There is no greater expense for the average American than buying a home – and no greater time when your credit score can affect your financial future. So if you have home-buying dreams but only an average credit score, is it possible – or even wise – to apply for a mortgage?
To address the first question: Can someone with only a fair credit score even get a mortgage? Yes, you can.
What’s your credit score?
The Federal Housing Administration (FHA), a federal program that helps first-time homeowners with mortgages, evaluates loan applicants based on “the four Cs” – credit history, capacity to repay, cash assets and collateral. Your credit score is only one factor of the four Cs – an analysis of your credit history. If you have steady income, cash for at least 3.5% of the down payment (although more is better) and low debt-to-income ratio, you likely can get a home loan even with average credit scores.
First, make sure you know your FICO score. Federal law gives you a free annual credit report from each of the three major credit bureaus. If you are denied credit, you’re eligible for an additional report within 60 days of the denial. To view your free report, go to AnnualCreditReport.com.
read more http://www.nerdwallet.com/blog/tips/apply-mortgage-fair-credit/