Any credit gurus here?

[NikatKimber]

"Can" is not subjective--you either can or you can't. You said "to get approved for a home loan requires credit," which is demonstrably incorrect.

That last statement is only true if you assume that a mortgage lender who can do manual underwriting will not have competitive rates. That seems like an unwarranted assumption.

You "can" win the lottery.

"can" get a mortgage loan without credit =! "can" buy potato chips at walmart

Getting the mortgage inherently establishes credit. Why not establish good credit prior to getting the mortgage?

Also, as far as "competitive rates" I mean that if it takes more work, and finding lenders who can manually underwrite the loans, that limits the market. A limited market equals less competition. Maybe you can equal or beat rates without credit, but it takes very little difference in a home loan to equal large amounts of interest in the long run. Spending a small amount in interest (small short term loan) to establish credit can mathematically be superior to avoiding credit entirely prior to getting a home loan.

I'm not sure why you'd assume that I'm offended by your erroneous statements; your opinion of him is your issue, not mine. I don't think you're a jerk, I just think what you said was incorrect...

That was mostly in jest, since you jumped in to correct my statements about him. Hence the "LOL!".

"credit is the devil" and avoiding credit altogether is treating a symptom, not the cause. The cause is fiscal irresponsibility.

 

[NikatKimber]

BAD credit and NO credit are 2 entirely different things. I have a high credit score because I was good at being in debt all those years, it means nothing more. I am debt free now other than my mortgage (2 years left on the mortgage) and my credit score will go away once thats paid off. I dont care about a credit score as long as its not bad credit from a slow pay or bankruptcy. By the way, no debt free person ever had to file chapter 13...just sayin.

Debt free is great. But unless you're born with a silver spoon in your mouth, or get some huge inheritance, or win the lottery.... etc; you have to get there. If getting there requires debt, then good credit is what you should have.

 

[COZICAN]

"my credit score will go away once thats paid off"

I havent had a mortgage for almost 10 years and I still have a credit score.

 

[CHenry]

"my credit score will go away once thats paid off"

I havent had a mortgage for almost 10 years and I still have a credit score.

Well at some point I would assume it goes away?

 

[CHenry]

Debt free is great. But unless you're born with a silver spoon in your mouth, or get some huge inheritance, or win the lottery.... etc; you have to get there. If getting there requires debt, then good credit is what you should have.

Everyone has to borrow for a mortgage (99% of us anyway). I wasn't born rich for sure and I did stupid stuff like borrow money when I was living payday to payday. I could "afford" the payment so I got vehicle loans and such. No more. I wish I had known then what I know now. Its so much easier to pay off a house in 3-5 years when your not paying other credit bills.
And yes, you are fully able to get a mortgage with no credit score as long as there is no bad reports on a credit report.

 

[vvvvvvv]

By the way, no debt free person ever had to file chapter 13...just sayin.

And what about debt that was unwillingly incurred?

And yes, you are fully able to get a mortgage with no credit score as long as there is no bad reports on a credit report.

And it will likely cost you more.

No/bad credit? Expect ~4.5% on a 15 year fixed. Good credit? Expect ~3.25%. Great credit? 2.7% or less.

Assuming a $200K mortgage, that's $75,397, $52,960, and $43,448 in interest respectively. Pay it off in 5 years, you say? $23,716, $16,960, and $14,208. The difference from establishing credit history pays off to the tune of anywhere from $9,508 to $31,949 in that case. And if you're fiscally responsible, you'll pay little to no interest along the way, meaning it didn't cost you a dime.

I like Dave Ramsey. His advice on credit is great for those who lack the ability to be fiscally responsible.

 

[Shakel65]

And what about debt that was unwillingly incurred?

I'm not sure this is possible. Please explain.

 

[CHenry]

And what about debt that was unwillingly incurred?

I'm not sure this is possible. Please explain.

Yes, it is unfortunately. Identity theft from ones parents can do it and I know of a case that this happened.

 

[CHenry]

And what about debt that was unwillingly incurred?



And it will likely cost you more.

No/bad credit? Expect ~4.5% on a 15 year fixed. Good credit? Expect ~3.25%. Great credit? 2.7% or less.

Assuming a $200K mortgage, that's $75,397, $52,960, and $43,448 in interest respectively. Pay it off in 5 years, you say? $23,716, $16,960, and $14,208. The difference from establishing credit history pays off to the tune of anywhere from $9,508 to $31,949 in that case. And if you're fiscally responsible, you'll pay little to no interest along the way, meaning it didn't cost you a dime.

I like Dave Ramsey. His advice on credit is great for those who lack the ability to be fiscally responsible.

How much interest does one end up paying while establishing credit prior to the mortgage? No way to know that but its probably substantial in some cases.

 

[aviator41]

And what about debt that was unwillingly incurred?

I'm not sure this is possible. Please explain.

Ever been in a car wreck where you had to be life-flighted to a hospital? BAM! even with insurance, only a portion was covered.