What does it mean to have little to no credit as a borrower?

Having no credit history means a borrower doesn’t have enough of a credit history for credit bureaus to determine the likelihood that they will pay back borrowed money. If a borrower has no credit, it does not automatically mean they cannot apply for a mortgage. There are programs out there for borrowers in this exact situation.

Mortgage Options, Inc. offers a Flexible Financing with Low Down Payment Program. This program is for applicants with little to no credit. Here’s how the program works! If they have no credit, a borrower just needs to have 3.5% down payment and have at least 3 non-traditional credit lines for at least 3 months.

To establish 3 non-traditional credit lines, the borrower must have 3 references and at least one of the following:

• Rental housing payments (subject to independent verification if the borrower is a renter)
• Telephone service
• Utility company reference (if not included in the rental housing payment)
  • Gas
  • Electric
  • Water
  • Television Service
  • Internet Service

If the mortgagee cannot establish credit using the references above, they may also consider using:

• Insurance premiums that are not deducted through payroll (medical, auto, life, renter’s insurance)
• Payment to childcare providers such as daycare
• School tuition
• Retail store credit cards
• Rent-to-Own payments (like furniture or appliances)
• Payment of medical bills not covered by insurance
• A 12-month history of a savings account with regular deposits resulting in an increased balance in the account.
  • Made, at minimum, quarterly
  • Not payroll deducted
  • Caused no nonsufficient funds (NSF) checks

• An automobile lease
• A personal loan from an individual with repayment terms in writing and canceled checks to support documentation of payments on the loan.
• A 12-month history of borrower payment on the account for which the borrower is an authorized user.

Using these references to establish credit worthiness, Mortgage Options, Inc. can help a borrower secure the mortgage they need to get started on the path to homeownership. If you have little to no credit and are thinking there’s no way you can become a homeowner, contact us today!

Giving you more options with Mortgage Options, Inc.