Many people assume that they need to establish their credit and have a long work history before even attempting to buy their first home. However, some people decide to strive to buy a home without any credit history. These myths about buying a home with no credit don't seem to go away. Learn the truth behind these home-buying myths.
Myth #1: Rent-to-Own Home Arrangements are the Only Choice
Truth: Although someone who doesn't have a credit history will have a harder time finding a lender who is willing to offer them a mortgage, it is not impossible. Rent-to-own options do work for some first-time home buyers, too. This sort of arrangement allows you to start off by renting a home with an arrangement with the owner that specifies that you will have the option to buy the home after a certain rental period. That can be a good position for the home seller and you as the home buyer. However, it is by no means your only option. You will probably also be able to find a bank or mortgage company who is willing to take a risk on you despite the lack of credit.
Myth #2: Real Estate Agents Hesitate to Work with Buyers Without Credit
Truth: Okay, this pesky myth doesn't contain even a kernel of truth. A real estate agent does not discriminate. They will gladly help you find your home no matter what your credit history is. However, you do want to be up front with your real estate agent about exactly where you stand. For example, the real estate agent needs to know about your lack of credit history, your current employment, and how much savings you have for a down payment. That's because a real estate agent is helping you find your dream home and will try to work with you no matter what your circumstances are.
Myth #3: Large Homes Are Not Available to No Credit Buyers
Truth: This is false, but it is true that it is easier to get a small home financed than a big one if you do not have a good credit history and a significant down payment. That doesn't mean that large homes are off-limits to you, though. Set yourself up for success by establishing a good work history and saving a significant portion of your income each month. Start a savings account just for the down payment if you want to buy a large home.
Finally, keep in mind that you may qualify to finance a home even if you do not have a credit history. Don't let fear cause you to accept anything less than what you truly want in a home. The most important thing is finding a home that you love. From there, you can figure out the best means to attaining your end goal.