“Lots of Income and NO Credit Scores”

I have run into these situations a number of times, but don’t really understand the thought process. These folks made some serious income, have a good size down payment and have no credit, as they have been paying cash for everything for the last 5 years. They had credit cards at one time, but went to a seminar and it was recommended that you need to cancel all your credit cards and pay cash for everything. These folks have really been drinking the Kool-Aid. 

The good news I have a few lenders that will do this mortgage, unfortunately they will pay a slightly higher interest rate. These folks were delighted that I could get them a mortgage, but really weren’t happy about paying an 1/8 interest rate higher.   

The moral of this story, it doesn’t hurt to have a credit card or two. Pay off the balances each month and build your credit scores. In today’s world, paying cash for everything is just too much work and pretty silly to carry around that much cash.