Needing a no score loan is a good thing and something to be proud of! You’ve worked really hard to pay off your debt, but still need a way to make homeownership a reality. It’s a great problem to have! No score loans are available if you have reached the point of being debt free and your credit score has become obsolete.
While it’s true that getting a home loan without a FICO score can be more difficult, it’s not impossible.
In general, no credit score loans:
- Require more documentation
- Traditionally take longer to go through the typical underwriting process
- May require a significant down payment, and require you to take precautions in the event the program is no longer available.
Despite these initial challenges, the end result of owning your home is well worth the extra time and effort. It's key to know that not every lender provides a manual underwriting service for no score (or zero score) loans, but at Churchill Mortgage we are experts at no score loans and provide manual underwriting on a regular basis for our customers needing this service. Our goal is to not only help explain the home buying process in greater detail, but to also help you prepare and protect yourself accordingly.
Here’s what to do if you don’t have a credit score due to paying off debt but wish to purchase a home:
- Make sure you have four alternative credit tradelines, with one being a rent or lease payment. Contact the creditors and get a letter from each of them on their letterhead showing your name, account number, and information stating your account has been "paid as agreed for the last 12 months." This is usually a good start, but further documentation could be required from the creditor.
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Become a Churchill Certified Home Buyer before you start looking for a home. By going through this process, you’ll better understand the price range of the homes you can afford. This way you don’t get your hopes up and get emotionally attached to the home of your dreams, only to wait 45 days and find out you cannot get approved.
- Work with an experienced real estate agent who can help you find a home that you love in your price range, help you negotiate the contract and can walk you through the home buying process.
** For a 15 year loan, a $100,000 mortgage loan with a rate of 5.00% (APR 5.266%) and a 20% down payment ($25,000) on a purchase price of $125,000 would have a monthly payment of $790.78.* Important Notices: The interest rates, annual percentage rates (APRs), discount points and rebates shown are subject to change without notice. The monthly payment amount shown includes principal, interest and mortgage insurance only. Your actual monthly payment will be higher if an escrow/impound account is established or required. Your APR will vary based on your final loan amount and finance charges. Stated rates and terms intended as examples only. Call 888.562.6200 for current rates and terms.
The Churchill Certified Home Buyer program is not a commitment to lend funds and is not an approval but is a conditional approval subject to your acceptance of the terms and the conditions being fully satisfied prior to closing. All conditions are subject to final underwriting and final investor approval. The certification is subject to the financial status and credit report(s) of everyone on the application remaining substantially the same until closing, an acceptable contract of sale on a suitable property, collateral (the appraisal, title, survey, condition, and insurance) satisfies the requirements of the lender and loan selected is still available in the market. All closing conditions of the lender must be satisfied including the clear transfer of the title, acceptable and adequate title and hazard insurance, flood certification, and any inspections that are required by the real estate contract.