Alternative Credit can help Florida mortgage applicants including first time Florida home buyers who either have no credit score or don’t have any trade lines. To understand alternative credit the Florida mortgage applicant must understand what a credit trade line is.
WHAT IS A TRADE LINE?
When a borrower opens a line of credit, such as a credit card, car loan, or a Florida mortgage, these accounts if reported on the credit report for a full 12 months are called trade lines. Most lenders require several trade lines to qualify for a Florida mortgage. The number, history and status of these credit trade lines comprise a large part of a person's credit score. The higher a Florida mortgage applicants credit score, the greater the likelihood of obtaining credit and of qualifying for more favorable interest rates and terms.
WHAT IS ALTERNATIVE CREDIT?
Alternative credit is essentially is any regular payment the mortgage applicant makes that does not show up on your standard credit report. In order for a debt to be useable in Florida mortgage financing it would have to:
1. Be provable through written documentation.
2. Show 100% on time payments for the past 12 months
3. Be paid monthly
WHAT ARE EXAMPLES OF ALTERNATIVE CREDIT?
Rent (we usually need cancelled checks from your bank on this one)
Cell phone bill (12 month payment history)
Cable or satellite TV bill (12 month payment history)
Utility Bills (electric, gas, other) (12 month payment history)
Insurance (renters, auto, or life)
401K, IRA, or Insurance policy loans.
Payments made to child support.
Loans that do not show up on credit.
No credit score Florida mortgage applicants can use any of the above monthly payment obligations for alternative credit. No credit score Florida mortgage applicants can use any other monthly obligation not listed that is made monthly as long as the payments can be proven through a paper trail.
Caution: Florida No credit score mortgage applicants cannot use any alternate trade lines with any 30 day late payments. Any 30 day late payments automatically disqualify the No Credit Score Florida mortgage applicants.
WHAT IS ACCEPTABLE DOCUMENTATION FOR ALTERNATIVE CREDIT?
Statements from any Florida service provider if it’s a large institution.
An account payment summary from a large institution.
If your a first time Florida home buyer and you have been denied a loan because you have no credit you should contact us and I and ask us how you can qualify for a No Credit score Florida mortgage.