Having A Home With A No Credit Check Mortgage

| November 5, 2011

When a person applies for a loan to purchase a home one of the first things the lender wants to look at is their credit score. Sometimes this comes up with a zero score. This does not mean that the person has a bad credit record. There are many reasons this might occur and he or she may need a no credit check mortgage.

It is possible to have paid all one’s bills on time, worked steadily, have a bank account and still have a record of bad credit. How is this possible? It is possible if a person has paid cash for all purchases and never had a credit card or charge account. When this happens they do not show up on the credit bureau’s records as a good risk.

In addition, if one has had a private income of some sort and no steady work record this means there is no income history. Both a good credit score and income history are required by any lender before processing a mortgage. This is part of the procedures of obtaining this type of loan. A good credit score plus good income record equals mortgage approval. Not having these records means, as a general rule, no mortgage approval.

With today’s massive flux of foreclosed homes most lenders are very cautious about issuing new mortgage loans. They have incurred massive losses on loans they have made to these homeowners and are leery about lending to anyone who is not sterling on a payment and income record. Unfortunately, that usually applies to all applicants regardless of the circumstances.

A credit check cannot be run without a person’s permission. It is possible to tell a prospective lender that a credit check is not permitted. This will cause many to stop right there but, by looking around, it is possible to find a lender who will grant a mortgage.

A lender is perfectly capable of checking other aspects of a person’s financial situation and can soon determine if there they have assets. When dealing with this type of lender there will probably be a higher interest rate, fees, points and a higher down payment than in a regular home financing situation. For this reason it is always a good idea to shop around if the first person contacted seem unreasonable.

Purchasing a home involves more than just a down payment and monthly payments. It also involves paying property taxes and home insurance. That, plus monthly upkeep such as needed repairs, garbage and possibly a gardener need to be figured into the total monthly cost. After adding all the expenses and breaking it down into twelve equal payments the amount should be compared against what a monthly rent payment would be. Sometimes the price of the house, especially a foreclosed one, is low enough that it equates out to a cost much less than renting. If this is the case than one should take advantage of the moment and make the purchase.

There is no better feeling than owning one’s own home, even if one is making monthly payments. Being able to make any changes desired without having to ask someone’s permission gives a great sense of independence. Getting a no credit mortgage will make this dream come true.

Category: Home Loan

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