CREDIT! Yet another chicken and egg story of the real world!

I don’t have credit, but I need credit to get a loan, credit card, or mortgage. So, how am I supposed to get my first mortgage without any credit? Many young people have very little knowledge of their own credit and how credit works. You don’t need a well-established paper trail of formal credit in order to get a first mortgage. Read on, and your first mortgage will seem much closer than you initially thought.

Do I Need a Credit Card to Get My First Mortgage?

Having two credit cards for at least two years, that are used regularly, in good standing with no late payments on anything on your credit report is the best way to attain a high credit score. In the case that you are new to credit and still want your first mortgage, you still may have options.

The answer to the question above is no; you do not need a credit card to get your first mortgage. Mortgage Brokers can help you find banks that will look at other types of credit such as utility bills or cell phone bills, and negotiate with the banks to approve a mortgage to help you buy your first home.

Sometimes in cases like this, the mortgage lender will want twelve months of bank statements so that they can see your money management history. If there are a lot of returned cheques or charges it would be difficult to get a mortgage approved.

Build Your Credit

Once you get your first mortgage, you will be building your credit while living in your new home. Owning a home and not having late payments on your credit report will open up new credit options.

You will likely be receiving a lot more credit card and store card offers. It is crucial that you don’t get too enthusiastic with all these new offers. Your actual financial situation has not changed, you are just being offered more credit. Make sure that you don’t overextend yourself with exorbitant future payments because that could lead to bankruptcy and losing your home in the long run.

Jamie Arthurs can help you obtain your first mortgage and home. Contact her today to get started!