Home is an important asset in every person`s life, so naturally owning a home isn`t a very easy task. Almost everyone buying a home will need to apply for home loans through their banks or money lenders. For people with good credit history, there are many options with regard to banks and money lenders, and the amount they will be preapproved for, will also be good.
For people with no credit history, though it is a better stage than having bad credit history, there are some limitations in terms of home loans. First of all, be sure you can pay a big chunk of money as a down payment towards your house. This has two major benefits regarding your loan; first one is that it can really lower your interest rates for the installments, and second is that it reduces the lender`s risk in lending you money so, you have more options in choosing your loan lender.
Having no credit requires you to make up for it in other ways. One way of establishing credibility is by showing your employment record. If you have an excellent record of employment for at least two years, your bank will have lesser restrictions on you when you are borrowing money and it also can reduce your interest rates significantly. If you are just employed and are looking to buy a house without having established a credit history yet, then you must approach your bank and inquire about first time home buyer`s loan. This loan is for people who are buying a home for the first time so it comparatively has lesser requirements and is not too stringent about credit history either. Many times, you can avail this for very attractive interest rates too if you have an account in the bank for a long time.
One thing that can really help you while making such a high investment and taking a big amount as a loan is to have a co-borrower. If you don`t have a credit history to show, then having a co-borrower with a strong credit history can help you a lot in getting better loan options and interest rates. But one thing you have to keep in mind is, if you are not on time in paying the installment or if you cannot repay the loan on time, then your co-borrower will be held responsible for the amount to be recovered.