Posted on: 11 June 2018
Buying a home is a major financial investment. There are a lot of things to consider when purchasing a property. Before you even choose a home, it's important to make sure that you have your finances in order. If you have purchased a home in the past, you likely have a good idea of how the process works. However, if you have little to no credit history, buying a home may be difficult. In fact, having no credit at all can be a major hurdle when buying a home. If you have no credit, here are three tips for buying a home.
Take Steps to Build Credit
The first thing that you should be aware of when it comes to having no credit is that it doesn't take that long to build it up from scratch. Taking a few steps to build your credit can pay off when it's time to buy a home. A few things that you can do to build credit include opening a secured credit card, being added as an authorized user on a friend or family member's credit card, or taking out a small loan. A credit score can then be calculated within three to six months.
Save For A Down Payment
Getting financing for a home when you have no credit history can be difficult but there are a few other options out there. Paying in cash for your home or having a significant down payment may make purchasing a home easier. A down payment of over 20 percent may increase your chances of getting approved by a lender. A larger down payment shows that you are serious about home ownership and also reduces the amount of risk a lender will be taking on by lending to you.
Another tip for buying a home with no credit is to shop around. There are lenders out there like SWE Homes who are willing to offer no credit financing. Shopping around and looking at multiple lenders can increase your chances of getting financing. Many lenders will look into other types of financial information, like payment history on things like rent, when making a decision. The type of loan you use can also make a difference. Getting an FHA loan may be easier than getting a traditional home loan if you have no credit history.
Buying a home with no credit can be difficult but there are a few things that you can do to increase your chances of getting financing. Taking steps to build credit can be very helpful. Saving up for a larger down payment may also make getting financing easier. Shopping around and looking at multiple lenders may also increase your chances of being approved for a home loan.Share