How to Get a Mortgage Without a Credit History

Many people fall for the myth that you need a credit score to survive in life, and one of the main things that people want a credit score for is getting a home mortgage. Many will then go deeply into debt just so they can buy a house with a mortgage, only to find themselves in a mess. However, it is possible to get a home mortgage without having a credit history at all! Here's how.

First, if you have a credit history and there is anything bad, clean it up now. While you can get a mortgage without a credit history, you probably can't get one (at least not with a reasonable rate) if you bad items showing up on your credit. Pay off everyone you owe.
Pay all your non-debt bills on time every month and avoid all debt. Give your landlord his check early every single month without fail. Setting up an automatic bill pay may help you with this. However, make sure you remind yourself in your calendar to make sure that the automatic bill pay worked each and every single month.
Maintain a steady job history. So, don't just bounce from one job to the next. It's fine to change jobs or careers, but make sure that you will be able to convince the mortgage company that you have a steady income.
Save up a good solid down payment. This is always good regardless of whether you have a credit history or not.
Call around to mortgage brokers and ask them if they do "manual underwriting". Manual underwriting is the term used to describe when the mortgage companies actually look at relevant facts (your income, your assets, your timeliness in paying your bills, etc). If the mortgage broker doesn't do manual underwriting, hang up the phone and call the next broker.
Once you find a broker who does manual underwriting, explain the situation and explain that you just don't do consumer debt, and give the broker proof of all relevant financial information. If you are qualified, then you will be able to get a home mortgage, although you have no credit history at all. (Also, you may find brokers who do manual underwriting to be more friendly, since those brokers who care about their clients are more likely to get into the slightly more difficult area of manual underwriting.)

Copyright 2009 by Michael Nehring