When many people start looking for a new home, they wonder what they should choose and how much of an investment it will be. Although many people aren't quite sure about what their new home will look like, the fact of the matter is that there are many aspects to be mindful of when it comes to real estate. From paying attention to how much things cost to looking carefully at your options, it really pays to understand and apply a little wisdom before you break ground on a project. Check out these posts to find out great tips about real estate.
In order to qualify for any type of large loan, you need to have some sort of credit. If, however, you are young and don't have any credit, you may not be able to qualify for a conventional loan. So, what does that mean for you? Does that mean that you have to wait to buy a home until you are more established in your career and have built up your credit? Not necessarily.
Get an FHA Loan
FHA loans are offered by the Federal Housing Administration for individuals in similar situations to yours. Because not everybody has the conventional 20% to put down on a house and not everyone has an established credit score, the Federal Housing Administration created loans to help people out. Depending on your proof of income and your debt to income ratio, you may apply for one of these loans. The great thing about them is that you only have to put about 4% down on a house, but the fallback is that you will have to pay mortgage insurance which can be several hundreds of dollars a month.
Get a cosigner
Another great option for homebuyers with zero credit is to have someone cosign on a home loan with you. When you have a cosigner, the lender will use their credit and income to help you qualify for a loan which means essentially that they will also be responsible for the mortgage if you were to skip payments. Because being a cosigner can be risky for a friend or family member to do, it may not be advisable for them, but it's definitely something worth pursuing on your end.
Go With a Local Credit Union
When you are working with big lenders and you don't have any credit, you may get declined a home loan right away. When you work with a small, local credit union they tend to be more lenient and may qualify you for a home loan. Meet with several different credit unions to see if they can lend to you and what kinds of interest rates they can get you.
If you do end up getting a home loan but it comes with a high interest rate, remember that you may be able to refinance in a few years at a lower interest rate. To learn more about no credit financing, reach out to some lenders in your area today.
Share10 March 2020
