The Horticulturalist

Just musing about possibilities for the future here....

Have been here for over 4 years,we have green cards and that's about it We have no debt at all, no loans or credit cards either so I suspect (don't know for sure) that our credit score would be near to 0 rather than simply low.
While we have no debt, we have not been saving for long enough to put anything significant down on a house.

So what are the odds of securing a 10 or 15 year mortgage with no deposit and a low or no score? Income range is $70 - $80,000 and we would have a housing allowance, but not sure how much which would cover the mortgage and taxes.

Noorah101

Do you have any US credit history at all? If you've never had a loan and never had a credit card, my guess is that you don't have any at all. You won't even have a credit score to be given a 0 on it.

My guess? Not good at all. Newcomers to the USA who have no US credit, usually have to put down a significant amount in order to get a mortgage. You might as well be a newcomer here, if you have no credit history.

Rene

fatbrit

Why?

Open a secured card tomorrow with $1k (e.g. BoA). Spend $50 on it every month, pay in full when bill arrives. After 8 months, apply for another card off someone else (Discover is easy). Play the same game with it. Get them convert the secured card to a real card.

18 to 24 months after you opened the first secured card, you'll probably have enough credit to apply for a mortgage.

The Horticulturalist

Why what? No credit card? We did have one on arrival as we knew the bank manager, but we didn't use it much and so I closed the account after about 18 months. We had a car loan too but that's been paid off for a while.

EDIT: what if I had a 5% deposit?

thinbrit

A good starting point is getting your credit score.

You are entitled to pull it free once a year from each bureau
https://www.annualcreditreport.com/cra/index.jsp



This is also a good truly free credit score tool
http://www.creditkarma.com

Pulaski

Credit scores run off more than just loans and credit cards- checking accounts and utility bills also feed into the algorithms. I see you had a car loan too- so that will also be in your score, and any use you made of your credit card too, so you may have more of a score than you expect. Rather than just guess, go online and get your credit score either a "free" one or if you don't like the strings you might have to pay upto $25. I hear that Wells Fargo is offering a free credit score if you open an account.

To the other half of your question, for any "conventional" mortgage you're pretty much certain to need a minimum 5% down. But with rates at all time lows, if you qualify for a mortgage, I'd strongly recommend the 30 year term which will help your cash-flow, and with a conventional mortgage you can pay more at any time without penalty.

The Horticulturalist

I have never managed to extract a credit score from any of these sites, I may just need to call them.

fatbrit

The car loan is good.

Closing the credit card was a bad idea. You always want 2 or 3 credit cards to keep your credit healthy. You don't need to use them much. Look on it as playing a silly game to keep your credit worthiness high.

With the new info, you might get a real card if you go for an easy one.

Also, you need to space out your credit applications so as not to hit your score too much. One application every 9-12 months is more than enough. So get your credit cards started, so you've got some more history and a long enough gap when you apply for the mortgage. It'll give you some time to save up for the deposit.

fatbrit

I wouldn't bother with the score -- it's not like it means anything to you anyway unless you're a loan officer or underwriter. You can always estimate your score here:
http://www.bankrate.com/calculators/...alculator.aspx

What is worth getting is your government-mandate free credit report to check there's no erroneous info in there.
https://www.annualcreditreport.com/cra/index.jsp

If it doesn't work on line, use snail mail. Ignore the offered extras -- just take the free reports and check them for accuracy.

Bob

You've probably got history and some score....whether that's enough will entirely depend on local market conditions.

5% and you'd have as much chance as you did with no deposit or credit score down in my location, which is nil. But in others, 5% would probably get you in the door.

Rule of thumb though is to have at least 6 months worth of mortgage payments in the bank before getting a house in case you get laid off or shit breaks, or it is down my way as a recommendation.

Pulaski

I beg to differ - your score will give you a pretty good idea of if you are likely to qualify for a conventional mortgage. To get a conventional mortgage your score will probably need to be over 600, and to qualify for the best rates it will need to be close to 700, or higher.

The ideas offered here are good, but without checking the credit score the OP won't know (i) if he actually has a problem that needs to be fixed, (ii) won't be able to measure his progress, and (iii) won't know when he has fixed the problem, or at least improved sufficiently.

fatbrit

The estimator gets you close enough -- see previous link. You can run what-if scenarios to see how to improve your score.

The score from the fake FICO sites doesn't give you what the lending industry generally uses anyway -- a tri-merged report. But the levels are about right. Personally, wouldn't go shopping for a mortgage with less than 720 on the estimated score.

thinbrit

I was skeptical about this, so gave it a try. It was right on the money. Pretty cool.

Uncle_Bob

regardless of your credit score if your down payment on a home is less than 20 percent of the appraised value or sale price, you must obtain private mortgage insurance, known as PMI, with your lender.

FlyingDutchman6666

Fatbrit and thinbrit, are you two related? Will you annihilate when you shake hands?

I've followed Fatbrit's 'Guide to Credit and Finance', and right now I'm at the stage where I should be getting a car loan. The thing is, I'm more than happy with my old banger, so I don't *want* to buy a decent car!

What would be a good alternative to the car loan to build a credit score?

I'm in Canada, not the US, but I suspect the two aren't that far apart when it comes to consumer finance.