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As a result, borrowers with no credit history or low credit scores may struggle to receive mortgage approval.
Is It Possible to Buy a House With No Credit?
If youve never had a credit card or a loan history, you wont have any credit.
Parents, family members and friends most commonly act as co-signers.
Co-signers with strong credit can help you get approved for loans that you wouldnt have received without their help.
And, if you fail to make payments, it can fall onto them.
As a result, it may be difficult to find a co-signer for a substantial loan like a mortgage.
Apply for a Subprime Mortgage
Subprime mortgages carry higher interest rates than prime mortgages.
Its important to consider your interest rates impact on your monthly payment.
Lets look at an example of a 30-year mortgage with different interest rates.
FHA loans are often more lenient than conventional mortgages, and offers manual underwriting options.
This can make it easier to be approved for a loan.
VA loans by definition dont have a minimum credit score, though some private lenders offering the loans may.
USDA Loans
Low-income or moderate-income buyers in rural areas may be eligible for USDA loans.
These loans haveno-creditoptionsfor buyers that require manual underwriting to assess the willingness and ability to make the loans payments.
USDA loans dont require any down payment, and offer competitive interest rates.
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