No Credit Mortgage – Recent Graduates Buying a Home
Posted on | September 20, 2009 | No Comments
Getting a no credit mortgage is not an easy task. In all reality it is almost impossible but that does not mean if you are a recent college graduate that you cannot buy a home. If you have been in school and have been paying some types of bills that are in your name it is likely that you have built up some type of credit. If you walk in to a mortgage lender and tell them that you have no credit whatsoever you are going to be walking down a long road to get a home mortgage.
As stated earlier, if you have paid any bills in your lifetime that have been in your name you have built some type of credit. Even if it is a cell phone or an electric bill, by making these payments on time and in full you are proving to financial institutions that you are starting to be a good borrower of money. This does not mean that you have a credit score above 740 and you qualify for a mortgage rate under 5% but it does mean you have a credit score.
If you want to get a low mortgage rate you are going to have to build your credit score to 740 or better. The closer your credit score to 850 the better off you will be when it comes to borrowing money. If you recently graduated college and you have never had a full time job it is likely that you do not have a lot of money coming in. This means that you cannot make large purchases and pay them off quickly. What you can do is get a credit card and make small purchases with it. Make sure to pay the credit card off each and every month to increase your credit score though.
I would encourage all recent college graduates to buy a credit report and see what it shows. If you have student loans or any lines of credit you are going to see that illustrated on the credit report. You might find some payments that are due that you didn’t even realize you had. It is best to clear this up as quickly as possible as this can hinder your credit score. Most credit reports are about $15 but it is money well spent.
If you think you have no credit you might want to think again. If you have paid for anything that is in your name you have built some type of credit. This can go a long way when it comes to getting a home mortgage. The best thing you can do is build your credit score as much as possible so you can lock in at a low mortgage interest rate.
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Author: Mike Garner
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