How to Qualify for Mortgage without a Credit Score

August 14, 2007 By Matthew Paulson

Many Americans are absolutely fixated on their credit score. They believe that they have to do whatever it takes to keep their credit score in good standing. There was once a woman who called into the Dave Ramsey show who had not eaten in two days, but was current on her Mastercard payment. That’s an extreme example, but some people put far too much emphasis on their credit scores. The reality is that you really don’t need a credit score. You should be saving up and paying cash for things as best you can and borrowing as little as possible. There are some situations where you do need to borrow money, say for a house, but those should be kept to a minimum. It turns out that you can get the best interest rate out there on a mortgage without even having a credit score. Here’s how to do it.

Mortgage approval wasn’t always based on having a great credit score, but unfortunately the mortgage lending business has largely been dumbed down to the point where a good credit score is the only determining factor in major mortgage firms. There was a time when mortgage companies actually looked at the person getting the mortgage. They checked and saw if the person had a steady job, had been paying their rent on time, and had the ability to pay for their mortgage. Fortunately there are still a handful of companies that do this, and if get your mortgage with one of them, you can qualify for the best mortgage out there without them ever even looking at your credit report.

In order to get a mortgage without a credit score, you’ll need to find a mortgage company that does manual underwriting. This simply means they look at the person’s ability to repay the loan rather than solely looking at the person’s credit score. A simple search on Google will reveal a number of companies that offer manual under-writing. Don’t go with just any company. There have been dozens of mortgage companies that have gone under in the last year because the mortgage business isn’t what it used to be, and you need to make sure that your mortgage company is going to be there tomorrow.

Once you’ve targeted the right mortgage company, go talk to them and tell them that you want to do a manually underwritten mortgage. If you’ve paid your landlord early or on time for the last two years, and you can show gainful employment for the last two years, you’ll qualify for the best rate out there that people are getting right now on your mortgage. That’s all it takes, no credit score required.

Posted in real estate