Posts tagged: no credit check home loans

No Credit Check Home Loans

No credit check home loans, huh? I guess it’s worth a shot; you’re thinking “somebody out there on the worldwide web must offer a home loan that doesn’t require a credit check at all.” Well, I’m not going to say that there is definitely no such thing, but it’s going to be a lot tougher to get than a $5000 loan no credit check. Let’s talk about it.

If a lender doesn’t check your credit before giving you a home loan, on what criteria could they possibly qualify you?

Okay, that’s actually a fair question. Let’s put ourselves in the shoes of the lender, and pretend that we are trying to decide whether to give a person a home loan without looking at any kind of credit history. What criteria could we use?

1. The down payment. Not only will the down payment reduce the risk to the lender, it says something significant about the prospective borrower. It means they’ve saved money over a period of time, and probably a substantial amount of money. If possible, I’d like to get records of deposits going back several years to see how much they’d be setting aside each month, and how consistently they did it. That way, if I couldn’t see a record of payments they’d made to creditors, I could at least see a record of unforced payments made to themselves. That would be a good indicator of their credit worthiness.

2. The income statement. I’d have to know that they’re monthly income could more than support the monthly payment on the loan I’m giving them, even if I had the record of their excellent savings habits.

3. The debt statement. This is close to a credit history, but I’m not even wanting to see a track record of payments. I need to know what their monthly debt service is so I can do the simple math and decide whether the new loan payment is going to overload them.

4. Serious personal references. I’d have a loan processor call at least 5 to 10 people that are both impartial and know the person well enough to say whether the applicant is credit worthy. I’d be looking to hear that the applicant is one of the most disciplined, responsible people they’ve known.

With those four criteria in place, I suppose you could theoretically give somebody a home loan with no credit check. But I’m afraid you’re still dreaming. It’s never going to happen. The best thing you can do is apply for a bad credit home loan. Those really do exist, but guess what? The first three criteria I mentioned above will be a major factor in that process as well, so you’d better make sure you have them in line if you want to buy a home and you have no credit or bad credit.