Are There Mortgage Loans That Do Not Require A Credit Check?

By Ann White

Getting no credit check mortgage loans can done in two ways. Reverse mortgages and Home acquisition program loans. Each has different requirements.

Why do reverse mortgages not require a credit check?

Reverse mortgages do not require any loan repayment from the borrower during their lifetime, so proof of the borrower’s ability to repay the loan is actually a moot point.

How are reverse mortgages funded if the borrower does not make regular repayments.?

Reverse mortgage loans are for people age 62+. They receive a cash payment now without selling their home. The lender is repaid both principle and interest when the homeowner dies or moves into a long term care facility from the home sales funds.

Are no credit check mortgage loans available to younger borrowers?

Yes. They are not as simple and straightforward as conventional home mortgage loans. They are called home acquisition loans and are usually offered by individual real estate investors to people with bad credit. These investors will buy a home that has been on the market so long it is offered at a discount. They offer the home to the low credit rating buyers as a lease purchase agreement. The lease purchase agreement protects the investor from losses due to early default. It also encourages the buyers to stay in the home to build up equity over time and build up their credit ratings over time.

Where do real estate investors reap their profits from these home acquisition mortgage loans?

First, they are offering it to the buyers at the undiscounted price. This gives them immediate profit in the house. Some investors will even use this profit to help with the down payment on the lease purchase agreement. The investors also profit because the lease purchase amount is based on the unreduced home price.

Related posts:

1. How Does A Reverse Mortgage Work If I Have Bad Credit?
2. How Do Conventional Home Loans Compare To FHA Loans?
3. What Are The Advantages Of A Reverse Mortgage?
4. What Is Hard Money Lending On A Mortgage Loan?
5. What Are The Benefits Of A Reverse Mortgage?