Home Buying in Ewing>Question Details

Amber, Home Buyer in Ewing, KY

can a home loan be obtained without any credit,not good or bad,..0debt?

Asked by Amber, Ewing, KY Mon Aug 29, 2011

im 22 yrs old & my co-borrower is 21...neither of us have credit,we have no debt,& are employed full time..

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Even though you don't have any credit scores or credit, you can still qualify if you have enough non-traditional credit. Non-traditional credit is just like what John Burke said, items that do not traditionally report to your credit report but are still forms of credit. I wrote a blog post (the web reference) which explains what types of non-traditional credit can be used, how many of them and how long you need to have them for, and what documentation you'll need in order to show a lender you have enough non-traditional credit to qualify. The general rule of thumb is you need 3 forms of non-traditional credit at 12 months each.

FHA financing is one of the more popular loan programs that will accept that type of credit, and just requires 3.5% down. USDA Rural Housing financing also will accept non-traditional credit, and is 100% financing, but most mortgage lenders will want you to have credit scores & traditional credit... but with USDA, you can actually apply Direct with USDA and do not have to go through a mortgage lender. The catch is your household income (everyone in the house's income) must not exceed income limits which you can find at http://www.rurdev.usda.gov/SupportDocuments/KY%20Direct.pdf (is increases per every person who will be living in the home). The person you'd want to speak to for the Direct USDA program in your area is:

Bruce W. Barnes
Area Specialist
(606) 845-2851 ext 4
13 MEADOW LN
FLEMINGSBURG, KY 41041-9696

Let me know if you have any further questions.
0 votes Thank Flag Link Mon Aug 29, 2011
Hi Amber,

Yes, as long as you have something to substitute it with. For example:
1) Rental history
2) Cell phone bill
3) Utility bills
4) Car insurance
5) Cable or satellite tv bill
0 votes Thank Flag Link Mon Aug 29, 2011
No credit can bet better than poor credit, the only person that can tell you is a loan officer, your best bet is to meet a local and trusted loan officer who can prequailify you at no cost and let you know if you can get a mortgage and what the down payment and closing costs will be.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Aug 29, 2011
Amber,
Without a credit history, you are going to need to make one from non-traditional sources, such as a utility company, rent, cable or satellite bill--anything you pay on a monthly basis, that you can show a record of paying. This establishes that you pay your bills in a timely fashion. Not many lenders are willing to take the time and effort to build this credit history, but if you can find a local lender who will sit down with you and help you establish a credit history, then many times this will allow you to get a home loan. It will probably take some time, but not as long es trying to establish a conventional credit record with a credit card or 2, and a car loan or other type of installment financing. Good luck,
John
0 votes Thank Flag Link Mon Aug 29, 2011
While I can't offer you a guarantee of loan qualification without knowing more about your situation, the short answer is you're very likely to get a home loan of some type if you're fully employed. Without a credit history, you're going to pay much higher mortgage interest rates than others, so expect your home financing cost to be a major hurdle to home ownership. You may even have to go with a non-traditional lender to qualify. Ultimately, you should consult a local mortgage loan originator.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Mon Aug 29, 2011
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