Alternative Loan Documentation

Did you know that more and more lenders are coming out with loan programs that will accept "Alternative Credit Reporting".  What is alternative credit reporting?  Any type of trade line, pay history, or financial obligation other than a tradition credit report.  Things like RENTAL HISTORY cell phone bills, utility bills, or in-store installments can be considered as alternative forms of credit.  As long as you have a 12 month history of making these payments in a timely manner, in many cases, they can be used to show credit worthiness.  This is a huge benefit to anyone who hasn't established a credit history, has no credit scores, or has never used credit before.  People like new graduates, immigrants, or self employed people, now have access to more lending programs.  Expect the rate to be a little higher, simply for the fact that the lender is assuming more risk through this creative documentation.  Rental History is the biggest factor in these programs.  So an excellent rental history is a must.  Ideally, the lender will look for a Verification of Rent from a management company, but if you rent from a private individual, always keep copies of the canceled rent check.  This will allow you to show proof of timely payments in accordance with your lease agreement.

Questions or comments are always welcome

Your Columbia, MO Mortgage Broker

Comments

[VA refinance]

That is a great Post.I think it is great that lenders are accepting those things. It gives the average person more of a chance to live the American dream of having a home. Chad C.