Your credit score affects many parts of your life, including the ability to get approved for loans. Buying a house is probably the hardest thing to do if you have no credit, as homes cost a lot of money, but it is not impossible to make this happen. With the right steps, you might be able to buy a home with no credit to your name. Here are some tips to help you learn how you can accomplish this goal.
Offer a Large Down Payment
If you have spent the last few years saving your money, you might have a decent amount in your bank account. With a lot of money in the bank, you could have a higher chance of getting approved for the loan. You must be willing to offer this money as a down payment, though. When you provide a large down payment, you instantly have equity in the house.
People with equity in their homes have an incentive to work hard to keep their houses. They do not want to lose the equity they worked hard to build up. If you apply for a loan and offer a lot of money for the down payment, your lender will view this favorably. As a result, the lender might approve you for a loan, even if you have no credit.
Get a Cosigner
The second tip to follow is to get a cosigner. A cosigner is a person who provides a signature for your loan, but that is not all. This person also agrees to pay the lender if you fail to make the payments. When you have a cosigner, the bank looks at their credit. If the person has excellent credit, the lender bases the loan decision on the person's score. As a result, you might get approved for a loan if this person is willing to sign the loan with you.
Buy a House on Contract
If you cannot use either method listed above, you could consider buying a house on contract. Making a house purchase on contract does not require a credit check or good credit. You may assume some risks in the deal, but this method allows a person to buy a house without having credit.
Are you interested in learning more about home loans? If so, talk to a real estate agent or lender to find out if you can get a loan without having any credit.