You Have Unpaid Tax Liens or Judgments
You might have forgotten about that old tax lien or judgment, but it’s still out there waiting to haunt your home loan application. “Having an unpaid tax lien or a judgment can cause your mortgage loan application to be rejected and can come up the week before settlement,” Thomas said.
“Just because an old tax lien or judgment is no longer reporting on credit doesn’t mean it went away,” he said. “Lenders are required to have a title search done prior to closing, and the title search will find any unpaid federal or state tax liens — as well as any unpaid judgments. If you don’t have the funds to pay them, you will not be able to close on the loan because title won’t be able to issue a clear title policy to your new home.”
