Friday, November 19, 2010

How do I get a mortgage loan with no credit?

It is my dream to own my own home. But all I here about is credit scores and stuff. I don't have bad credit or good credit I don't have any at all. Is it possible for me to buy a home?How do I get a mortgage loan with no credit?
Answer this question:

1) Would you lent your car to a stranger who says: I will bring it back?

Banks wants guaranty that you can pay back there money.

To be totally sure go to a bank and ask for information.How do I get a mortgage loan with no credit?
Talk to a couple of different lenders is the only way to find that out.

You could build credit by going to your bank and applying for a small credit card and use it for gas or typical things you buy during one month and pay it off in full each month. Over the period of one year , you will have established credit. Make sure you pay it as soon as the bill comes in and don't pay late. You want good credit not bad credit.
I don't know what they do in the UK, but in the USA we need more than the house to be able to give you a mortgage.

Your credit, income, debt ratio and assets/reserves must meet our guidelines.

Your credit score should be a minimum of 650 today. Your interest rate will be dependent on this and some other criteria.

Your debt ratio should ideally be 28% of your monthly gross income to mortgage and a total debt load of 36%, but that's a bit optimistic. The higher your credit score the more we'll allow for debt ratio, but 40% is what the very best credit will get you at the most.

You need money for a down payment of 10% to 20% of the purchase price (FHA only requires 3% for most loans), closing costs, and at least 2 months of reserves. You need a work history of at least 2 years.

So why don't you have any credit? Are you only 18 years old? Have you pulled your credit reports and scores? Do that if you haven't. Get a credit card. You don't have to carry a balance, but use it once in a while for some small item and pay them off so you don't have to pay any interest. We don't care if you pay it off or carry a balance, as long as when you do make a payment it's on time. The balance does count in your debt ratio, but that's all.

Manual underwriting means a human being looked at it. Most loans are done by desktop underwriting, but unless they're auto declined, a person still looks at them. Without the basic requirements, you might try a small local bank where they've known your family for the past 80 years. Maybe they'll be willing to take a chance on you, but strangers won't.
I have some information for you :

You've heard the mortgage lenders barking their bad credit, no credit loans on television and radio. ';Even if you have been turned down by another lender, you will be accepted by XYZ mortgage no matter what kind of credit history you have or what crime you've committed. We refuse no one because everyone is human, subject to bad breaks once and awhile. Why should you be penalized for circumstances beyond your control.'; Their pitch sounds too good to be true, and oftentimes it is.

Bad credit, no credit loan programs are primarily aimed at people with bad or no credit history. In exchange for the added risk a lender assumes on the loan, the borrower usually pays a sub-prime, higher interest rate. Common sense should remind the borrower with bad credit that applying for future credit gets harder, not easier. Repairing ones credit history should be paramount to re-entering the conventional credit and mortgage loan market.

Most people with a bad or no credit history should be fortunate that such loan programs exist. But they should also realize that such loans usually carry high interest rates and/or points. (A point is one percent of $200,000 or $2,000.)

A typical profile of a bad credit risk would be the following:

* DTI (debt to income ratio) of 50% or higher

* FICO (credit history) score of 620 or lower

* Low LTV (loan to value ratio)

* Little to no discretionary income

* Bankruptcy within past 60 months

* Two or more 30-day delinquencies over the past 12 months

* One 60-day delinquency over the past 24 months

* Foreclosure over the past 24 months

Some mortgage lender spokesmen claim that current rates for bad credit risks are the same as good credit risks and that times have changed for the credit compromised borrower. But it's not as easy as they claim. Borrowers should be aware of the differences between ethical and less than ethical lenders. Some unethical lenders use predatory practices that corner the borrower and saddle him with excessive rates or points.

The borrower has recourse against less than scrupulous lenders. The Home Ownership and Equity Protection Act of 1994 protects the borrower from lender malpractice. This act provides legal protection for the borrower in case the lender is found to have used deception and misrepresentation in the act of selling a loan. The Truth in Lending Act (TILA) sets new rules and regulations against lenders attaching excessive high rates and fees to certain types of loans.

It seems that more of these bad credit, no credit loan programs are populating the airwaves with claims of instant mortgages for borrowers. But just as the lender should beware of exposure to bad credit risks, the borrower should also beware of lenders with usurious or excessive rates tied to high-risk loans.

You can find more information about loan here

Right i'll get loads of td's here, but as someone who had no chance of borrowing a quid from the bank, i mananged to get two mortgages very easily.

(I'm talking UK here)

The best way for anyone to get a mortgage is to use a mortgage broker. It will cost you up to 500 quid, one off payment, but it's worth it. I know people with no experience will td this answer, but i can quite honestly tell you that ANYONE can get a mortgage.
There was a time when there was no credit score and loans were made by checking on your work history, current job, contacting your landlord, checking with local utility to see if you pay timely.

There are some places that still do this, it is called manual underwriting. You will need to look around for places that do this. Check out churchhillmortgage, I've heard that they do loans this way.
Get a credit card from local bank and pay it in time. You also can use this service to avoid common mistakes while buiding credit and pre-estimate future scores for different scenarios of payments -
Getting a mortgage from a bank is only one way to buy a home. You can also do owner financing or lease options.
  • home theater
  • fish
  • No comments:

    Post a Comment