Can you buy a house with no credit score? | Manual Underwriting Explained

Описание: So as a lot of you know, we are big fans of Dave Ramsey here. One of the questions we get asked a lot because of him are, "how do you buy a house with no credit score?" In this video we are going to go over exactly how to do it because in a few years I am actually going to be doing the same process myself.

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DISCLAIMER: THIS VIDEO IS FOR ENTERTAINMENT PURPOSES ONLY. YOU SHOULD ALWAYS CONSULT WITH A PROFESSIONAL FINANCIAL ADVISOR BEFORE MAKING ANY DECISIONS WITH YOUR MONEY

BUYING A HOUSE WITH NO CREDIT SCORE:
First up, yes, if you don't have a credit score, then it is going to require more work on your part to get a mortgage loan b/c the creditors don't have any previous knowledge of how well you are at paying off debt. One big thing to note is that there is a huge difference between having a LOW credit score and having NO credit score. It is going to be way easier to get this manual underwriting mortgage with no credit score than a low one. If you are working towards getting rid of your credit score completely then the only way to do that is to stop using debt completely and quit borrowing money. Any debt that you are involved in now, pay it off and get rid of it and hopefully within about two years your credit score will have gone away.

FHA LOANS
Some people might tell you to get a FHA loan which is a terrible idea, don't listen to them. That is a loan that is backed by the government and it is super easy to qualify for. Thought it may seem harmless, there are actually a lot more hidden fees involved in this loan and it will end up being more expensive than a normal one.

MANUAL UNDERWRITING
The route that you'll need to take is called a manual underwriting. This is what I will be doing soon as well. This is just another way to prove to creditors that you are in a sound place financially and will be able to handle paying off debt payments each month. To qualify for a manual underwriting mortgage, you will need to provide a lot of documentation that proves you have a steady income and that you can make steady bill payments. So you need to compile all your monthly statements, anything from your rent, utilities, phone bill, insurance. The more of these you can compile then that will make it a lot easier to get approved for this loan. The bigger the downpayment the better. You need to shoot for at least 20%. If you can do this then that will mean there is less risk for the lender which will give you a higher chance of getting approved. The more you can put towards your downpayment the better. Finally you need to go with a 15-year fixed rate mortgage. This will ultimately be the cheapest and it will help keep you disciplined in paying down the mortgage you owe on you house and will get it done fast.

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