 TITLE: Can You Get A Mortgage With No Credit? CONTENT: Mortgage Options for Those With No Credit\n-----------------------------------------\n### Conventional Mortgages\nIf applying with an acceptable credit score, an applicant with sufficient funds to make a 3% down payment and an adequate debt-to-income (DTI) ratio could qualify for a conventional mortgage at the lender's discretion. DTI measures the percentage of a borrower's monthly income that goes toward debt payments, and conventional mortgage lenders typically look for a ratio of 50% or less. In a manual underwriting situation, even with a solid track record of paying your bills, lenders will likely require down payments of at least 10% and a DTI ratio of no more than 36%. The lender may also require you to show proof that you have at least one year's worth of payments in your bank account.\nIf your down payment is less than 20% of the home purchase price, the lender may require you to pay for private mortgage insurance (PMI), which helps protect the lender in case you default on the loan. PMI can be removed from a conventional mortgage once you've made enough payments to own 20% of the home's market value. PMI pricing is typically set based on the borrower's credit score, so in the absence of a credit score, you should expect to pay the PMI premiums the lender charges to borrowers with the lowest credit score they'll accept.\n### FHA Loans\nIf you're a first-time homebuyer planning to use the house you buy as your residence (as opposed to a vacation home or rental property), you may qualify for a mortgage backed by the Federal Housing Administration, otherwise known as an FHA loan.\nFHA loans are designed to create opportunities for homebuyers whose credit scores are less than ideal or who can't afford to make a down payment on a conventional loan. Federal guidelines allow lenders issuing FHA loans to consider \"nontraditional credit histories,\" including candidates with no credit score. Try to find several FHA lenders so you can compare rates and borrowing terms—since the FHA gives lenders some leeway in their pricing and fees, some may offer you a better deal than others.\nGeneral requirements for an FHA loan include:\n*   A down payment of at least 3.5% of the home's market value\n*   DTI ratio (that is, the mortgage payment as a percentage of gross monthly income) no greater than 31%\n*   Paying mortgage insurance for the full duration of the loan (or for 11 years if you make a down payment of 10% or more)\n*   Enough cash in the bank at closing to make at least one monthly mortgage payment\nWhile FHA loans may be more accessible than conventional loans, they are considerably more expensive over their lifetime than conventional loans in similar amounts. A conventional mortgage could save you tens of thousands of dollars over a comparable FHA loan. END