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Company Loan Type APR Est. Pmt.

Great credit but owe back taxes

I would like to become a homeowner, first time. My credit is great at 730. I owe back taxes but have a payment plan in place and have not been late.

Could I qualify for an FHA loan?? It would be great to use the $8000 tax credit to wipe out the back tax debt.

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Dogday,

It is possible to get an FHA approved loan even though you owe back taxes. But the primary conditions for the qualification depend on whether you have a well established repayment plan in place and whether you have been making the payments in a timely manner. Since you have never been late on the payments, you can go for the FHA loan. However, your monthly tax lien payments will be taken into consideration during calculation of your qualifying ratios.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:17 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thank you! I don't think I have a lien. Would I have been notified? The payment plan has only been in effect 6 months however.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:17 | Post subject:

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Guest,

It would have been better if you could show at least 12 months of timely payments towards the repayment plan. But if you have made your payments unfailingly for the past 6 months, I believe it is worth a try to apply for a loan. I understand that the credit criteria are stricter than before, but given the credit score you have, I think the lender can consider offering you a loan.

You may also go for a no-obligation free mortgage consultation with the lenders in this community and see if you can qualify with the back taxes. The lenders will assess your financial situation, your credit scores etc. and will let you know about your chances of qualifying for a loan.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:17 | Post subject:

gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

bear in mind that regardless of what fha guidelines say, an underwriter or a lender can make decisions that are contrary, if they feel there is too much risk. by that, i mean that the taxes you owe, even though you're in a repayment plan, could cause a lender to deny you. it's a possibility; a decision could go either way.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:17 | Post subject:

raymond's picture
raymond | Joined: July 3, 2009 09:38 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

I'd research the USDA guaranteed home loan program too, if I were you. Every single loan is manually underwritten, and they don't have the same rigid underwriting standards compared to FHA - they're more flexible. I like their program better too. No down payment, no Mortgage Insurance, and they only offer a 30 fixed interest rate.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:17 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thank you. Now I know where to start.

Like | Dislike | Share | Posted: Fri, 02/05/2016 - 02:17 | Post subject:

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