Sadly....you might not be able to. FHA looks for a 620 FICO score and that would allow you to get into a home with 3.5% down. What you should do is concentrate on raising that score. Obviously you need to pay everything on time, but also open a couple small credit cards and use them responsibly. You also want to make sure that none of your credit cards/lines has more than 50% balance. These are a few things to boost your score.
I would also suggest looking at your report and make sure everything on it is correct. If not...dispute it with the 3 companies and get the wrong information removed.
I hope this helps.
Sub 600 credit scores should not be getting loans!
A borrower needs to demonstrate the ability to manage debt before they take on the largest debt obligation of their lives. Technically FHA does not have a FICO requirement...realistically how many sub 600 scores will or should be approved?
First, be very wary of real estate agents answering mortgage questions. FHA literally has NO CREDIT SCORE MINIMUM. Those that have stated there is an FHA 620 score are WRONG and should not be answering questions with bad information. Lenders, wishing their loans to be paid back, use credit scores as a measuring tool, it is the lender that imposes score minimums. I do not know of ANY lenders in this market willing to go below 560, and if they do a loan between 560 and 620, the borrower pays a much higher interest rate.
That being said, a 547 is, plain and simple, a terrible credit score and reflects a willful lack of discipline when handling your finances and terrible credit management. There are very few lenders that would take the risk on your loan, especially combined with "no big downpayment."
I would advise you to work on your credit and save for your downpayment. Once accomplished, you can apply and get a GREAT mortgage to buy you and your family a new home. There are many good loan officers that would help you formulate a strategy today to improve your scores over some period of time, then help you get a loan when your scores recover. During the process, as your scores improve, your LO can advise you of your mortgage options as they open up with your scores moving higher. When we help a potential client improve their scores, we do not charge for our services.
Good luck, Jim
There are ways to increase your credit score fairly quickly which can allow you to get approved and lower your interest rate also. A loan officer that specializes in credit analysis can help you obtain your goals faster than a credit repair company and save you a lot of money in the process. we have learned many ways to help our clients get pre-approved quickly depending on your particular situation. I would recommend going through a lender becuase a bank will not help you out with credit issues and a broker has to go through many different lenders and if they are not an actual expert in their field can hinder your results (Unless they've come recommended). no offense brokers!
I would be happy to look at your credit report and make suggestions or refer you to people who specialize in this but beware of "debt consolidators" who promise to pay your bills for you for a fee or eliminate debt by some legal magic. Those usually wind up costing you money and lowering your score further.
Let me know if I can be of help.
I work with a great lender that has a program that you can follow to help raise your scores. I also suggest that you don't close out any accounts, and keep your balances less than 50%.
I hope this helps you.