3 Tips For Buying A Home With No Credit

There are a variety of people who find that they want to own their own home but don't have enough of a credit history to obtain financing. Not having credit is something that often happens with younger people who have never had a credit card or taken other steps to start building their credit. Those who typically pay in cash, don't have any credit cards, and have never been late on a bill, may also find that they don't have much of a credit history. While not having any credit is not necessarily a bad thing, it can make purchasing a home difficult. Here are three tips for buying a home if you have no credit.

Take Steps to Build Credit

If you are thinking about buying your first home in the near future, there are a few steps that you can take to establish and build credit in the meantime. Then when you seek out financing, you may be able to obtain a mortgage without any issues if enough time has passed. One thing that you can do to build up your credit is get approved for a credit card. This may require a cosigner, but opening up a credit card account can help you build your credit quickly. Taking out a loan, such as a student loan, will also help build your credit. If you have at least one credit account, you should have a credit score within six months.

FHA Loans

If you are looking to buy a home quickly with no credit, there are a few no-credit financing options available. FHA loans allow you to buy a home with no credit. These loans are back by the Federal Housing Administration and are available to those with no credit history. These loans are offered by various lenders and other financial information will be taken into consideration in order to determine whether or not approval should be granted.

Save Up a Large Down Payment

Another thing that may help you buy a home with no credit is by saving up a large down payment. There are many benefits to having a large down payment. It will signal to lenders that you are financially responsible and that you are ready to own a home. Saving up a down payment of 20 percent or more will make lenders more likely to approve you for a loan even with no credit history. You will also be able to avoid private mortgage insurance with a larger down payment.

If you are trying to buy a home with no credit history, there are a few things that can help. Taking steps to build up your credit is a great option if you have some time before you plan to buy. FHA loans are a great option for those who want to buy homes with no credit. A larger down payment can also increase your chances of getting financing. 

Reach out to a company like SWE Homes for more information.