If you don’t have a credit score because you're working the Baby Steps, manual underwriting may be a great option for getting a mortgage. To qualify for a no-score loan, you must have no credit score—meaning you’ve never borrowed money or have been debt-free long enough for your credit history to disappear.
If you have recently become debt-free, you may not qualify for a no-score loan yet, as you likely still have a credit history. No credit score and a low credit score are different things.
Using manual underwriting, lenders will look at your financial habits, including:
- Stable Income: Proof of consistent earnings
- Strong Payment History: Evidence of paying rent, utilities, or other bills on time
- Savings: At least 3-6 months' worth of expenses in the bank (what we refer to as Baby Step 3, your fully-funded Emergency Fund)
We've partnered with Churchill Mortgage for over 30 years to serve our fans. Their team is skilled and trained to provide manual underwriting; however, it must be specifically requested.
Remember, the goal is to buy a home debt-free with a strong financial foundation. Save for a big down payment and stick to a 15-year fixed-rate mortgage with monthly housing expenses that do not exceed 25% of your take-home pay.
To find out how much house you can afford, check out this helpful resource from our team. If you have additional questions, let us know!