Anna is partially right. Scores below 580 require 10% down. There are lenders (First Guarantee) that go as low as 530 but you can't have any open collections from 2010 and you need to have at least one credit card that has been open and paid on time for one year. Rate is in the mid to high 7% range. You are better off trying to find a way to reach 580. You stated that you have a 563. Is that the middle of 3 scores or is that just one of three scores? If you want to send me you credit report (black out ss#), I'll be glad to coach you to recovery. I am licensed in FL.
FHA require a minimum credit score of 620 and 3.5% down, some lenders will allow 580 with 10% down, however the interest is higher. Work on getting your credit repaired--pay off old debt, pay down debt, keep credit cards below 50%, dispute old negatives, etc.
Why rent when you can own? You could ask the 3.4 MILLION mortgage holders in this country who are 60 days or more behind in their payments. I'd bet a couple million of them wished they'd stayed as renters. Probably the single best piece of financial advice in the past decade was when Forbes recommended in 2006 that people sell their homes and become renters. So, why rent when you can own? Because sometimes it makes more sense.
I help many buyers in your situation, it is often just a matter of looking at your credit report and tweaking it a bit to bump up the score. You are not that far from a 580, and sometimes something as simple as removing a mistake from your credit or paying down a credit card can give you those extra points you need.
Not all lenders are patient and will walk you through how to improve your score. However, I have just the lender that can help you with that and can also assist you with $5000,-$7,500 of downpayment assistance if you are first time home buyer.
Feel free to shoot me an email or contact me on my cell for details.
If you are needing some assistance in locating a lender, feel free to contact me. There are lenders that will loan FHA with a credit score from 530, but you will need to put 10% down. I work in the Lake County area, but have many lenders out of the Orlando area.
Lisa Jones, GRI
With that credit score it will be almost impossible to get a bank loan. You need to raise your credit score to 620 to qualify for a bank loan. If you need help doing that I can put you in touch with a lender that will help you raise your score over the next year or so.