There are several lenders that will grant you a loan with a credit score as low as 620. However, your interest rate will be somewhat higher than average, and the closing costs you incur will be somewhat higher as well.
A minimum credit score of 640 is the score you want to shoot for. And, if you can get it to 700 or so, you will have no trouble finding a lender. Especially with a debt to income ratio of only 15%.
The good news is that, with a little bit of work and due dilignece, you should be able to raise your credit score to a more acceptable level in as little as 3 to 6 months.
Just pay all of your bills on time, and in full (if possible) every month.
And, if you only need to establish a credit history, a pre-paid (you deposit monry into an account for future spending) Visa or Mastercard. Shop around with you rlocal banks to find one with low costs.
I hope this helps.
So many times people do what would seem like a good idea; pay off a past due or pay off a credit card and close the account to later discover they actually lowered their rating.
Loan officers work with credit continually and many times can suggest a notification or two and presto the rating is up. Maybe there is a late pay that didnâ€™t happen or maybe should have fallen of the report months earlier.
Go to Your-Road-Home.com and read article #5A. Good information on credit and also you will find Consultation Interviewing Loan Officers and Consultation Interviewing Real Estate Agents will serve you well.
Also an article on FHA and FHA 203K.
Be sure to read about the MCC tax credit
Hopefully gathering this information will shorten your time line to owning your own home. After you gather all the information yu can find, and Trulia is a good source, you will also find that Trulia is a good source for loan officers and real estate agents offering their services in your area.
Best of Luck, Stephen