Getting a Mortgage with No Credit

For younger borrowers, a lack of credit (history) can hurt.

When a loan officer reviews a borrower’s history, the first, and most important, factor is credit. I recently read an article that focused on this question. Even if a borrower had no credit cards, no automobile payment history, and/or other history regarding credit that would appear on a credit report, there are loans still available.

Basically, the loan officer would build a credit history, with items like rental history, utilities, cell phone, etc, and would send the documents to a credit report company that would confirm the positive payment history. Then, the credit report company would complete a report, without credit scores, and send it back to the loan officer to review.

Several lenders, per Fannie Mae and Freddie Mac guidelines, and including FHA guidelines, still allow a manual review of credit history.

So those who are afraid of not being able to obtain a loan because of a lack of credit history should simply collect documentation,  for the monthly payments that they do make,  and set an appointment with a qualified loan officer. You may be qualified.

12 January 2010 | Credit (Score), First Time Homebuyers, Pre-Approval | Comments

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