Credit is not something you suddenly acquire out of nowhere. Instead, having credit requires work and time. If you do not have any credit right now but want to buy a house, you might think you won't be able to. While it might be more difficult for you to accomplish this, it's not impossible. If you're in this position, here are four tips that might help you find a way to buy a home with no credit.
Offer a Large Down Payment
One reason that lenders hesitate with issuing loans to people with no credit is due to the risks involved. If a person hasn't proved they are creditworthy, how does the bank know if he or she will make the payments? The bank doesn't know this, so issuing the loan is risky for them. You can reduce the risks, though, by offering a substantial down payment. If you are willing to invest a large sum of money into a home, you probably won't want to lose the money. Therefore, the risk level significantly drops when you provide a substantial cash payment upfront.
Choose an Alternative Type of Financing
A second option you have is to choose an alternative type of financing to buy a house. For example, you could buy a house on contract. In this case, the owner of a house sells you the property through an unconventional method. The seller keeps the loan and acts as a bank. You pay the seller like you would pay a bank if you got a mortgage. Eventually, you would have to get a loan to buy the house, but you would have time before you had to do this.
Use a Cosigner
A third option you could consider is using a cosigner. If you have a loved one willing to sign the loan, the bank will base its decision on his or her credit. If the person has excellent credit, you should have no problem getting the loan.
Following these tips may help you successfully buy a house if you have no credit. The good news is that you can build your credit by using any of these methods. Therefore, you might have a much easier time getting a loan in the future if you buy a home now, even if you have no credit. Talk to a lender today to learn more and hire a real estate agent to help you find a house to purchase.