There are people who own cars and rent apartments that have no credit whatsoever. People who pay cash for everything they buy might have no need for credit cards or loans, so they might not have the chance to build their credit. If you are in this situation and want to buy a house, is it possible to get a loan if you have no credit? While it might be more challenging to buy a house without credit, it is not impossible. Here are several things to know that might help you qualify for a loan.
Evaluate Your Financial Situation
The first thing you should think about is your current financial situation. How much money do you have in the bank that you can use for a down payment on a house? How much debt do you have? Do you make decent money? If you have a positive financial position, you will face fewer challenges as you try to get a loan. A bank will more willing to lend you money to buy a house if you can put 20 percent or more down on it. If you have no money to use for the down payment, it will likely be more difficult to get a loan.
Consider an FHA Loan
Next, you might want to talk to a lender about an FHA loan. The FHA program helps people become homeowners, and the criteria to qualify is less strict than other loan programs. In fact, you might qualify for an FHA loan even without credit. The lender might factor in your financial situation only. If you stand in a good place, they might approve your loan.
Buy a House Through a Rent-to-Own Program
One more option to consider is buying a house through a rent-to-own program. Through this option, you will not need good credit. You will not need any credit because you will not get a mortgage loan. Instead, you buy a house directly from a homeowner. The homeowner finances the loan to you for a period of time. When this period ends, you must get a loan. The benefit is that you have time to build credit during this time.
These are some options you can consider if you want to buy a house without any credit. If you are interested in learning more about the potential no credit financing options you might be eligible for, talk to a lender today.