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How long to get a home loan with no credit history?

BellyRubz asked:

How long of a credit history do you need to establish to be considered for a home loan? There is no bad credit history, just haven’t established credit with anyone.
Asked on: 2009-04-02 18:16:43

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  1. you need a credit history in order to get a home. Some consider no credit history as bad; where is the risk. Just apply for a credit card and you can get a credit history.

  2. If you have no normal established credit history, you can still qualify for FHA loans, and several conventional A-paper Fannie Mae loans, as well as many other bank products.

    What they will typically do is try to build a credit history from what you are already paying. A documentable rental history is the first place we would look. Next, your utilities. If you have been paying your gas, electric, car insurance, cable, cell phone etc… on time (no more than 30 days past the due date), they can use them as tradelines.

    In general, they would want 2-3 utility-type accounts on top of a rental history. No rental history, 3-5.

    But lack of credit is not sufficient reason to decline an FHA loan. That’s right in their guidelines. If you have a history of saving money, like $100 per month into a savings account, they can treat that like a tradeline. Getting a statement from your neighborhood grocer that he has granted you credit that you’ve paid in a timely fashion can sometimes even work.

    Talk to a couple mortgage brokers, and a couple big bank loan officers as well. The big banks have community lending requirements they have to meet, and often have programs specifically designed for people with zero traditional credit history.

    Avoid anyone trying to stick you into a 2 year ARM (2/28, 3/27 are some numbers you’d hear), you shouldn’t need to take a sub-prime loan just because of this.

  3. staceydian says:

    You can use alternative trades such as utility bill,car insurance, cell phone, etc.If you have 3 to 4 of these in your name that have been paid on time for 12 months that can be usedas an equivelant to a 620 credit score. And income willing you can purchase a home.

  4. the dream says:

    You may have to go with a hardmoney lender; you would need 30% down I believe, or 30% gift of equity. For example, buying a house worth 100k for 70,000 dollars.

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