Profile picture for LAGirl81

High debt-to-credit ratio vs limited credit history

My fiance and I are looking to buy a house together after the wedding. One of us has a credit-to debt ratio that's a little high; the other has paid cash for pretty much everything their entire life (no student debt, no car loans, no credit cards until earlier this year), and has a limited credit history. 

Which is worse?

We have a good income between the two of us and I've got an inheritance that will cover the down payment. What can we expect?
  • November 30 2013 - New Orleans
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Answers (5)

Profile picture for wetdawgs
More than a year has passed since you posted this.   How has everything gone in the past year?

  • December 04 2014
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Congratulations on your upcoming wedding and exciting new chapter in your life. I would say your best strategy is to work towards getting the no credit situation up to a good credit score of 640 or better. This actually is not as difficult as it may seem especially if you're working with a good and knowledgeable lender. Also an experienced lender can help you with strategic approaches such as what if any debts you should pay off and how best to utilize the funds that you have saved up. It sounds like you guys are in a great place you just need to make a plan and I believe it all pulled together for you, Again congratulations and happy house hunting!
  • December 04 2014
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If you have scores above 640 it won't matter you credit history that much. You just need a AUS DU /LP approval and that is easy to get. Some lenders have overlays and require more credit but FHA doesn't nor do I. I only lend in CA though.
  • December 11 2013
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How high is your credit-to-debt ratio? Also, in the event a borrower does not have sufficient credit on their credit report there are lenders that will allow substitute forms. Some of these substitute forms are known as non-traditional credit which is judged by rental housing payments, utility company references (gas, electricity, water, cable, etc.), school tuition, automobile leases, insurance premiums, retail store credit cards, and a documented 12 month history of savings from a bank. These are all ways in which a lender will review your credit without actually having credit, but not all lenders will accept this. Either way, the best thing for you to do is to speak with a lender directly to see if you can get started on financing a new home. There are lenders like myself that would be glad to speak with you to help you get the loan that you need. Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me!

Good Luck
  • December 02 2013
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Profile picture for kittenonkeys
My recommendation is that you meet with a mortgage originator at either a mortgage company or a locally owned bank.  When you call to make the appointment, ask for some time to meet with them to discuss options.   I work with a number of good people in Central Louisiana who will take the time to counsel and work with buyers to get them to the point they can buy.  I'm working with a couple now who started in July, but had to establish some credit history.  The mortgage originator told them how to go about doing that in the fastest manner possible.  Best wishes!
  • November 30 2013
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