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How will the lack of rental history affect my home loan process? Other questions too...

I understand that a bad rental history may hurt your mortgage application, but what about no rental history?I want to buy a house in the near future, but I do not have a rental history, on contract at least. I was talking to someone today and they said lenders will be reluctant to loan to me if I do not have two years of renting history, or at least one year.I can't seem to find a solid answer online. Does anybody have any RECENT experience with this? I say recent because I assume that mortgage applications are more strict since the housing crash, and stricter requirements.Are there any particular ways to satisfy what the lender is looking for? If it helps, I will give some details of my situation: Projected FICO score (2013): 750+I currently have a 678 Equifax FICO score, but I have a 98% debt-to-credit ratio (credit cards). I am on budget to have my credit cards paid off before the end of this years, and according to Equaifax's "FICO simulator" (on Score Power) if I pay off 90-100% of my credit debt I will be in the score range of 808- 848. First time home buyerVA loan or traditional?Goal is to put 20%/30% downpayment Address historyCurrent residency is 1 year (live in a garage...not as bad as it sounds )Previous residency was about 6 months (had two roommates)Previous before that: military barracks (technically "rent free" ) Debt-to-Credit ratioWhen I go house hunting my credit cards will long be paid off, but I may run a balance of around 10%.No student loansNo car loans... what if I were to purchase a car?No other debts other than revolving credit cards Negatives on Credit Reports"potentially negative accounts" on my current credit reports: 5All of my "negatives" are simply 30 day late payments; no collections, judgements, bankruptcy...3 of the 5 "negatives" will be 7 years old this year, so I assume they will go awaya further "negative" will go to "positive standing" on October 2012, so essentially in 2013 I will have 1 "negative" on my report - a 30 day late payment back in 2008. by christ_143_316 from Charleston, West Virginia. Apr 5th 2012 Reply


Sales Manager Matthew Boyce (bestlender)
#8 ranked lender in New Jersey - 19 contributions

Chris... Looks like you've put a lot of thought and energy into this, which is great because you're giving yourself enough time to pave your way to getting ultimately approved. Honestly you just need to have a (competent) loan officer run you through underwriting and give you an 'official' breakdown of where you stand and what you need to do for approval. AnnieMac is a mortgage bank that does business nationwide... and I can probably have this figured out same day for you. Feel free to call me at 856-291-3122 or email at mboyce@annie-mac.com

Apr 5th 2012
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Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

Sounds like you would qualify for a VA loan if you can get the VA Certificate to purchase. Give me a call we should be able to help you. 888-320-7888 - www.MortgageWholesale.net - Ken

Apr 5th 2012
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Natalie Loudan (nloudan)
#44 ranked lender in Virginia - 5 contributions

Ok, for most loans with your credit scores we do not need a rental history. I see that your residency at one time was on a military base. Her you served in the armed forces? If so, there are other options available for you. I do not need 24 months rental history. If your credit scores were lower we look at 12 months verification only. Keep in mind that in most cases, we do not look at rental history. Please feel free to email me at nloudan@primelending.com or call me at 540-450-2700. I appreciate the opportunity to assist you and I look forward to hearing from you.

Apr 5th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,550 contributions

Ok.. So let me start with your original question... will lack of rental history prevent/affect your ability to finance a new home.. then answer is NO... if you do not pay for housing, and have not had to pay for housing in the past 2 years, lenders think you get "Payment Shock".... so they will have you write out a budget for all of your expenses, not just the ones that show on your credit report... So long as you can show that after all expenses, you able to put 5% or more into savings ever month, you will pass the test... Based on everything else you show above.. You will have no problem qualifying for a mortgage FHA, VA, or conventional.. the fact that you have been able to save because you're not paying much in rent is a very strong compensating factor... if you were in my market, i would say, "go shopping for your new home"... But let caution you on one thing.. do not use a local bank, or one of those 50 states or internet lenders.... deal only with a LOCAL mortgage broker... the LOCAL broker is familiar with the customs for your area, and because he deals with many lenders, not just one, he can find the right loan product for your particular scenario... WilliamAcres.com

Apr 5th 2012
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,819 contributions

Many times, the underwriting model (referred to as the AUS) will return findings that stipulate "No verification of Rental History required" If this is your case, then you have no problem. How do you know if this is your case? Simply contact a local Mortgage Banker/Broker, rather than one of the big banks or big national mortgage factories. Unlike a bank employee, who is most likely just an order taker, a Mortgage Broker/Banker is Trained, Tested and Licensed in all aspects of Mortgage Origination. He/She will have access to loan products of many lenders, not just those of one bank, and can properly guide you. But more importantly, He/She is trained to take a look at the various different options available to you and guide you into the one that makes the best sense for your situation. At the same time, he/she will be able to tell you if there are any other issues that may affect your qualifying. Don't forget to check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Apr 5th 2012
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