This ARTICLE On Mortgage Without A Credit Score Lending Guidelines Was PUBLISHED On July 1st, 2020
Most Americans understand that obtaining a mortgage has a lot to do with your credit score.
- It is estimated that one in five Americans do not have a credit score
- The CFBP or Consumer Financial Protection Bureau calls not having a credit score, “credit invisible”
- They estimate that over 26 million American adults do not have a reporting credit score
- In this blog, we will detail how to buy a house if you do not have a credit score, reasons you may not have a credit score, and how to obtain a credit score if you have time
In this article, we will discuss and cover qualifying for a Mortgage Without A Credit Score Lending Guidelines.
Mortgage Without A Credit Score Lending Guidelines During The COVID-19 Pandemic
Even during these crazy times of the COVID-19 coronavirus, Gustan Cho Associates are still funding mortgage loans at a rapid pace.
- We are extremely busy and here to help with your mortgage needs
- We do not have any LENDER OVERLAYS
The team at Gustan Cho Associates is available seven days a week, evenings, weekends, and holidays to assist you with your mortgage needs.
Reasons Why Borrowers Do Not Have Credit Scores
The reason you do not have a credit score.
- The main reason Americans do not have a credit score is they have not applied for credit
- The earlier you do this in life, the better
- Having long seasoned tradelines can only improve your credit score, assuming they are paid on time
- If you do not have a reporting credit score, it can be difficult to obtain even a simple credit card
- Some individuals may only have medical collections reporting to the credit bureaus and not produce a credit score
- Some Americans have not used credit in such a long time that they do not have a score reporting
- Credit scoring mirrors the motto “use it or lose it”
- It may sound backward, but you must use credit to have a credit score
- Someone who is financially secure and pays for everything in cash may not have a credit score
- Which can be a disadvantage when looking to buy something with credit
There are non-lending opportunities based on credit as well. For instance, many jobs require a credit check before you will be hired. Having a credit score is more important than ever.
How To Obtain A Credit Score
How to obtain a credit score?
- Many individuals do not have a credit score because they have not applied for credit in their life
- You may be new to the country or just becoming an adult
- You will want to establish trade lines that report to all three credit bureaus as early as possible
- Your credit score can help you in life
- Whether it’s buying a car, paying less interest, or obtaining a mortgage, credit scores are very important
- If you are having trouble opening a credit card because you do not have a credit score, it’s usually in your best interest to obtain a secured credit card
- Typically, you pay your bank a few hundred dollars and they give you a credit card with a limit of that amount
They will report your usage and payment history to the credit bureaus. This is one way of building a credit score.
How Can I Qualify For A Mortgage Without A Credit Score Lending Guidelines
Mortgage programs are available if you do not have a credit score.
- Gustan Cho Associates are able to fund FHA, VA, and Conventional mortgages even if no credit score is reporting
- In order to fund a mortgage loan with no credit score is available, a borrower must provide non-traditional credit tradelines
- Non-traditional credit tradelines are when we verify your payment history with bills that do not report to credit bureaus
- Typically you will need to verify at least 12 months of on-time housing payments, usually rental payments
- You will also need to provide a 12-month history of on-time payments for two other bills such as a cell phone or utility bill
- You will need to get a bank print out of the last 12 on-time payments or send in your last 12 bank statements (all pages)
- From this documentation, your mortgage team will complete a credit supplement to verify you have paid these accounts on time
For more a nontraditional credit, please read our blog on NON-TRADITIONAL CREDIT.
Qualifying For A Mortgage With Non-Traditional Credit Tradelines
When utilizing nontraditional credit, your credit score is assumed to be 580 for FHA and VA and 620 for conventional.
- This allows you to put zero down payment for VA, 3.5% for FHA, and 5% for conventional mortgages
- This rate will be based on these credit scores
- With the current market and credit scores in this tear, DISCOUNT POINTS are usually required to obtain a loan
For more information please call Mike Gracz on 630-659-7644. Mike will have a one on one mortgage consultation with you and pair you with a licensed loan officer to complete a mortgage application. Many lenders will tell you they cannot help you if you do not have a credit score, keep in mind this is an overlay and not an agency guideline. We are here to help.
About 75% of our clients have been turned down by their current lender due to lender overlays. If you received a last-second denial or are not confident in your lender, please give us a call today. We are available 7 days a week. We would love to put a second set of eyes on your mortgage application. You may call or text Mike Gracz on 630-659-7644. Email works better, please send an email to firstname.lastname@example.org.
July 1, 2020 - 4 min read