FHA loan--when will I be able to apply?

[AAG1903]

My current scores are 

Quizzle 572

MyFico 568

Credit Sesame 581

Credit Karma 550

I would like to purchase our first home within the next year or so.  Any insights on what type of loan is best (I've read FHA may be for my situation)?

and any tips on who to go through?

or if I'll ever get approved?

(my scores have gone up about 30+ points since joining here about a month ago!!!)  

TIA!

[BrianB_The_Loan_Professor]

Not enough info to know if you will qualify but credit wise I would continue to get your scores up if you can get above 600 you will have a few more banks willing to work with you - I have seen a few people try to get a loan with a 580 but have to yet to hear of a single one closing  the banks are very strict with poor credit files - 

Good Luck

Brian

[mom22sonz]

Great job getting your score up. Best wishes with this process!

[Chbraswell]

I find that when you have to recover from credit issues to buy a home you should take a year to just work on clearing your credit and saving up the downpayment.  Most creditors like to see a minimun of 620, though I have heard of some banks wanting at least a 600. I would recommend to pull all credit reports from the three bureaus reviewing what is showing on your report. Identify what is causing your score to be low. If it's because you have lates that could hinder you a bit. You will need to right LOEs explaining why you are late. Or if you have collection item you may have to pay a few off.  See what your utilization amounts are (if you pay down your cc's they will help increase  your score)  FHA would be pretty good if you do not have a large amount of money to put towards a downpayment as they require as little as 3.5%. Conventional loans are more stringent and requires 20% down. 

[StartingOver10]

Conventional loans do not require 20% down.  The minimum down payment for conventional is 5%. There are also programs at 10% down and 15% down and naturally 20% down.

There is even a Freddie Mak conventional program available with 10.1% down with no mortgage insurance.

[Chbraswell]

apologies! But you need 20% down to forgo PMI right?

[ShanetheMortgageMan]

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@Chbraswell wrote:

apologies! But you need 20% down to forgo PMI right?

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Just need no more than 80% financed on the 1st mortgage to avoid PMI with conventional, meaning you can put 20% down or get a 2nd mortgage for the amount being financed over 80% (typically 2nd mortgages will just go to 90%).

[Chbraswell]

awesome! tks