Can I get a mortgage without having any credit score?
The lending environment has really tightened up and having a good credit score is more important than ever when looking to obtain a mortgage. So, for someone out there who has always paid cash for everything and has not established conventional credit, may be asking themselves "Can I get a mortgage without having any credit or score?"
While policies will vary from lender to lender, there are possibilities for folks without reportable credit, or a credit score to still obtain mortgage financing.
Bear in mind that if you're looking for a bank to lend you a pretty hefty chuck of change for generally, the biggest investment someone will make, they are going to still want to know that you are a good credit risk. So, let's look at some examples of what a lender will want to document in order to provide a mortgage without having a credit score.
In my experience, I've generally seen lenders that will accept "Alternative" or "Non Traditional" Credit, break down their requirements into "tiers". While the below examples again, will vary from lender to lender, this is some pretty typical stuff I've seen. Generally, the lender will want a twelve month history for each "alternate" credit source, and a minimum of four alternate creditors. Generally without exception, at least ONE, needs to be housing related.
*Tier One Credit.*
Housing related source. Again, the lender is going to require one housing related credit source. They will generally want the credit reporting agency to verify satisfactory rent payments. They will also want to know "who" verified the rental history. In other words, did a property management source verify the payment record, or did the individual landlord verify it. If it was verified through just a landlord, the lender may require copies of cancelled rent checks in addition.
Utilities, providing the utilities aren't included in the monthly rental amount.
Acceptable utilities would generally be gas, power, water, phone and cable services.
*Tier Two Credit*
Medical Insurance premiums (excluded are payroll deductions)
Auto Insurance premiums
Life Insurance premiums (excluded are payroll deductions)
Insurance paid for household goods or a renters policy
*Tier Three Credit*
Payments on school tuition
Payments on medical bills
Rent payments for durable goods
Payments to local stores such as appliance stores, specialty shops, etc.
Child care payments
A loan from an individual. This will need to be well documented with a signed agreement and copies of cancelled checks
So, if you are looking to buy that first home and are having difficulty securing financing and are being told you can't get a mortgage without having a credit score, seek out a lender that can build credit using these alternate or non traditional means.