Real Estate the Ramsey Way - They Won’t Put Me on the Mortgage Because I Have No Credit

Episode Date: June 23, 2025

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Dave Ramsey here and welcome to another episode of Real Estate, the Ramsey Way, where you'll learn how to make smart home decisions, avoid costly mistakes, and navigate homeownership with confidence. Jake is in Phoenix, Arizona. Hi, Jake. How are you? Hi, Dave. I'm well. Thank you. Sure. What's up? Hey, look, I'm a legal immigrant. I'm a green card holder in the United States. My wife is a United States residents. We're looking to purchase our first. home. And after speaking to a mortgage broker, because I have no credit history or credit score to speak of, he's essentially told us that I cannot go on the loan and it's going to have to be my wife by herself to go on the loan, which brings our borrowing power much less than we would we hoped it would be, which brings the quality of the home that we were hoping to put our

family into a much lower quality home. What is your wife's credit score? I believe she has about a $750 at the moment. Okay. Wow. Okay. There's a couple of variables here. I don't know the answer to.

One variable, though, is that I don't have the answer I want if I'm used, so I'm going to keep pushing, which is what you're doing by calling here. Good for you. Okay? Yes. So number one, in general, if a couple is going to go buy a house, there's two ends of the spectrum you want to be on. You don't want to be in the middle. You want to have a high credit score like your wife does or no credit score like you do.

If you have no credit score, you can do what's called manual underwriting, which is like George Camel and his wife Whitney bought a house with no credit score, same interest rate, both of their incomes, countenial. toward buying the house to get the mortgage, okay, their first home that they ever bought, as an example. Jade Warshall also has done that, okay? So Ramsey personalities have actually done it. Human beings do it all the time, but you have to have a mortgage broker that knows what they're doing, because manual underwriting is where they actually manually check and verify your income with your employment. They manually check and verify your deposit for your down payment. They manually check to see that the bills were paid to the landlord that has your name on the lease. And when they do all that, they establish that you can pay bills.

Okay? Understood. And that's how the mortgages used to be done in the 70s and 80s until the FICO score took over. Now FICO scores, mortgage brokers sometimes are just like a monkey. They look at the number and go, ooh, who, number big, or who, number not big. And that's the only way they can make a loan. They're just dumber and a rock. Okay.

But you really look at the actual human being and figure out what's going on. Now, I don't know how to do that where one of you has no credit score, and the other one has a big one. I don't know the combination of that. That's the one of the two variables I'm not sure about in your situation. And I have no idea how this green card thing plays into it. That's the second thing I don't know. Okay. But I do know this.

I do know that Churchill Mortgage that we have endorsed on this show for 30 years, they're friends of mine. if you will call Churchill mortgage and talk to them, they will tell them, I've got to have some help. I talk to Dave on the air. He said to call, and they'll explain to you in detail what you're facing. It might be that because one of you have a credit score and the other one doesn't,

that the manual underwriting for you can't be combined with her high credit score. You see what I'm saying? I don't know if you can do that or not. I've never tried to do that. I've always done it where both people, were married and neither of them had a score or both people were married and they both had a good score okay now so um and again i have no idea you what are you australian or uk what is it what's the accent uh i'm from new zealand okay all right and so um missed it all the way around but yeah so

um you're close with australia yeah got got i'm aiming in the general direction of the globe but yeah anyway the uh uh yeah so i don't know how that's stuff works. My pastor is Australian and he has a house and he's married to an American. I think he got his citizenship. He does have a citizenship today. But yeah, but he comes. So anyway, that's a good point. But Jake, too, you know, when you guys go and dice this out, you know, one of you being on the mortgage. It's not going to worry. They can't count both incomes is the problem. With that. And you got to have, you need both incomes to count to be able to get home that you're looking at. And that's a valid, it's a valid request because you legitimately

both have the income. And with a green card, you're allowed to have an income. I do know that. Okay. So, you know, you're not, it's not like you're, are you guys, is your wife out of debt? No. We're out of debt. We're on baby step three, so we just managed to get it. You got a house now? It may take, yeah, do you have a mortgage now? We do have a mortgage. It's my wife's home. We're in Phoenix. We just put that time on the market. Sure. Because that'll keep it. I was going to say there is a season.

Let hers go to zero. But it's not going to as long as she's got an open account. Yep. Yeah. And so she's going to have an open account long as she owns that house, and you don't need to sell that house just to do this. So I don't know the answer to those two questions, but if I were in your shoes, I would go to,

I'm not going to take one mortgage broker's opinion. I'm going to go get, I'm going to keep asking somebody will I get the answer I want? Sure. Or tell I learn enough about it, figure out how to somehow game this system because it's an unreasonable. I'm with you. Not counting your income is unreasonable. Yeah. Yeah. And so I'm not going to accept an unreasonable answer because it's not logical. The point is your income is there and it can be used

to pay the freaking bill. So the mortgage company's not not counting that and for some reason or another is just bureaucratic bull crap. Yeah. So I'm going to find some way to work around it. I will tell you another. Try Churchill, and if you can't get this figured out with them, you probably can. I think they'll solve it. But the other thing you can do is go to someone like Fairwind's Credit Union, our other, one of our other advertisers, and they portfolio the loans, meaning they keep the loan in-house. And if they're going to keep the loan in-house, that means they make up the rules.

