It is unlikely you could be approved for mortgage financing with that credit score at this time.
Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.
First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.
Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.
I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website. http://www.consumer-action.org
Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE. http://www.ftc.gov
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.
Furthemore, the preapproval consultation should be free, and you may find that much is not required of you to greatly improve your score and chances. Good luck!
1. I had no outstanding collections on my credit;
2. I had the income to make the mortgage payment
3. I was employed over a period of time.
My mortgage consultant then had my file manually underwritten. It too about 3 weeks (due to the closing crush around the thanksgiving holiday) to hear an answer, but I was approved in the long run and are now looking for a home. My husband is a foreign national and has not been here long enough so we were only approved on my salary. You may want to investigate getting approved with just the person who has the better credit. Unfortunately, that will decrease you mortgage approval amount. However, that may be a benefit in disguise. My husband and I are happy to have the cushion of his salary.
I worked with Ruth Bucher - Not a sub prime lender and she was awesome.
Your rate would not be that bad, if it is available. With rates at historic lows and non-conforming silly loans gone, you would still be looking at an excellent rate. If things were to stay flat for a while you could always refinance if it made sense or if things go up between now and when you might wait, the rate you could get now with your current credit may look really good.
I would meet with a lender and discuss your situation. Consider doing some simple credit repair, paying down revolving balances, dispute any inaccuracies and see where this takes you.
Here is some more information on the USDA program: http://www.trulia.com/blog/elliott_r_oliva/2011/07/what_is_a
Some information on credit: http://www.trulia.com/blog/elliott_r_oliva/2011/07/credit_10
FHA and USDA loans do not require stellar credit so you may quilify. Do be advised government back loans are just that government backed therefore you are still going through a lender and lenders have bad attitudes towards people with a bad credit history. We have many costumers that had a commitment to lend but in the eleventh hour something came up and the deal fell through. Be careful
Buy a home after foreclosure, short sale, deed-in-lieu-of or bankruptcy expert
Helping families/people that have lost their home get back into another in as little as 6 months
If you have no credit but collection accounts, you are not getting a mortgage. Go to your local non profit housing group for credit counseling. The counselor will go over your credit report with you and tell you what you need to do. Listen to them. Your credit not only affects you getting a mortgage but jobs, credit cards and insurance.
It's possible, but not guaranteed. FHA has a set of underwriting requirements but lenders who provide FHA loans also have their own that may be more restrictive. It's also possible that your credit scores will be different when you have a mortgage lender obtain them. Lenders use the middle score of the weaker borrower. You could be higher or lower, but the only way to find out is to apply.
Prior to applying discuss your concerns with the lender. If they believe you will not qualify, they may hold off. On the other hand, there are various programs which exist that you might be approved for, or have suggestions for legitimate ways to improve your scores fairly quickly.
One last thought, a credit pull reduces your score about 3 points. If you have multiple reports from various mortgage lenders within 10 days, they are not supposed to be reflected.