Financing in Ewing>Question Details

Waynepowell, Home Buyer in Ewing, KY

My sister & I would like to purchase our first home together,neither of us has credit,not good or bad,what type of mortgage should we apply for?

Asked by Waynepowell, Ewing, KY Wed Jul 13, 2011

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While you will need to have credit, you do not need to have scores in order to qualify for a mortgage. You also don't need to have traditional credit, the type that reports to the credit reports, as you can use non-traditional credit instead.

Without scores, but with sufficient non-traditional credit, you can use FHA, VA, USDA or even Fannie Mae conforming financing (although with Fannie Mae be prepared to put at least 20% down if you don't have scores or traditional credit).

FHA is just 3.5% down, VA financing is 0% down, and USDA Rural Development financing is also 0% down as well (Ewing, KY, and all around you, is an eligible area for USDA RD financing.. and very likely could be your best bet, check http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do for your income eligibility/make sure you don't make too much). Without credit scores you will likely be limited to the "Direct" version, so those are the income limits you'd want to make sure you are within.

I'd copy & paste a bunch of information in the body of this post, but I created a blog that details what non-traditional credit is, how much is defined as "sufficient", as well as how document the non-traditional credit.

"No scores? No problem. Just use non-traditional credit."
http://www.trulia.com/blog/shanethemortgageman/2011/06/no_sc…
0 votes Thank Flag Link Wed Jul 13, 2011
Wayne,
Your lender will help with that. When you first sit down and explain your situation and goals, they will let you know what programs may be available for you. Much of it will depend on your credit, some credit is non-traditional, other considerations will be your down payment, job times etc.
Depending on your timing, it may be possible to get some traditional credit established. A credit card with your bank, even a secured credit line, may be a place to start, but talk to a lender first.
0 votes Thank Flag Link Wed Jul 13, 2011
HI Wayne, If both of you have Jobs and have credit references such as rent reciepts,cancelled checks showing you paid rent for at least 12months, pay car insurance or phone bills etc and you can between the both of you have we believe it's 5 items like this you may be able to qualify with FHA loan. If you can wait a year to buy then we'd suggest Fingerhut.com and billmelater as 2 ways to get credit and have a credit score which will help you greatly and also help to give you a better interest rate on your loan. Remember the fastest best way to make your score go up is this. keep you credit amount below 40% of whatever your limit is. always pay a bit more than the min.amount on the monthly payments. and if possible make 2 payments in a month. the 2nd payment only has to be a small amount. don't go late and keep records of your rental payments either by way of a cancelled check or reciept or even a written reciept of your rental payment.

All the best hope this helps, we don't know Ewing but Lisa know mccreary county ky pretty well alot of family that way.

Dave & Lisa
Web Reference: http://www.urhomerealty.net
0 votes Thank Flag Link Wed Jul 13, 2011
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