on time, lenders who are looking into your credit will be able to use this information to determine you are in good standing with your landlord. If you’ve never been late in paying rent, this will serve you very well. The same will apply to all your other bills.
Some lenders will require a co-signer on a loan before approving someone without credit. Many people are very hesitant to co-sign for good reasons, but finding someone who trusts you enough to do this could actually help you obtain the loan you are seeking.
If you have bad credit, straighten it out by paying off all debt and re-establishing credit before even attempting to request a home loan. If you have filed bankruptcy, you will be given a certain amount of time before it will be possible for you to begin re-establishing credit.
Purchasing a home will be harder without a credit score, but by following a few general suggestions, it can become possible. According to an article posted on MSN Real Estate “it’s exceedingly difficult to obtain a mortgage without a credit score.” Nevertheless, it can be well worth it in the end. You can learn more about this and other topics by visiting Dean Graziosi’s website.