No Credit Mortgage – Not As Easy As it Was But Still Possible
When you have no credit, mortgage lenders assume the worst. You are perceived in the same light as someone with bad credit, a high risk, someone who does not have experience managing debt or any history of paying bills at all for that matter. Getting a mortgage with bad credit is possible but if you have no credit at all you may have to push the rock up a slightly steeper hill.
In 2005 and the years prior it was much easier to get a bad credit mortgage or a no credit mortgage. There were a ton of companies who would lend money to just about anyone. As you can imagine many of these companies are gone or have changed their lending policies and now it is much harder to develop the credit necessary for a mortgage. Many folks are determined to get into a home regardless of their credit score simply because they can’t imagine paying off someone else’s mortgage which is basically what you are doing when you pay rent. This makes sense to me however if this is the path you are choosing you need to be prepared for a giant interest rate, extra fees, strict terms, and extreme penalties if you are late or default on your payments in any way.
There are companies who specialize in no credit mortgages though. Most no credit mortgage lenders will require extravagant fees and have extra expenses due to the high risk of lending to someone with no credit.
You will need to ask your self if this is really the path you should take. Upfront fees could reach into the thousands. However, as with any mortgage you will be accumulating equity, slowly but equity none the less. You’ll need to honestly examine your resolve and figure out if renting for a few years would be less expensive than paying large fees.
If you do decide to rent for a few years first your plan will need to include improving your credit score. If you decide to go for a no credit mortgage you can always refinance three or four years down the road. All in all, by doing a little math and creating a budget for your self the answer should be apparent.
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