Most Lenders require a minimum credit score of 640 in today's lending environment. It is unlikely you could be approved for mortgage financing with that credit score at this time.
I recommend speaking with an experienced Mortgage Banker to get properly prequalified. The Mortgage Banker will review your Income, Assets, and Credit. If you are not qualified due to your credit score, your Mortgage Banker can recommend a course of action to improve your credit and become qualified in the future.
In general, here's what I recommend to my clients who have low credit scores but a strong desire to buy a home:
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://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/bcp/edu/pubs/consumer/credit/cre13.shtm
The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.
I am a Licensed Mortgage Loan Originator in New York State working for a Direct Lender if you wish to explore this further.
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker â€“ NYS Dept. of Financial Services