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Can I Get a Mortgage Without a Credit Score?

Can I Get a Mortgage Without a Credit Score?

September 18th, 2019 | Preapproval, Purchasing a Home, Credit

You need a good credit score to get the best rates on mortgage loans. Less-than-perfect scores will mean higher interest rates and subprime credit scores will make borrowing money very expensive. But what if you have no credit score at all? Is it possible to get a mortgage without a credit score? 

The Credit Score-free Population

According to the Consumer Financial Protection Bureau (CFPB), there are approximately 26 million American adults without a credit history and another 19 million whose credit histories are too outdated or limited to be scored with the traditional methods by the credit bureaus.  That accounts for 18% of the U.S. adult population. 

Some of those without credit scores are recent immigrants who have not yet established credit in the U.S. Others have chosen to use cash for purchases, instead of credit cards and other loans. Still others are the younger and have not had enough experience with credit to have a score. And some people may have open credit card accounts but have not used them for so long, that there is no longer any relevant data to score. Whatever your reason for not having a credit score, there may still be ways for you to qualify for a mortgage.

Qualifying without a Score

If you have a nontraditional credit history, you still may be able to qualify for an FHA home loan. This government-backed mortgage program allows lenders to use other documentation to verify your creditworthiness. 

You will need to provide at least 12 months’ worth of payment information for rental payments. In addition, you should provide as much documentation as you can on things like your monthly utility payments and car or renter insurance. You could also include payment history for your cell phone bills, internet/cable bills, school tuition, or childcare payments. 

In order to be seriously considered, all these accounts need to show that you have been consistently on time with your payments and that you are not in collections for any debt.  Lenders will also look closely at your debt-to-income ratio. Your debt should definitely be lower than 50% of your income. The lower the better. You will also be required to have enough cash reserves on hand so that after you close on your mortgage, you will still be able to pay for one month of mortgage payment in addition to your other expenses.

Finding the Right Lender

Even if you have a stellar nontraditional credit history, not all lenders will be willing to work with you. Processing all that paperwork requires manual underwriting and some lenders will not consider it worth the effort.

While it may require a little more work, if you have a history of timely payments, you may still be able to obtain a home loan. Coupled with little or no debt and a good pile of savings, you can show lenders that you are a responsible borrower, ready to take on a mortgage.

Call us today at 702-780-1500 to discuss all of the mortgage options that are available to you.

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Cornerstone Mortgage

MAIN OFFICE:
5940 S. Rainbow Blvd., Suite 201
Las Vegas, NV 89118
(702) 840-1500
NMLS ID 340311
NV: DML License: 4814
CA: DBO License: 60DBO100130
CA: DRE License: 01848420

NEVADA:
5940 S. Rainbow Blvd., Suite 201
Las Vegas, NV 89118
(702) 840-1500
NMLS ID 340311
NV: DML License: 4814
CA: DBO License: 60DBO100130
CA: DRE License 01848420

CALIFORNIA:
1500 Standiford Ave., Suite A1
Modesto, CA 95350
(209) 578-9000
NMLS ID: 1741490
CalDRE License: 01848420

319 E. Mian St.
Turlock, CA 95382
(209) 633-3222
NMLS ID: 1739798
CalDBO License: 60DBO100691
CalDRE License: 01848420

HAWAII:
91-110 Hanua St., Suite 201
Kapolei, HI 96707
(808) 784-1239
NMLS ID: 1669660
HI: MLOC Liense HI-340311

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Cornerstone Equity Group, Inc., dba Cornerstone Mortgage is an equal opportunity lender.

Nationwide Multistate Licensing System (NMLS) ID: 340311. Additional NMLS branch licenses: 1739798, 1741490, 1669660.

Cornerstone Equity Group, Inc., dba Cornerstone Mortgage is licensed by the Nevada Division of Mortgage Lending, license number 4814.

Cornerstone Equity Group, Inc., dba Cornerstone Mortgage is licensed by the California Department of Corporations under the Residential Mortgage Lending Act and Finance Lenders Law. CA Finance Lender #60DBO100130.

Cornerstone Equity Group, Inc., dba Cornerstone Mortgage is licensed by the California Department of Real Estate, License number 01848420.

Cornerstone Equity Group, Inc., dba Cornerstone Mortgage is licensed as a Mortgage Loan Originator Company by the Hawaii Department of Commerce and Consumer Affairs, license number HI-340311.

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