Posted by Christine Baker on July 28, 1997 at 15:47:19:
In Reply to: credit-past when immigrating posted by peter scheepens on July 25, 1997 at 15:41:41:
Pete and Leslie,
An empty credit report can be worse than bad credit. While there is a special Scoring Model for "thin files" (people with little credit and short credit histories) you need to have at least a few accounts with a couple of years payment history.
If you now have Visa/Mastercards, these accounts might show up on your report here if you transfer your billing address to the US. Check with your bank. Personally, I have no experience with new immigrants other than cash buyers or buyers with huge down payments.
Maybe another Reader/Broker could help us out here?
Do you have credit reports in the Netherlands? Maybe you can get an "original" and an underwriter might consider looking at it. The problem of course is that the underwriter wouldn't know whether it's real or whether you printed it up yourself on your laser printer. It's difficult to verify references from other countries. But it also can't hurt to give the underwriter banking references on the original letterhead. Even within the same company, underwriters will often use different approaches.
I remember how Sunbelt Mortgage declined a loan with 20% down due to lack of credit history. The borrowers were two Asian sisters who had rented a room, worked 2 jobs each and they had deposited every other pay check into CDs until they had $70K in the bank. We even submitted the savings books with the deposit histories. The credit reports were not empty, but they each had only a couple accounts, opened only a year or two earlier. Obviously, a more reasonable lender was happy to fund the loan, but we did have a delayed closing and the stress associated with it. And I never sent another loan to Sunbelt Mortgage.
Your loan may have to be shopped around. Much depends on your income, assets and down payment. Fannie Mae advertises their "alternative" credit documentation, but it's up to the lender who originates the loan to approve the loan. The lender will be responsible for the loan for several years.
If you have 25% or more for a down payment, you shouldn't have a problem getting a mortgage with a non conforming (jumbo) lender. Your rate will be about 1/2% to 1.5% higher, depending on your qualifications and the market at the time.
Be sure to talk to several brokers/lenders before you even think about buying in the US and get a lender COMMITMENT before you write offers. Prequal letters aren't worth the paper they're written on.
Good luck!
Christine