How to own a home with Insufficient credit history
Tuesday, May 13th, 2008| Can you buy a home without having any “Debth” of credit? Yes! if you can build a non-traditional credit history…….What do you do with a mortgage applicant who pays cash for everything? You might rejoice that somebody, somewhere is not addicted to credit cards, however for such an individual to qualify for a mortgage is a problem. Why? They suffer from the anguish of a “Thin File” credit report, a report with so few items that it’s difficult to tell if the borrower is credit worthy.
For a long time HUD and private-sector lenders have allowed what is called non-traditional credit verification and evaluation. The idea is to make FHA mortgages available to borrowers who have little to show on credit reports. The value of such underwriting is especially important for immigrants, many of whom refuse to do business with banks. The reason? Banks back home were not to be trusted. So how do you tell if someone has good credit even if they have too little information for a credit report? You take a look at such things as rental payments, utility bills, insurance coverage, etc. This is a good example of opening to the FHA mortgage program to all who qualify even if qualifying is not quite in the traditional mode. HUD’s complete mortgage letter explains it below. Call me direct with how we can get you looking to buy a new home in Macomb County, Wayne County, Oakland County or St Clair County today even if you have not established a full credit history. |