Mortgage with no credit history? | Mortgages | Discussion forum

I agree with Norman.

I would also ask for a free credit report from both TransUnion and Equifax. These are the main credit rating agencies. This will confirm for you whether or not you in fact have a credit record. It's possible you may have a credit history that you are not aware of and have forgotten something that might have generated it.
You can ask for this for free once a year, which will enable you to monitor your situation after you get a credit card.

If you have trouble getting a credit card, then ask for the secured kind where you give them $500 in advance and then charge against that money and then replace it. After a little while, they will allow you to get a regular card. In this case, I would go to the bank where you regularly cash your paycheque, as they can see that you are getting a regular income and may treat you more sympathetically, considering you probably have no credit rating.

And, no, it's not better, in this society, to have never had any debt or credit cards. I don't know how you have managed without a credit card. It's just about impossible to stay in a hotel or rent a car without one, so, you really do need one. In a lot of situations, it's also safer to use a credit card than to carry around wads of cash, especially if you are travelling.

You will be able to get a mortgage somewhere as long as your income is sufficient, but you may end up with a private lender and a higher rate. Using a mortgage broker is a good idea, but I have no particular one to recommend. Also, a good realtor should be able to provide some help and advice. Note that I said a GOOD realtor. They usually have contacts with mortgage brokers. You're going to need one anyway, so start asking around for a referral where you live. Sometimes, too, a credit union will be more helpful than a bank in cases like this, but you would need to already belong to it.

If you are renting, it might help to get a letter from your landlord saying you have always paid your rent on time and been a good tenant.

Rick said

…. If you went into the bank you have been using all your life and asked for a mortgage with 30, 40, 50% or more of the down payment you want to use sitting in their savings account, might not be a problem. …

The bank will approve the mortgage. But, the bank won't give the best rate.

When the bank retrieves the credit record from Equifax and TransUnion, they will see the lack of credit history that other lenders would see. As a lender too, they know what other lenders will think and that you aren't in a strong position to negotiate.

That's what used to happen with new immigrants. Even if they had 50% down payments, the big banks would not approve mortgages for them because their risk models didn't take well to no credit history. They had to go to alternative lenders, like Equitable Bank and Peoples Trust. The alternative lenders knew this and charged them a higher interest rate.

I feel for you sphilips, but either not knowing how credit works, or choosing not to build credit in the first place may be red flag for most lenders!

I was new to Canada in 2006 and had no credit history. I had to do what was suggested and put down $500 for a secured credit card to get the ball rolling on a history. I paid this down each month, put bills in my name, and got a car loan with my wife as a guarantor. We were lucky that her credit was good because a house loan would have been out of the question. Eventually we were offered cc with up to $25K limit... we keep it at $10k

10 years on and 3 properties, i have a strong credit history and can haggle from a position of strength as any lender wants my business. Good credit takes time and showing you can use it responsibly and pay your debts is the key. No late payments, frequent and responsible usage.

If i were you, i'd try a local credit union. They sometimes step up where banks will not. I saw an interesting post on http://www.theglobeandmail.com.....e32587351/ , this forum gets a mention, but so does the idea of getting a mortgage online. Anyone out there tried this?