Buying A Home
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Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Buying a house with no credit
My husband and I have paid cash for everything we own, including cars and other things. We have never taken out a loan or gotten a credit card... We are financially stable but will need a loan for a house in about ten months when our rental lease is up... Any suggestions? We don't want credit cards but wondering if we truly need credit to get a first time homeowners loan... any advice??
Ali Hamel
Re: Buying a house with no credit
Check your credit scores. If you indeed have absolutely no credit, as in a 0 score, then you'll probably need to get a credit card for each of you. I know you don't like the sound of that (I myself don't have a single credit card anymore!) but it may be the best and quickest way to establish some kind of credit. Just put a small purchase on it and pay it off each month.
There are also mortgage loan programs out there for people with lower credit scores. Just speak with a mortgage officer at a good bank and I'm sure they can give you more info on them.
~Benjamin Franklin
DS dx with celiac disease 5/28/10
Yep. Just get a credit card. It's not an evil thing if you pay off the balance each month.
Mr. Sammy Dog
We are going thru the mortgage process now and when they did our credit checks he had no credit. Not bad credit, just no credit. He also has never had a credit card or loans. The mortgage is now going under my name with him cosigning (that way it can get him some sort of credit). However, if I can't get approved solely on my own my parents are going to co-sign only since they have a credit history to report. Credit is very important. Like PPs said, get a credit card and start building credit. You can pay it off each month, so instead of using cash spend the equivalent on your cc, Even though you've never been in 'debt' (ie student loans, etc) lenders don't care.
Some credit card offerers have "charge cards" which work just the same as credit cards, except they HAVE to be paid off each month. So you don't have the option to carry a balance on them/incur debt and interest, but you do build a credit history. Something you might want to look into.
yes, you should establish credit somehow. you can do it in responsible ways. not all credit is bad. in fact, if you use it responsibly and strategically, it can be a very good financial tool.
even if you get credit cards now, you may still have low scores for awhile as a major factor in your score is the length of your credit history.
Depending on the lender, you may also be able to provide copies of payment history for recurring monthly bills. Utilities, cell phones, rent payments, etc.
My CW had no credit history and his lender was willing to approve him provided he show reliable payment history.
Open accounts with a credidt union - and talk with a mortgage lender at the credit union. Often they will accept alternative forms for credidt - utility bills, rent receipts etc.
I would get a credit card and use it for gas only and pay it in full each month.
I would speak to a loan officer and see what your options are. It's possible that if you can prove that you paid everything with cash that your lack of credit won't hurt you.