Financing in 92555>Question Details

Butkus35, Other/Just Looking in Moreno Valley, CA

VA Mortgage

Asked by Butkus35, Moreno Valley, CA Sun Nov 27, 2011

I have a tax lien for 18.7k and I owe child support arrears on my credit. My support shows being paid on time with no lates in over a year. IRS.GOV says that starting in 2011 they will remove liens if you owe 25k or less and enter into a debit payment agreement. If I get the lien removed will I be able to get financing for a VA loan? Right now my mid score is about 580 with the tax lien appearing on my credit.
Thank you in advance.

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Check out the California Dept. of Child Support Website. Here's a good place to start:

http://www.childsup.ca.gov/Payments/CompromiseofArrearsProgr…
0 votes Thank Flag Link Sat Feb 25, 2012
As long as you are making payments on the tax lien VA will allow a loan with a tax lien. Child support payments will have to be included in the VA residual calc. It's not impossible to get a VA loan with a 580 score but you'll get a better interest rate if you can get above a 640 score. I recommend talking to an experienced loan officer who knows VA and having them go though your credit with you to see if there are any quick changes you can make to bump your score up. There are often many things that can be done to quickly raise a credit score.
Web Reference: http://www.socalvaloans.com
0 votes Thank Flag Link Sun Nov 27, 2011
Thanks Everyone!!

The child support arrears are strictly arrears and are being paid on time for over a 1yr now. There is no ongoing support.
0 votes Thank Flag Link Sun Nov 27, 2011
Mr. Butkus, you have heard correctly that the IRS will withdraw a tax liens of $25k or less after a DDIA (Direct Deposit Installment Agreement) is set up with a period of on time payments. I go over the details in a blog post back in May of this year: http://www.trulia.com/blog/shanethemortgageman/2011/05/getti… - once it's been removed then underwriting should permit you to not pay the remaining tax liability but the payment on the tax liability would still be included in your debt to income ratio.

Once the tax lien has been withdrawn it will be removed from your credit report and if you have no other public records you should see a significant increase to your credit scores. If there are other public records (judgment or bankruptcy) then your score will still be impaired, as having any public record is damaging and only getting rid of one public record when there are many will only result in a minimal score increase.

As far as your child support arrears are concerned, most lenders will require the past due arrears to be paid in full, and the title company may also as well (as they will do a search for past due child support) even if the lender doesn't require it. In the situation where the arrears have been on a payment plan for 12 months then lenders will start allowing them to remain past due, but will count the payment on the arrears in your debt to income ratio along with the normal child support payment. Also, if past due child support is reported on your credit that also often damages your credit, so becoming current on that may be another way to increase your scores.
0 votes Thank Flag Link Sun Nov 27, 2011
Also I've had others say the child support isn't an issue as I'm paying. I really appreciate the answers but depending what site and the person that answers it seems people have different answers as to if it will or won't. I'm confused :-(
0 votes Thank Flag Link Sun Nov 27, 2011
Why would they say that's something they do now?
0 votes Thank Flag Link Sun Nov 27, 2011
Hi Butkus35,

Your credit score isn't really the problem, it's the lien and chid support that under writing may have a problem with. 12 months paid on time is a plus but I agree with some of the others in this forum, the IRS doesn't remove anything unless paid in full. I have refer you to a VA lender I know that can look at your situation and advise. Just let me know through my profile and I can send you her information.

Good Luck!
0 votes Thank Flag Link Sun Nov 27, 2011
That's something the IRS just started doing this year but only if its 25k or less and its a debit installment. I still pay arrears but its paid on time and its reflects that.
0 votes Thank Flag Link Sun Nov 27, 2011
Butkus,
I have never seen a tax lien removed from a credit report in the 25 years I have been in mortgages. Do you have a payment schedule with the IRS? If so you will need a copy of that and proof that you are paying them per agreement.
When was your child support arrears? If within the last 2 years it is still counted against you in the credit score and underwriting.
0 votes Thank Flag Link Sun Nov 27, 2011
The mortgage companies always look the last 12 payments on time.
0 votes Thank Flag Link Sun Nov 27, 2011
@Anebella,

Just to be clear, even though I have CS arrears on my credit and they haven't been late for over a year, if I remove the lien I should be good to go?
0 votes Thank Flag Link Sun Nov 27, 2011
Bank will not lend you with tax liens or past due child support so the answer is yes if the tax lien is remove. In addition bank will take in consideration your credit score and your income versus your expenses. Check with a reputable mortgage company and ask for a good faith estimate.
0 votes Thank Flag Link Sun Nov 27, 2011
Hi Butkus-
Please email me at : theJORYgroup@gmail.com...I can forward you the information to get approved. There are VA loans available with mid ficos @ 580. We also have some other tools we use to make it happen for you.


Sincerely,

Jory Blake
951.742.3751
0 votes Thank Flag Link Sun Nov 27, 2011
Thanks Mike, my income is abt 84k yr and my total payments each month are approx. 800. Does that help? If the lien is removed wouldn't that increase my score?
0 votes Thank Flag Link Sun Nov 27, 2011
I don't think there is enough information here to give you a yes or no answer...the ability to get a mortgage depends not only on your credit score, but your income and debt equity ratios as well. Consult with a reputable lender to get a more specific answer..
0 votes Thank Flag Link Sun Nov 27, 2011
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