Can I qualify for a mortgage to purchase real estate without a credit history?

Yes. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your mortgage broker or lender for details.

Save up so that you're prepared to put down a sizable amount of money. A lender is much more likely to take you seriously if you're willing to invest your own funds to purchase a home. A large down payment creates instant equity which not only lowers the lender's risk significantly, it could also get you a better interest rate.

How?

Get letters of recommendation from current or former landlords. A letter from a rental agency that states you upheld the terms of your lease for at least 2 years can be as good as a credit rating for a car loan or credit card.

Build credit by getting a credit card. If you use it regularly and pay it off every month, or at least make the monthly payments on time you can begin to build a credit history which will help you when you apply for a home mortgage loan.

Talk to a mortgage lender to see if they offer any first time home buyer programs. Many banks and mortgage companies have loans available to first time buyers with little or no credit history.

Attend a local home buyers seminar to learn as much as you can about the process. The more prepared you are to apply for a home mortgage, the better your chances will be of getting approved.
Tips & Warnings

* Without a credit history, you need to show stability in other areas. Most banks require at least 2 years of continued employment with the same company and two years at your current residence.
* Unpaid collections and judgments on a credit report are worse than having no history at all. Make sure you have cleared up any outstanding negative public records you may have.

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