You may have been saving to buy a home for a while now but have no credit history or perhaps you have had a bankruptcy and wonder if it's possible to ever buy a home at this point. Yes, it definitely is possible to still buy a home even if you have no credit at all or have bad credit. It's not easy and it will need for you to do some work to obtain it, but there are ways to still buy a home even without the best credit or even any existing credit.
No Credit
If you have no credit at all, which means you never applied for a credit card and made payments to it, or gotten a loan to pay for school or even a car loan, then you haven't built up any credit. You don't need to put yourself into debt in order to build up credit, however. You mostly need to prove you are able to make payments on time, every month and have a history of doing so. How can you do this? Well, you can do this by showing your mortgage lender or bank that you can make these important payments every month.
You can show you pay your monthly rent on time, you pay utility bills every month, your phone, cable or cell phone bill, school tuition or childcare costs and even your insurance premiums for your car or life insurance premiums. This proves you are a good risk to pay the loan back.
You are more likely to get a mortgage from any lender if you have a good down payment too. You should also never attempt to buy a home where the mortgage payments will be more than half of what you earn.
Bad Credit
It can be difficult to buy a home when you have bad credit or have had a bankruptcy but it's not impossible. First, check for any errors in your FICO score. It is possible that there are items on your score that should have cleared away or should not appear there at all. If you can have any errors removed, it will increase your score and your chances of obtaining a mortgage.
When you have a low credit score, make sure you have a higher down payment and prepare yourself to pay more interest on any loan you will get. When you have a low credit score, you will be deemed a higher risk and mortgage lenders are less likely to give you good rates. You can also contact a low credit score lender or purchase a HUD home in which they take into account lower incomes and those who might have suffered a bankruptcy.
