How Do You Get A No Credit Check Mortgage

If you are looking for no credit check mortgage loans then you may struggle. While loans do exist for people that have poor credit, I don’t know of any lender aside from a private property owner that is carrying the contract themselves that will give you a mortgage loan with no credit check. Keep in mind that we are talking about a loan for at least a hundred thousand dollars and maybe several hundred thousand dollars. However, there are some options for those who have bad credit but still need to get a mortgage loan to buy a home.

While you may not find no credit check mortgage loans you will find that there are lenders in your city, unless your city is very different than most, that will lend to those that have bad credit. These lenders offer credit check mortgage no turning down customers, because they offer what are called subprime loans. Subprime loans are loans that are offered at a much higher interest rate than the prime rates that are often advertised by banks and mortgage companies, and instead of a mortgage with no credit check they will offer a mortgage loan despite a credit check, but at a higher rate.

So if they don’t do mortgage loans with no credit check then why would they lend to someone with poor credit? Even if there were no credit check mortgages they would still have to base their decision upon something and these lenders so, basing it off of how much you can put down on the home, as well as a few other factors. But let’s talk about down payment first. If you have a large down payment you may be able to move yourself out of the subprime category and into the regular mortgage one. Putting down twenty percent or more of the home’s value is a very low risk to lenders, because you have so much invested.

Besides being willing to work with you if you have bad credit by putting twenty percent or more down on your home you also avoid paying for Mortgage Insurance, also called Private Mortgage Insurance or PMI. PMI is required whenever a consumer is putting less than 20 percent down to minimize the risk to the lender. It is paid by the consumer and is anywhere from half a percent to one percent of the leftover principle after your down payment in most cases. This can mean as much as a hundred or two hundred dollars a month so it is a good thing to avoid.

Private mortgage insurance will only be required if you have less than twenty percent equity in your home, so once you reach that point then you can discontinue paying it. For instance, if you put ten percent down then in a few years you would reach 20 percent equity and you can stop paying PMI. However, this can often take a very long time and none of that money goes toward your mortgage so it is a very good thing if you can avoid it by putting twenty percent or more down. Besides the down payment, your approval is also affected by your income, your time on the job and your debt to income ratio.