Question:

Will it be a mistake to get a mortgage loan with no credit rating history?

Answer:

It will be hard to get a mortgage loan at all if you have no credit history. With no information about your credit rating, consequently about your past payment history, it will be hard for the lender to make an accurate prediction of your future payment punctuality.

However it is not impossible, though you will probably have to prepare at least a sizable amount of money for the down payment. Still, even if you get a no credit history mortgage loan, you will have to be prepared for a number of disadvantages.

To start with, expect much higher interest rates. Lenders are taking the risk of lending money to a person with no credit rating history, and therefore you will have to be prepared to make amends for that risk by paying more than a person who has a good credit history. The interest rate of your no credit history mortgage loan will be probably three to five points higher than the average rates.

In addition to the high interest rates, you can also expect higher monthly payments.

And finally, as we mentioned in the beginning, in order to get a mortgage loan at all when you have no credit history (and also when you have bad credit rating history) you will have to pay a very big down payment as a good faith payment from you.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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