4 Reasons Why Lenders Reject Alaska Mortgage Applications
If you're just beginning the home buying process in Alaska, your first step will be getting pre-approved with a local lender. Next up? Finding your dream home and submitting a mortgage application to keep the purchase moving forward. However, many buyers find their application in the rejection pile due to factors they weren't aware of at the time.
As your local real estate experts, Madden Real Estate has provided below four reasons why your mortgage application may be rejected so you can be sure to avoid them:
You don't have enough credit
While poor credit can put you in a sticky situation with lenders, not enough credit can do just the same. It is essential to build your credit history over time to show lenders that you cna properly manage debt and pay on time. If you fail to do so, they may be leary of lending you any money via mortgage loan.
You opened a new line of credit
It is important to avoid taking out any new lines of credit during your home buying process as these can ding your credit score. Even if just by a few points, your lowered credit score could enter into a gray area with lenders and they may choose to not approve the loan.
You changed jobs
Lenders will look for two years of consistent employment before approving your mortgage application. If you can help it, hold off on changing jobs until after your home closing. Moving to a new company beforehand could slow down your mortgage process or cause you to be denied altogther.
You have outstanding debt
Lenders want to see that you can properly manage debt so when you fail to pay a bill, it raises a red flag. What's more, the unpaid debt could be turned over to a collection agency which is then forced to report to the credit bureaus. If you can pay a bill in full, by all means do so, if not, consider working on a payment plan if offered by the hospital or doctor's office that you owe.
Ready to begin your home search in Eagle River, Anchorage, Fairbanks, Palmer, Wasilla, or North Pole? Give Madden Real Estate a call today!