You need to have a credit history, and it needs to be good. While you may not have credit cards or other history, there is a way to build your credit history. Consider a secured credit card to start with if you are unable to get a standard credit card. Use it carefully and pay it off promptly. Also, a good mortgage broker/lender will also use alternative sources for credit history such as rent, cell phones, cable bills, etc. You may also be able to get a small personal loan from your local bank or credit union; set the money aside to make payments on it for 3 to 6 months, and then pay off the remainder. An FHA mortgage requires 3.5% downpayment, and conventional loans 5-10%. Of course, the higher your downpayment, the lower risk for the bank, and the more tolerance they may have for a less than stellar credit report. Once you have a 20% downpayment, you avoid the additional cost of mortgage insurance.