Profile picture for user920186

I have zero debt, no credit score, almost 30k in savings, make 3.5k/month, Can I buy a house & how?

I've never owned a Credit Card and thus have No Credit.

 Never had to finance anything in my life because I've always just paid cash. I have over $29,000 in my savings account, and have an annual income of over $3500 a month, my question is what loan options do I have if I want to purchase a house? I've worked at the same place for just over four years now and have no intentions or expectations of quitting, being laid off, or fired.  I have a history of good renters credit from landlords for the past 8 years of being out on my own. I just want to know what my options are as a first time home buyer in my late 20's.

I don't want to get a co-signer (my parents) if I don't have to unless it will be required because of my lack of credit all together, They both are about 700 and are both retired with pensions/ 401k/ and a wealth of savings and I want to be able to do this on my own but fear I wont be able to with out a co-signer. I have not applied yet but do qualify for a VA loan as I am an Iraq Vet, but I have not pushed down that path yet to talk with a VA rep as I wanted to get an idea from others possibly in my situation, who have answers and opinions on what the better options might be. 

Any advice would be appreciated, Thanks
  • March 16 2012 - Roseville
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Answers (11)

Profile picture for pmzsteve
Not being in debt may seem like a good thing. But to creditors it is not. They don't make money off people who don't borrow money. Believe it or not, your credit score is a signal to creditors which lets them know how good of an investment you are to them. They are interested in making money off you. That is all.
  • October 03 2013
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Profile picture for user83833971
WHO DOES THE VA LOANS WITHOUT A CREDIT SCORE, I HAVE SEARCHED ENDLESSLY, I HAVE NOT BEEN IN DEBT FOR 10 YEARS, THEREFORE NO CREDIT SCORE
  • October 03 2013
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Profile picture for user956971
First and foremost thank you for serving our country.  Second, I believe you will have to do something to get a credit score.  My son had 72,000 in a trust and all we wanted was $10,000 to buy a house so he could build his credit.  He finally had to just buy the house outright and now he still has no credit and needs to fix some stuff and can't get a loan.  So my advice is to get a credit card, use it and pay it off then maybe you will have a credit score.  Good luck
  • April 03 2012
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I am seeing some good things here. Roseville is my backyard if that is where you are looking, and I have the right lenders that can take care of this for you depending on whether we need to go 203k or not.

I also work with investors, and I am working with a client right now in Roseville who is just like you...buying a cheap property, fixing it up himself, and thus creating some great equity. You should easily build 20-30k equity into a home if done right.

Just contact me directly on Zillow I would love to hear a little more about your situation.

~Chris
  • April 02 2012
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VA does not have a loan program to fix up a home.  You do have 2 options though if you want to buy a fixer, CALVET 97 can be used to fix up a home and also FHA's 203k or 203K Streamline program.

VA is a bit more flexible with unpermitted work than FHA or even conventional.  Their guidelines state that the work had to be done in a "workmanlike manner".  So it all depends on how and what the appraiser calls out.

I do not beleive you will need a co-signer.  a non-occupant co-signer will only help if there is an income issue, not credit.  You just need to provide 3 alternative lines of credit (rent, insurance, utility bills, cell phone bill, etc) to establish your payment history.   
  • March 18 2012
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In my mind your probably more qualified than most people who do have credit! Although, many lenders don't have the brains to figure this out. The fact that you've never borrowed a penny in your life is awesome, and please don't go borrowing now just to get a credit score to get a mortgage.

Steer away from large national lenders many of them won't lend to you without a credit score. Visit some small local banks and credit unions and talk to their mortgage lenders, they will likely work with you. 

No credit score is far far better than a bad credit score. It is a sign of managing money responsibly. So, you should be able to get a mortgage, you'll just have to look in the right places.
  • March 18 2012
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Profile picture for Cindy Quinton
If you wish to look at your credit reports, you can do so for free at annuacreditreport. 

I was able to find some articles about VA rehab mortgages by googling VA rehab loan, but for some reason, I can't post them. It seems like since you have the minimum down you might also be able to look at the 203K  hud loans.

There are often more lenders in the forums on weekdays, you may wish to bump this then. Thank you for your service to our country, and good luck!
  • March 18 2012
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Profile picture for Montgomery Mortgage
If you don't have much other debt and depending upon the taxes of the property, you should be able to qualify for a mortgage without a co-signer.  Although you think you may not have a recorded credit history, you should check with the national credit repositories, Experian, Transunion and Equifax.  Each have websites you can go to and check.  If you don't have any credit, that's better then having bad credit.  In that case, you can qualify by having "non-traditional" credit references that are not reported to the repositories ie landlord reference, utility bills, etc.  There is the FHA 203K loan that provides mortgages for acquisition and fixing up a property.  
  • March 18 2012
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Profile picture for user920186
Just read what I posted and noticed I didn't make it clear but my parents are both near perfect credit ratings high 700's for each of them, they've offered to Co-sign on a mortgage with me, I just wanted to do it myself without help if at all possible (pride). I want to purchase a newer 1970's or newer home with no major TLC required, does anyone know if I can't get a VA or FHA loan if the property I want to purchase has parts not up to code or non conforming, but still livable with no structural damage/ problems. I've been told the FHA might be the better way to go because I want to fix up a property in the 100-150k range and turn it into a house in the 200k value range. I know what that undertakes and have the experience to undertake those repairs/ remodeling, I'm just wondering if I can still get a loan if the property has stuff wrong with it I guess?w
  • March 18 2012
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Some lenders will work with you, but others will require that you establish some credit.  While you might be eligible for some programs now, you may get a better interest rate if you take a little time and established your credit.

VA interest rates are not always the lowest, so keep an open mind.

I know a local loan officer who has been over to Iraq and is a service member.  Give me a call if you would like to chat more and I can recommend him to you.
  • March 16 2012
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You can do a VA loan with no credit score.  The lender will request three sources to verify a payment history for the last 12 months.  Your rent counts as one, then we can use utility bills, cell phone, insurance payments, etc.  Any accounts that you pay on a monthly basis can be used.  your income, employment and reserves (VA does not require any though) history looks solid with what you are sharing.

  • March 16 2012
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