And they can just look at it and decide we're going to count it because this guy's reliable. We're going to do manual underwriting on him, and we're going to look at her credit score, and we're going to count it. And they can just decide to do that because what they're trying to do is to meet what's called conforming lending guidelines so they can resell the loan. Brokers don't keep the loans. They resell the loan. And in order for the loan to be marketable when they resell it, it has to meet these guidelines. And your guy can't figure out how to meet the guidelines in your situation. Churchill may be able to figure it out, but if neither one of them can go to a place that portfolio.

meaning they keep the loan, they're not selling the loan. So whatever guidelines they're comfortable with, they can just do it because the loan's going to be on the books at the credit union. Yeah, that's a great point. And that one will work as well. That's another way to get at this. Wow. Interesting.

Interesting. I've never run into that. Yeah. Well, it's always a, it's such a frustrating thing because it creates these hurdles, which is true when you don't live with debt and you don't have a credit score, there are going to be some of these hurdles that you run into. you can mostly always get past them. He might just have not been in the country long enough to establish a credit score.

Well, that's awesome. Yeah. Wow. But you guys keep on the track, though, because I think the mindset that you guys are in sounds like a good, stable place. So don't go off the reservation and do something crazy just to get this house. Yeah. I knew this house, so I'm going to take a 14% interest rate. Nope.

Nope. We'll pass. We're going to work on a different way. Another way to skin this cat. Hey, guys. Thanks for listening to Real Estate. the Ramsey way. Now, if you're here, you're probably thinking about buying or selling a house. It's exciting, and one of the biggest financial decisions you'll ever make. But you don't want to do it

with an inexperienced agent who will rush you into costly mistakes, like the ones some of our callers find themselves in. You need a pro who knows what the flip they're doing and will keep you on track with your financial goals. That's why we only recommend Ramsey trusted real estate agents. These are vetted, handpicked pros who actually listen to your needs, guide you through the process, and fight to get you the best deal. To find a Ramsey trusted agent near you, go to Ramsey Solutions.com slash trusted agent. That's ramsysolutions.com slash trusted agent. Sarah is in Rochester, Minneapolis. What's going on?

What's going on, Sarah? Hi. ladies. I love listening to you both, so thank you for taking my call. Thank you so much. Yeah. My question today is about my husband and my situation if we're ready to buy the house that we're currently living in, and we have the opportunity to do that on a contract for deed, actually. From your parents' home?

Yes. Where are they going to go? It's not my parents' home. My parents own the home. Oh, okay. Were they using it as a rental, like for an investment property? It was actually my grandmother's home. Oh, okay.

And so they've had it. What have they been doing with it the past couple of years? So we've actually been living in the home since she passed away for the past six years. Okay. My husband and I wanted to get married before we would move in together and then also consider purchasing the home. so now we're kind of in this spot where we've been here a long time and we've been paying rent and we just want to know in our financial situation is isn't this a good time and maybe part of it is we're just a little scared to make the jump sure how much are they selling it to you for

around 400,000 which is the other scary part okay and is that like a market value or is that discount, it's market value. So you're not getting any kind of deal because it's grandmother's home? Well, there may be a little bit of a deal in there, but I would say probably maybe no lower than like 380. Okay. No, that's fine. Yeah. And do you guys, do you feel like financially, are you guys out of debt and have some savings? So we've been working really hard on getting everything paid off. We actually just paid off one of our vehicles. Oh, congratulations. For a while.

Thank you, which was really motivating. So we do have one other vehicle to pay off that we still have $20,000 on. Okay. How much you guys make a year? We're making around $145,000. $145. Okay. Do you have money saved at all?

Any savings? Well, I have, we have money saved about $15,000 in a CD. Okay. And then we've been keeping like a little bit. of an extra savings for us with the kids, but the rest we've really tried to put towards our debt. Okay. So what would be the down payment for the home? So we could put a down payment of 20,000. How? Where is it coming from?

That we had set aside to put that from, to put that. So you have an extra 20,000? Yes. Okay. I would, I would slow to do that. down a little bit, Sarah. I think it scares you because you guys are in a little bit of a, eh, shaky situation. I take the 15, some money from the 20, pay off the car tonight. You'll have 15 left. That's your emergency fund. Then I would resave for a down payment to make you feel good about it. So I think you guys are still a few more months away, maybe a year away. But the good thing is the house isn't going anywhere. That's right. It's grandma's house. So tell your parents, hey, we need a few more months and I'd be out of debt, emergency fund with a good down payment.