Most buyers are purchasing homes with an FHA loan because they only have to put 3.5 percent down instead of 5 to 10 percent with a conventional loan. There are things you can do to increase your credit score with all 3 agencies.
First determine if your low score is from high debt OR from being late on payments OR both. If it is from high debt then you can pay down the balance which will up the score. If it is collections and late payments many times you can dispute those negative items and if they don't respond with proof within 30 days it will be deleted from your record.
On balances generally it works like this.
If you have a 1,000 limit credit card and are at 75 percent or above of usage it hurts your score a lot. 50 percent it is not a positive or a negative against credit and 33 percent or below balance the computer scoring model adds points to your score. The reasoning is if you are using a lot of credit then you are in financial trouble so it dings you for it. If you can't pay the balances down you can ask for a credit limit increase which will lower your available balance usage and help your score.
While it is true that FHA does not require a credit score the lenders who fund the loans do and they like to see a middle score of 620 or higher. Find a good mortgage broker who will go to lunch with you and point out what you can do to improve your credit score over the next 30 to 60 days.
Good luck-no legal advice.
You might consider working on your credit rating first to get your score up to where you can obtain financing. You make a great income it appears but your credit needs some work first. Once you get a good credit score you can then look for a mortgage product, and then you identify the property to purchase. Good luck!
The Credit Repair Expert
You might be able to get a loan now, but the interest rates and points would really hurt you. You would be better off improving your score and then buying.
generally speaking income x 3 = safe mortgage.
you will need 3.5% down and more for closing costs.