Most people realize that home loan lenders do not typically issue mortgages unless they meet all the eligibility criteria. One vital requirement of getting a home loan is your credit. As a result, people that have no credit might face challenges trying to get approved for a home loan. If you fall into this category but want to buy a house, can you? Are there options? There are two main options to consider if you want to purchase a home but have no credit.
1. Find a Lender that Considers Other Factors
The first option is to look for a lender that does not base loan approvals on credit scores. While most lenders factor in credit, some offer other options. For example, you might find a lender that will consider your entire situation, such as your rental history, utility payment history, and more. If you have a history of paying your rent, insurance, and utilities on time, the lender might approve a loan for you, based strictly on these things. If you can find a lender like this, they will also consider your down payment amount, income, and job.
2. Buy a Lease-to-Own Home
The other way you can buy a house without having any credit is through buying a lease-to-own home. If you are not sure what this is, talk to a real estate agent. An agent will explain that this is a deal where the home seller holds the mortgage for you instead of you getting a mortgage through a lender.
To buy a house like this, you must give the seller a reasonable down payment. After that, you make monthly payments to the seller. You get to move into the home and live in it as though it is yours. You might not be allowed to make major changes to the house without the seller's approval, though. Within a specific time, you must get a loan to buy the house outright. You will usually have at least five years before you must do this, but you can find deals that last longer than five years.
These are two ways to buy a home with no credit, and you can look into both of these options. If you have questions about buying a home without any credit, talk to a home loan lender. You can also learn more by speaking with a real estate agent in your area.