VA Home Loan Approval- how to raise scores??

[Anonymous]

I currently own a home that I purchased with a VA loan in 2016, that has never been late. It has a balance owed of 199k, a real estate agent advised me I would get 250-280k for my home if I were to sell now. I would like to sell this house and use a VA home loan to relocate my family a few hours from where we live currently. I will include current scores/ account info for advice.

My current Fico 8 scores are: 617, 599 and 613. My fico mortage score is a 583.

I will list my accounts now:

Open accounts-

capital bank- $40/200 opened Oct2018-never late

total visa- $8/300 opened Feb2019-never late

ally auto- $41159/45900 opened June2017-never late

midland mortgage- $199538/211000- opened Aug2016-never late

Conns- $3591/4521- opened Nov2018- never late

These are my negatives:

medical collection $693

1st progress- chargeoff dec 2017- $191

cw nexus- charge off feb 2018- $1417- recently offered to settle for $500?

greensky- chargeoff nov 2017- $2700

I also have two accounts from Frost in 2013, totaling about $5000, due to fall of my report next year, but they report as a charge off every month still.

I have chargeoff accounts from overstock, aafes and credit one that are reporting a zero balance but still are listed and they refuse to goodwill.

I fell behind on bills, after becoming completely disabled and having to wait for VA and SSDI benefits to kick in. Since that happened, I have been working diligently to fix it. 

My total monthly income is $6200 tax free and I would ideally like to sell this house and move within the next 3-6 months. The homes in the new area are about 400k, but I am 100% disabled Vet rating so I am not required to pay any property taxes. I feel as if I could easily have a 2k mortgage on a 400k loan and live comfortably on what is left. I would like to sell my current home and pay off the vehicle loan and then have only the mortgage payment at the end. Is this doable? It seems as if no matter what positive payment history I make, the negative weighs so hard on me still. 

I plan to pay the credit cards to a zero balance so that should give me some boost on the next reporting period. Can anyone give specific advice as to how attain a better score? Is a 400k loan even feasible? Thank you for taking the time to read this.

[ShanetheMortgageMan]

You might be surprised how much that Conn's credit card with the $3,591 balance vs. the $4,521 limit is bringing your scores down by.  When there are negative marks on credit, having high utilization on revolving accounts really magnifies the impact on your scores.  

I'd see if 1st Progress, CW Nexus and Greensky would be willing to do a pay-for-delete, which you can find details on at here.  That is where they agree to delete it off credit (basically what they are doing is just not reporting the debt any longer) in trade for you settling/paying it in full.  Not all creditors agree to do it.

The Rebuilding Your Credit section will probably have more accurate and abundant advice on how to improve your scores, as people in this section are more experts in how to qualify for a mortgage and other mortgage related questions.  Even though your goal is to eventually qualify for a mortgage, your question pertains to how to improve your scores.

Your income should be OK to qualify you for the amount of mortgage you are seeking, particularly since you are exempt from property taxes.  Just make sure the loan officer is able to put together the required documentation to prove you'd be exempt from taxes, underwriting normally will accept it.  Your credit score is probably fine to qualify now, but there is usualy a very good break on interest rates when you hit a 620+ score, so you are correctly addressing your scores first before making the move to sell & buy.

[homeloanexpert]

Hello my fellow Veteran and thank you for your service. Yes the rates are little better at 620+ but not substantially. Like most people who have less than perfect credit,  they usually move forward with the best loan and terms available and once they raise their scores, the can refinance into a better loan down the road. In your case the VA offers a IRRRL which is a no qualify rate and term refi. As far as credit goes, the VA does not necessarily require that you pay any open collections unless they're government related such as Military Star, AAFES, etc. All charged off accounts are disregarded as well as all medical bills. The most important factor would be your payment history within the last 12 months. With your 100% rating that could save you thousands of dollars in real estate taxes as many states lower or waive them which would really lower your monthly payment. From this desk, and based on your scenario are good to go.

Best wishes to you!