The best way to know for sure about your mortgage qualifications is to contact a lender to review your financial profile. You should go to more than one lender because each lender has different standards. One may qualify you when another won't.
While the FHA has some guidelines and says borrowers can qualify for a low-down-payment FHA loan (3.5 percent) as long as they have a credit score of 580 or higher, most lenders require a FICO score of at least 620 or 640 for a loan approval. In fact, Ellie Mae reported in November 2012 that the average FICO score for an approved FHA loan in October 2012 was 700 for a purchase loan. The average FICO score for denied FHA purchase loans was 670.
You should check your credit and talk with a lender about the best steps to improve your score. If you can pay down some of the credit card debt, that will boost your score within 30 to 60 days.
The amount of debt you have is also important in comparison to your income and how much you want to borrow. The FHA allows lenders to set their own guidelines, but usually your minimum monthly recurring debt payments cannot be above 45 percent of your monthly gross income. According to Elle Mae, the average debt-to-income ratio for approved FHA purchase loans in October 2012 was 40 percent and the average debt-to-income ratio for denied FHA purchase loans was 46 percent.
In order to obtain a mortgage approval, talk to a lender. Your credit score and your debt may not be an obstacle to an FHA loan; but if they are, a lender can identify ways to make you approval-ready as soon as possible.