How To Get A Home Loan With No Credit
Those that don't know how to get a home loan with no credit may be missing out on an incredible opportunity. While establishing credit can ease the process of purchasing a home, this is not always a requirement. Traditional loans may be hard to come by but those without credit can still purchase a home by several different means. However, these three methods are intended for those that wish to obtain a mortgage without any prior credit history.
- FHA LOANS. Although this particular type of home loan is considered most desirable by those with lower income and/or no down payment, it can also help those with no credit. This type of home loan has both advantages and disadvantages though. He may be more restricted on the amount that he can borrow and payments will often be based upon income. This can be beneficial if he has a less desirable income for a traditional loan but it can take years to pay off this type of mortgage.
- LEASE OPTION. Some homeowners are turning to the lease to buy option in an effort to sell the home. This method for buying a home with no credit works a little bit differently. Rather than attempting to get a home loan, he can lease the home until credit is established. In some cases, he may become eligible for a home loan based on timely payments while leasing the house.
- MODIFIED TERMS. Getting a home loan with no credit may require that he accept less than desirable terms. Interest rates, closing costs, and other fees may be considerably higher when obtaining a mortgage without adequate credit. In addition to this, he will need at least the standard down payment of 20%. Some lenders may offer more reasonable terms if a larger down payment can be met though.