What are the options for home loans without a credit... - Limited/Bad/Fair Credit Questions


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Credit Card Applications » Questions » User Questions » Limited/Bad/Fair Credit » What are the options for home loans without a credit history?

What are the options for home loans without a credit history?

Answered on | Updated on August 30th, 2010
The content is accurate at the time of publication and is subject to change.

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.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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