Should I bother applying for a FHA or is it a waste of effort?

I currently hold a score of 665.

Is a score of 665 too low to be considered for a home mortgage? Should I apply or should I wait?

Additional information: debt-to income ratio is 18%. Score 98% on time payments. 3 derogatory credit remarks, one of which is payed off. total debt of 62K with 53K belonging to student loans. Average yearly income of 49k.

Answer:

Short answer: You are not wasting your time applying for an FHA loan now. Interest rates are attractive, and there are many properties to choose from today.

Longer answer: Because your credit score is greater than 580, you may qualify for an FHA mortgage that requires a 3.5% down payment. You mentioned a couple of key factors in qualifying for a loan, including:

* Your credit score. 665 is fine for an FHA loan. Today, the FHA requires a 580 minimum score
* Your low DTI. An 18% DTI is a good starting place.

But lenders look for several other factors, including:

* Your income history. Typically, lenders want you to work in a field for 2 years.
* Your reserves. Savings, retirement plans, investments, and so on.

You mentioned a $150,000 loan. The FHA requires a 3.5% down payment. Do you have $5,250 set aside for a down payment? To learn more about qualifying for an FHA loan, see the Source(s) below.