level of work as compared to someone with a credit score of 720 or better. A good lender will know how to lead you to the right program. An expert in loan program requirements can get someone approved for a loan, even if they have terrible credit.
Tax Liens
A tax lien is when the government places a claim on a person’s property when said person fails to pay their taxes. It doesn’t mean the property was seized, but it means that the government will take that person’s property if seizure becomes a reality. Federal tax liens are a huge issue. You must resolve them before closing on the sale. If the lien is ignored and the information pops up at the closing, the transaction is going to die at the closing table with everybody unhappy. State tax liens are similar with the same consequences and must be resolved. However, a state tax lien is less severe than a federal lien, and thus a little easier to resolve. But liens must be resolved, or the deal will fail!
Recent Bankruptcies
Like tax liens, recent bankruptcies can be an issue that your loan officer must know how to resolve. However, unlike tax liens, someone who has gone through bankruptcy is not automatically unable to get a loan; it just makes it more difficult to close. Working through a bankruptcy takes a skilled lender, especially if the bankruptcy was recent. The best thing you can do in this situation is know what bankruptcy programs are available and whether or not you will likely be approved for one of those programs.
Recent Foreclosure
A recent foreclosure or deed in lieu is a major red flag. Foreclosures inevitably mean that the loan will not be easy, maybe even impossible. Many lenders simply will not loan to
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