Is it impossible for me to get a Mortgage?

[Anonymous]

Hello everyone,

As a recent victim of identity theft and before that I let my credit burn to the ground when I moved abroad, I've been trying ever so dilgently to improve my credit to be able to buy a home for me and wife. I plan on using my VA home loan benefit. However, it's a second tier loan/benefit because I lost my first home back in 2009/2010. The VA paid out 36,000 to the lender. That leaves me with about 309,000 left for a mortgage. I want to buy a home that I'm currently. The value of house is about 200k here in central Florida. my credit scores are (using vantage credit karma app) Transunion 630, Equifax 599 and Experian (using their app) 593. My wife has about a 620 across all 3 credit agencies. Here's a quick rundown of our debt (We are each authorized users on each of these cards all these show on both of our reports)...

Badcock Furniture $183 out of $3500

Fingerhut 148 out of 1100 (with a temp increase to 1800) (I hate fingerhut btw but they helped me start fixing my credit)

NavyFed 3000 out of 3000

Overstock 796 out of 1550

HSN 528 out of 6500

CreditOneBank 490 out of 500

CapitalOne 367 out of 500

Amazon 407 out of 2100
Wife has about 3k in student loan debt (She's still in school)

I have about 20k in student loan debt which is currently on hold due to my recent identity theft issue. But while I was out of the country for 3 years I let them go and they have tons of lates on them. All the credit cards were open around 2016-2017 when we moved back to the states and have never been late and we pay a few bucks more than the minimum. I have some 2 car loans I paid off on my credit report with no lates on them. Between all these cards together, I'm around 35/36% usage.

We both make about 30k a year so 60k collectively. We have no car payments. We have very few bills. Between rent and all the bills we pay about 1700 in bills a month (which includes rent that is 1200) and we make about 3620 take home which leaves us with about 2420 every month for food and what not. We have about 7k in savings.

Which cards should we bring down the most? Should we use our savings to pay down the credit cards or keep it in the bank to show a lender we have money saved? What can I do more to try and improve my credit score? How far away am I from relastically being able to have a lender give me a mortgage?

Thank you to anyone who takes the time to read this and provide me with some words of wisdom.

[NC_Mtg_Loaner]

Pay down Navy Fed and Credit One as quick as you can...realistically, if you can keep them below 50% utilization ratio you'll be okay, but you should start paying on those student loans if you want to see  your credit score improve.

I might be wrong, but in my opinion, student loans appear to work like anchors prohibiting your credit score to rise above 640 until you have a reasonable history of paying them back being displayed in your credit report profile.   

Has your VA Entitlement been restored since you "lost"  your first home?  

Do you have a clean CAIVRS report?

[Anonymous]

I have my certificate of eligibility from the VA and the old house has been off my record for some time. I didn’t even know what CAIVRS was until you mentioned it but it says I can’t check right now because it’s 10pm. Thank you for your response! I’m going to knockdown navy fed and creditone as quickly as possible then. When I’m up to pay my student loans again in April they want 191 a month. I’m currently searching the boards to see if I can get that payment lowered under 100 bucks per month in order to show that I’m at least doing my best to pay it back. I’m also trying to see if I can get my mates removed by sending a goodwill letter but the problem is that the latest appear on my sallie mae accounts before navient took over. In the eyes of navient and the credit agencies I’m ok, but these old sallie mae ones are just terrible. I feel if I could get them removed my score would rocket way up. But I don’t know really. I’m open to any suggestions.

[NC_Mtg_Loaner]

Why wait to start paying your student loans back now?
 

Simply go over to the student loan forum and see the type of frustration, angst and anguish everyone experiences when dealing with creditors looking to get repayment from former students who borrowed money to pay for their educations...

http://ficoforums.myfico.com/t5/Student-Loans/bd-p/studentloans

What do they all have in common?  They are all avoiding a way to pay them back?  Heck it's to the point that some regret borrowing that money in the first place.   

Now, here you are with an opportunity to pay in January, (whoops, sorry--it's February already now) but preferring to wait until April when they come out of forebearance?  Again, I'm no credit expert, but I approve a lot of borrowers for mortgage loans who've succesfully conquered the student loan burden and I'd recommend paying them ASAP in order to build positive payment history.   Even if you make payments of $191 now, you'll have a 3 month history of paying student loans come mid-April.   

It's not like $20k in student loans is a lot of money, but the history of not paying your loan adds a layer of risk that hinders your credit score more than you can believe or you'd likely have paid that money back yesterday...