Kay Monigold, Author at Avenue Mortgage, LLC

Last week was a fairly light week, with the non-farm payroll data being the most significant release. The data showed that payrolls are growing at a faster rate than historical trends suggest, which could indicate that inflation is still above the Federal Reserve’s target. In contrast, the upcoming week has a busy schedule, with many important economic releases lined up back to back.

Non-Farm Payrolls

Hourly pay for American workers rose a sharp 0.4% in September – above expectations – to put the increase over the past 12 months at 4.0%. That’s up from 3.9% in the prior month. Wages are rising faster compared to the last few years before the pandemic. Wage gains rose just slightly over 3% on average in 2018 and 2019 before the coronavirus exploded.

If wages keep growing at a 4% rate, it could call into question the Fed’s view that labor costs will remain non-inflationary.

Primary Mortgage Market Survey Index

15-Yr FRM rates saw an increase of 0.09% with the current rate at 5.25%
30-Yr FRM rates saw a decrease of 0.04% with the current rate at 6.12%

MND Rate Index

30-Yr FHA rates saw a 0.25% increase for this week. Current rates at 6.04%
30-Yr VA rates saw a 0.26% increase for this week. Current rates at 6.06%

Jobless Claims

Initial Claims were reported to be 225,000 compared to the expected claims of 220,000. The prior week landed at 219,000.

What’s Ahead

Next week will be a heavy week, starting with key inflation reports like the CPI and PPI. These will be followed by the FOMC Minutes, Consumer Credit data, and the University of Michigan Consumer Sentiment report.

Getting a mortgage without a credit score may seem like a tough task, but it is possible. Many assume that a credit score is a must, but if you don’t have one, you can still pursue your dream of homeownership. Here’s how.

What is a Credit Score?

A credit score is a numerical value that shows how well you manage debt. The score is based on factors like your payment history, how long you’ve had credit, and how much credit you’re using. Higher credit scores typically mean better mortgage terms, including lower interest rates.

Loans Without a Credit Score

If you don’t have a credit score, it’s not the end of the road for a mortgage. While many lenders are cautious about lending to people without a credit history, there are still options available. Some government-backed loans, such as FHA, VA, and USDA loans, accept applicants without a credit score. Additionally, certain conventional loans with a large down payment or shorter terms may also be accessible.

The Underwriting Process

Without a traditional credit score, lenders will need to evaluate your creditworthiness using non-traditional credit sources. Lenders typically ask for four forms of alternative credit to show that you can reliably make payments. These could include rent payments, utility bills, phone bills, insurance premiums, and even school tuition.

Once all the documentation is submitted, the underwriting process can take longer than it would for someone with a standard credit history—potentially up to 60 days or more. Since manual evaluation is involved, it’s important not to commit to any home purchase without contingencies for funding approval.

How to Build Credit

If getting a mortgage without a credit score proves challenging, you can start building a credit profile. Opening a credit card and responsibly managing it by paying off balances in full each month is a good start. Keeping your credit usage under 30% of the credit limit can help build a strong credit score over time.

While having no credit score can make the mortgage process more complex, it’s not impossible to secure a home loan. By providing alternative forms of credit or working on building your credit, you can still achieve homeownership.

What’s Ahead For Mortgage Rates This Week – October 7th, 2024

How to Get a Mortgage Without a Credit Score

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