I only got a credit card a few months ago and haven’t had the chance to build much credit. I didn’t have a lot of things set up earlier in life, so I’m starting a bit late.
When I applied for a mortgage with my bank, the loan officer said it’s unlikely I’ll get approved because I don’t have established credit or rental payment history. They also mentioned that if I applied for a joint mortgage with my boyfriend, he’d need to make at least 51% of the income to compensate for my lack of credit, but I earn more than he does, so it doesn’t seem like that would help much.
My questions are:
How long does it take to build enough credit for a mortgage?
Would applying jointly with my boyfriend actually improve my chances?
Has anyone tried Rocket Mortgage for situations like this? Are their rates decent?
Unfortunately, your loan officer is right for conventional loans. Non-traditional credit guidelines are tricky, and the 51% income rule is accurate. It sounds like they know what they’re doing, though, which is good.
Check out NACA. It’s a pain to qualify for, but it’s worth it. They don’t care much about your credit score (even if it’s 0), and their terms are amazing: no down payment, no PMI, they help with closing costs, and their current 30-year rate is 5.75%.
But be careful about taking out a mortgage with a boyfriend or girlfriend. That can complicate things if the relationship changes.
You should focus on building your credit for about two years before applying. Avoid buying property with someone you’re not married to unless you’ve been together for a long time and have a written, notarized agreement about what happens if you split.
@Clove
I’m hoping to move out in a couple of months, so I might consider Rocket Mortgage. My boyfriend and I have been together for five years, and we agreed the house would be in my name since I’m paying for it. If we ever split, he’d keep the furniture, and I’d keep the house. We’ve at least sorted that part out.
@Kai
Rocket Mortgage doesn’t have any magical solutions. They follow the same conventional loan guidelines as other lenders unless they plan to service the loan themselves. Be cautious.
@Kai
You won’t qualify with Rocket either. They have the same requirements, including making less than 50% of the income and proving non-traditional credit. One requirement is showing 12 months of rent payments, which it sounds like you don’t have.
@Kai
I used Rocket Mortgage, and they still had credit requirements. You might need to rent for a while if you want to move out before building enough credit.
It’s unlikely to get approved without any credit history. Lenders typically look for stable income, credit cards, and rental history, usually over two years. You’re looking at about 6 months to 2 years to build the credit they’d want to see.
Having a score can open up some options. You might consider getting added as an authorized user on someone else’s account to trigger a credit score. That could speed up the process. Let me know if you need more advice!
@Kirby
Be cautious with this approach. Fannie Mae and Freddie Mac may invalidate scores generated primarily from authorized user accounts. Lenders will dig deeper if they suspect the score doesn’t reflect your actual credit history.
The good news is that building credit from scratch is easier than fixing bad credit. You’re on the right track. Consider getting 1-2 more small secured credit cards, use them sparingly, and pay them off every month.
Also, avoid Rocket Mortgage. They don’t have any special tricks and often charge higher rates due to their heavy advertising costs.