Sometimes, buying a Havasu home feels like a game of "hurry up and wait". You're in a rush to get your offer in. Then, you wait for it to be accepted. You rush to get all your paperwork to your lender. Then, you wait for approval. The Federal Reserve says that approximately 12% of all applications gets rejected. That's one in eight. And some of these are for silly reasons. Here are a few very avoidable reasons your mortgage application might get rejected.

Avoid the embarrassment of having your mortgage application rejected by watching out for these common, silly mistakes Lake Havasu home buyers make.

Why Was My Mortgage Application Rejected?

Credit Cards

Search Lake Havasu homes for saleOne of the reasons a mortgage application might be denied has to do with your credit cards. Less is more, right? Maybe you've always paid in cash. Perhaps you only carry a credit card with a low limit to use in case of emergencies. And it's very possible that you recently opened up a new card or two. Unfortunately, these might all hurt your chances of a loan approval. Why? Lenders want to see a variety of credit used over an extended period of time with consistent on-time payments. Some lenders will look at rental history, school loans, and even cell phone payments for anyone with little to no credit history. But that's rare.

And another thing to keep in mind. Anytime you apply for credit, your score gets "dinged" by a few points. If you are right on the verge of qualifying, this small amount might be just enough to dip you below the minimum requirement for your lender. So, hold off on applying for any new credit (cards, gas, furniture, cars, anything). You'll have plenty of time after you move in.

Lying on the Application

One of the easiest to avoid reasons a lender rejects a mortgage application is when they discover that the applicant has lied. Lenders do their homework thoroughly. If you exaggerate how much you make or say this will be your principal residence when it's actually going to be a vacation home or rental property, you're committing mortgage fraud. And that's a very serious offense that could involve jail time. Honesty is always the best policy when it comes to a Havasu home loan.

Job Change

Mortgage application denial also happens when you change jobs. Most lenders want to see at least two years on your current job. A job change due to a layoff is unavoidable. But, if you're considering leaving your current company for something else, wait until after you receive approval on your mortgage application.

Old Medical Bills

Finally, another way to avoid rejection of your mortgage application is to pay off old medical bills. Most of these eventually get sent to debt collectors. While the hospital or doctor's office where the bill originated might not contact credit reporting agencies, debt collectors will. And this has a negative impact on your FICO score. If possible, pay them off in full right away. Otherwise, make payment arrangements with the collector. At least then you can show your lender that you are trying to be responsible in paying off the debt.

Keep these silly reasons a mortgage application gets rejected in mind when you're trying to finance a new Lake Havasu home. That way, you can avoid the embarrassment of a denied loan. If you have any questions, contact me.

Suzan James, Havasu Realty, for all your Lake Havasu real estate needs