Needing a no score loan is a good thing and something to be proud of! You’ve worked really hard to pay off your debt, but still need a way to make homeownership a reality. It’s a great problem to have! No score loans are available if you have reached the point of being debt free and your credit score has become obsolete.
While it’s true that getting a home loan without a FICO score can be more difficult, it’s not impossible.
In general, no credit score loans:
- Require more documentation
- Traditionally take longer to go through the typical underwriting process
- May require a significant down payment, and require you to take precautions in the event the program is no longer available.
Despite these initial challenges, the end result of owning your home is well worth the extra time and effort. It's key to know that not every lender provides a manual underwriting service for no score (or zero score) loans, but at Churchill Mortgage we are experts at no score loans and provide manual underwriting on a regular basis for our customers needing this service. Our goal is to not only help explain the home buying process in greater detail, but to also help you prepare and protect yourself accordingly.
Here’s what to do if you don’t have a credit score due to paying off debt but wish to purchase a home:
- Make sure you have four alternative credit tradelines, with one being a rent or lease payment. Contact the creditors and get a letter from each of them on their letterhead showing your name, account number, and information stating your account has been "paid as agreed for the last 12 months." This is usually a good start, but further documentation could be required from the creditor.
Become a Churchill Certified Home Buyer before you start looking for a home. By going through this process, you’ll better understand the price range of the homes you can afford. This way you don’t get your hopes up and get emotionally attached to the home of your dreams, only to wait 45 days and find out you cannot get approved.
- Work with an experienced real estate agent who can help you find a home that you love in your price range, help you negotiate the contract and can walk you through the home buying process.