Purchasing a home is a significant milestone in many people’s lives, but the path to homeownership can be challenging, especially for those without a credit score. Traditionally, a good credit score is a crucial factor in securing a mortgage. However, not having a credit history doesn’t mean you can’t achieve your dream of homeownership.
A credit score is a numerical representation of your creditworthiness, and it helps lenders assess the risk associated with lending you money. While a high credit score is beneficial, it’s not the only factor lenders consider when approving a mortgage application. If you have no credit history, it can be more challenging, but not impossible, to secure a mortgage. Gershman Mortgage can do a Manual Underwrite. This option allows us to use alternative credit sources to qualify buyers.
These might include:
Rental history: If you’ve been a responsible tenant and have a record of on-time rental payments, provide your rental history to potential lenders.
Utility bills: Consistent and timely payments of utility bills can also demonstrate your financial responsibility. Collect and present records of these payments to potential lenders.
Non-traditional loans: Consider obtaining a credit-builder loan or a secured credit card to establish a credit history over time. These financial products are designed for people looking to build or rebuild their credit.
A co-signer with an established credit history can significantly improve your chances of getting approved for a mortgage. A co-signer is someone who agrees to be equally responsible for the mortgage if you fail to make payments. Be cautious, though, as this option requires a great deal of trust and responsibility on both sides.
Securing a mortgage without a credit score may be more challenging, but it is not impossible. To get started on your journey to homeownership, contact Andy today at 314-221-7797.