You don’t need a credit score to buy a house. You read that correctly!
It’s called manual underwriting and Churchill Mortgage is one lender that manually underwrites a home loan for someone with no credit. We have used Churchill Mortgage for two refinances and the purchase of our latest home, they are amazing to work with. I was recently talking with Roger Wightman of Churchill Mortgage and I asked him directly about a no credit score home loan.
Roger explained that a 15 year mortgage with at least a 10% down payment for someone with no credit is the way to go. He said you could actually get a better rate then someone with a credit score in the same scenario. He said Churchill had to structure their system to meet what Dave Ramsey preaches his listeners. He explained that a person with no credit score could get a 30 year mortgage with Churchill; but will have almost a whole percentage point more than someone with a credit score. So you are rewarded if you follow Dave Ramsey’s advice and get a 15 year mortgage with at least 10% down.
So what you need to qualify to get a 15 year loan without a credit score. You need the following.
· 10% down
· A history of paying your rent on time (an actual rental agreement, not paying your parents to stay at home)
· A good work history
· At least three bills you pay. For example auto insurance, cell phone bill, water bill, electrical bill, etc.
Why choose a 15 year mortgage. You save thousands of dollars of interest by paying a bit more each month on a 15 year mortgage compared to a 30 year mortgage. When we switched to a 15 year mortgage last year, I could not believe how much principal we are paying off each month. In all the years we have owned a home I have always done a 30 year mortgage. Now I see the wisdom of a 15 year mortgage. In summary you don’t need credit score to buy a house. You just need good financial habits.
If you need help. I am accepting new financial coaching clients. The first session is free. Please contact me at info@mcfas.com for more information.
