It's one thing to have bad credit, but it's another thing to have no credit. Credit is one of the things that banks and lenders look at to determine your eligibility for a loan. If you have bad credit then it shows a lender that you may default on your loan, which means that you are a high-risk buyer. If, however, you don't have any credit then lenders don't have much to go off of which means that traditionally they are less likely to lend to you. Before you think that you will never be able to own a home because of your lack of credit, there are a few things for you to know.
1. Go With a Local Credit Union
Local credit unions tend to work more with people with little to no credit compared to larger banks. As long as you have things like proof of income, taxes from years before, and a few other financial things, they may be able to provide you with a home loan at a little bit of higher interest rate.
2. You May Qualify for an FHA Loan
Loans from the Federal Housing Administration (FHA) are a great option for first time home buyers, buyers with a small down payment, buyers with poor credit, or buyers with no credit. These types of loans are government-funded loans that tend to come with a fairly low-interest rate, but then you have to pay mortgage insurance every month. This mortgage insurance is usually a couple of hundred dollars but it essentially ensures that the government won't lose money if you default on your loan.
3. You Can Have a Cosigner
If you don't qualify for an FHA loan or if you can't afford to pay the mortgage insurance involved in it, then another option for you to consider is getting a cosigner. When you have someone else sign on a home loan with you, they are showing the lender that if you were to default on the loan that they would take over the payments, which gives lenders peace of mind. Just make sure that you go with a consigner that you are close with, someone that you can trust, or someone who has good credit.
To learn more about no credit financing, reach out to some no credit financing services in your area to see what kinds of options they have to offer.