/What to Do if You Want a Mortgage but Have No Credit Card or Loans

What to Do if You Want a Mortgage but Have No Credit Card or Loans

Buying a home is a big deal for most people. It takes years of saving and responsibility and is often a sign that you’re ready to sit back and settle down. However, life is complicated and expensive and sometimes plans can go awry. It’s not uncommon for first time home buyers to realize they haven’t established credit in their name if they haven’t taken out a previous loan or had a credit card.

If you’re asking yourself how you can get a mortgage to buy a home when you’re ready then keep reading.

When you have no credit, a lender has to do what’s called a manual underwriting. It’s something lots of banks did back in the day, when they actually used common sense when it came to making loans.

Fortunately, a few places will still work with you in this manner. They take a look at your work history to see if you have a stable job and a good income.

They want proof you pay your bills on time, too. This can be as simple as showing them several utility bills, rent statements, and other receipts. They’re basically looking for a long history of proof that you honor your financial commitments.

Do your very best to save up for a down payment of at least 20 percent, too. That way, you’ll avoid the added expense of PMI (private mortgage insurance).

Keep reading at Fox Business.