Getting a Mortgage with a Felony

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Can I obtain a mortgage with a felony, and no credit?


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Yes, you may obtian a mortgage with a felony. However, obtaining a mortgage with no credit is a more complex than simply answering the question yes or no. The answer is maybe.

It all depends on compensating factors. Do you actually have no credit at all? Or do you have some credit with no credit scores? You see the Banks will look at all of this to decide if you fit into their criteria. If you have no credit at all they will want to see alternative credit. Examples: Cable bill, Car insurance, Energy bill, Cell Phone, anything that you have paid on time for the last year. This would help you when trying to buy a home with no credit.

Answered over 6 years ago

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The felony is not an issue per se. There is no question asked about whether or not you have ever been convicted of a crime anywhere on the application for a mortgage.

Having no credit will be the problem. You need to get some tradelines and keep them paid well. If needed, at least get two or three secured credit cards. The rates and fees are horrible on these but if you do the right things with them, they will establish credit for you and save you a great deal later on. Just make SURE these cards report to the major credit bureaus or they will do you no good.

Also, if you can get a car loan it will help your credit a great deal. Again, make sure it reports to the credit bureaus. Try and build these cards up so the limit is above $1,000 on at least some of them. Use them for small purchases every month but never use more than 25% or so of the credit limit.

For instance if the limit is $1,000 don’t ever let the amount you owe on it go over $250. Also keep in mind that credit cards only report once per month to the credit bureaus so paying it off at the end of each month doesn’t mean the credit bureaus will see it that way. If the credit card company reports on the 12th of each month and you have used $900 of your $1,000 credit limit as of that date, the bureaus will see that you have used 90% of your available credit on that card regardless of the fact that on the 25th of that month, you paid the card off.

Also, if you have been recently incarcerated it may create a job gap for you. After two years, it won’t really matter so be patient, work on you credit and build up some cash reserves. Having at least two months of house payments saved up (after closing cost etc) can make a big difference in getting approved for a loan.

Answered over 6 years ago
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