The home-buying process is a tricky, scary beast that very few have mastered. For some, the thought of buying a home seems impossible due to a lack of credit. While in many cases that may be true, people without credit do have a couple options.
Having no credit can make it hard to do a variety of things, but the biggest hurdle you will face without credit is purchasing a home. Your credit score is important, because it determines the rates you will pay your lenders on your home loan. Unless you can purchase a home outright, your credit is typically considered for a mortgage.
No credit loans are hard to come by, and in some cases, it may be impossible to secure one. There are some lenders, however, who will work with potential buyers who lack credit.
First Fidelis in Overland Park, Kansas, offers a few different no score home loan options for those in the Kansas City Metro area who don’t have credit.
FHA loans are a good option for people without credit. Since these are government-backed loans, they can be granted using alternate forms of income and credit verification. Instead of checking your credit score, you may be able to get one of these loans using utility bills, insurance payments, rent, or student loans. With this type of loan, you may be required to provide more sources than normal, but they can help you get the loan you need to purchase a home.
For an FHA loan, you will also need to prove that you don’t have any delinquencies on rental payments for at least a year, as well as no other delinquencies for the past 30 days. There may even be income requirements or income to debt ratio requirements to acquire an FHA loan.
At First Fidelis, you can get an FHA home loan with a credit score as low as 580.
If you are in the military, one of the most helpful tools at your disposal is a VA loan. These loans may or may not be granted to individuals with no credit. You would have to apply to see if you could get accepted. Remember, these loans are only granted to military men and women.
While you might not be able to snag a VA loan with no credit, Veterans United’s Lighthouse program can help you increase your credit score to give you a better shot at buying a home. The Department of Veterans Affairs only oversees the Lighthouse program and doesn’t set credit minimums or issues loans. The VA lender who issues the loan may work with the borrower to provide a loan without credit.
While many lenders may require minimum credit scores ranging from 660 to well over 700, VA loans tend to require a credit score of only 620, which isn’t necessarily easy to reach if you are starting out with bad or no credit, but it is much more generous than other lenders.
With the help of Veterans United’s Lighthouse program, a 620 credit score is possible for veterans looking to buy a home.
First Fidelis can help veterans get a home loan with a credit score as low as 560. If you think you may qualify for one of these loans, contact First Fidelis to get started.
Another no score option is a USDA loan, which is only available for people living in rural areas. At First Fidelis, no score USDA loans are an option for people who qualify.
One way that many people without credit can get loans is to go to a smaller lender. These lenders are more likely to be flexible and work with you to find a solution to your house-buying woes. You will probably need to be able to prove that you are worthy of the loan just like you would with an FHA loan.
Credit unions may be able to help, too. They may offer more flexible criteria to qualify for the loans; plus, they can work with you to get a loan that will work for you.
If you can’t get approved for a home loan without any credit, it may be time to start building some. Get a credit card and make on-time payments or take out a small loan to pay back to start building up credit. If you are currently renting, you may want to speak with your landlord about reporting your rental payments to a processor that reports them to a credit reporting agency to help you build up credit that way.
Learn more about getting a home loan or building credit at FirstFidelis.com. If you have more questions, reach out to First Fidelis at 913-205-9978, or send an email to email@example.com.