I'm thinking of buying a single-family home in Elk Grove. The problem is, I have no credit history. Is it possible to get a loan for around $125,000?

Asked by Matthew, Elk Grove, CA Sun Jun 30, 2013

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Morgan Larson, Agent, Folsom, CA
Sun Jun 30, 2013
If you have no credit you are likely going to need to build your credit before purchasing. Speak with a mortgage broker to find out the real deal on your qualifications. Maybe you are better qualified than you think. And if you aren't they can give you tips on how to build credit, etc.

Also, the $125k price point is quickly diminishing, and is virtually gone in Elk Grove. When you speak to a mortgage consultant, they can also give the real deal on how much you qualify for based on your income, and how much your minthly payment would be including taxes and insurance.

Best of luck!
0 votes
Keisha Mathe…, Agent, Elk Grove, CA
Sun Jun 30, 2013
Hi Matthew

You haven't said whether you are coming in with any cash. So I am going to respond under the assumption that your purchase amount will also be $125K.

Looking at some of the responses, you have a variety of options. I would most agree that you want to focus on builidng your credit history. It may take some time, but you will fare better, have more options, and be more competitive with a better credit history - it will be well worth the wait.

In addition, the market is taking another turn in the next 12 months. New construction will assist in increasing inventory and reducing prices - making home buying more affordable than ever. Interest rates are still at their lowest even wih the recent increases.

To put it in better perspective for you, in 1981 the average home price was $82,500 with a 16.63% interest rate equaling a mortgage payment of $1,147/mo. In 2011, the average home price was $242,300 at 4% interest and a monthly mortgage payment of $1,093. $1,147 in 1981 is equal to $2,838 today.

So what am I saying? Take the time to position yourself to be in the drivers seat of your home purchase. If you go in as a desperate buyer where your lender has to "fix" a few things, and the file is touch and go (and very stressful for you), you will end up with a higher interest rate, and you miss the opportunity to learn to be a good steward of your finances before walking into the largest purchase you might ever make in your life. Moving too soon, you could also be setting yourself up to default on your loan in the future. Take the time to be a stronger buyer - history shows the market gets better with time.

Keisha Mathews, REALTOR®
CDPE®, HRC®, HAFA® Certified
SAR Masters Club Member 2012
SAR Masters Club Steering Committee
Mathews & Co. Realty Group
@ Century 21 Landmark Network
(916) 370-1803 cell
lic#: 01439130
1 vote
You're welcome Matthew! My pleasure.
Flag Sun Jun 30, 2013
Thank you Keisha, that was very informative. I will definitely take your advice into account!
Flag Sun Jun 30, 2013
, ,
Tue Jul 2, 2013
Good afternoon Matthew,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

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0 votes
, ,
Tue Jul 2, 2013
I am assuming you have no credit score. Do you have someone, a family member who would put you on their credit card?

If so do that and then open another credit card.

Give me a call if yoiu wnat help doing the loan, I may be able to do that.

Rich Littlefield
WCS Lending
NMLS 287206
0 votes
Jim Walker, Agent, Carmichael, CA
Sun Jun 30, 2013
Ask a loan officer if you can bring in four sources of payment history experience that show you have excellent payment history. Documents such as a years worth of rent receipts, utility bills paid on time, even cable and phone bills paid as agreed. If the first loan officer shows no desire to work with you, try another.
0 votes
James Tan, Agent, elk grove, CA
Sun Jun 30, 2013
Hi Matthew

Do you have no credit ? or bad credit ? If you have no credit history at all, it may be possible to get a loan with a 60% loan-to-value from a few lenders. The interest rate is higher than usual.

How much do you have for a down payment ?

Hope that helps,

James Tan
Bethany Real Estate & Investments
dre lic #00825870
916 230 5250
0 votes
Lee, , Sacramento County, CA
Sun Jun 30, 2013
Not a regular conventional loan - but maybe a private lender may help - however you want find a home that low in elk grove- maybe in outskirts in Sac- county- or maybe even a rent-to own - hope this helps
0 votes
, ,
Sun Jun 30, 2013
Well we need a little more information. Check us out at http://www.TheMortgageOutlet.com and give us a call. One of out loan officers will be able to take you through all of your options
0 votes
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