Home › Questions › Home Loans › How to Get a Home Loan with No Credit?
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September 30, 2024 at 4:44 pm #1014
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KeymasterSeptember 30, 2024 at 4:53 pm #1024Kikoff
KeymasterIt is pretty difficult to get a home loan or even any type of loan without a credit history. Lenders rely on your credit history to assess whether you have a reliable borrowing and responsible financial history. However, if you find yourself in this situation (for ex. if you are an international student or just came to the US), there are still some steps you can take to secure home loans.
Options for No Credit History:
- FHA Loans: The Federal Housing Administration (FHA) are government-backed loans, these loans are designed for individuals with bad credit or for those with no credit history. FHA loans usually have more flexible requirements compared to other types of loans. If you can showcase proof of stable income and a good payment history on other recurring bills such as utility bills or rent, you would be able to qualify for FHA.
- Build Alternative Credit: There are alternative methods to build credit, such as building credit using on-time rent payments, utilities, and other types of recurring payments. Some third-party apps allow you to report your past recurring payment histories to build credit. You can also directly showcase these bills to some lenders.
- Use a Co-Signer: Find and use a co-signer with a strong credit history and high credit score to improve your chances of securing a loan. However, note that the co-signer will be responsible for your loan if it is not paid on time.
- Make a Larger Down Payment: Putting down a larger down payment also shows the lender more reliability. A larger down payment reduces the amount that you have to borrow and shows the lender that you are committed to purchasing the home.
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Conclusion
While it’s hard to secure a home loan with no credit, it is not impossible. There are alternative loan options available for borrowers such as the FHA loan, however, these are usually not ideal options due to bad terms and high interest rates. It is still important to establish a good credit score to secure better deal loans. Start using Kikoff to build your credit so you can secure more loans and better deals in the future!
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