Willing owing back taxes that I have setup a payment plan affect me getting approved by a lender

Asked by Mstrong, Lake Angelus, MI Fri Mar 16, 2012

My boyfriend and I want buy a house but after filing our taxes we found out he will owe. We have planned to make payment arrangements and have the money to pay most of it. Will owing back taxes affect us getting approved by a lender?

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Greg Myers, Agent, Gaitherburg, MD
Fri Mar 16, 2012
BEST ANSWER
Yes, it will. When you make loan application your income will be verified through a IRS 4506 form which allows the lender to verify your income as reported to the IRS. This process is a new and resulted of the calamity of the 2001-2006 100% financing loans that were called "liar" loans. Almost no loans are being approved today with out income verification through the IRS 4506 form.

If the IRS has reported a lien which shows up on your credit report you will be required to pay off the lien as a condition of funding of your purchase.
0 votes
Jessica Hood…, Agent, Gambrills, MD
Thu Jul 18, 2013
Yes, but it might not be a deal breaker. You'll need an experienced LOCAL lender to review your particular situation and give you guidance.
0 votes
Robert McArt…, Agent, Fallston, MD
Fri Mar 16, 2012
We will work closely with your Lender to let them know of your situation but it depends on the loan amount you are looking for. I would speak with one of our approved Lenders first.
0 votes
Marney Kirk, Agent, Towson, MD
Fri Mar 16, 2012
It is possible it could affect a loan approval, but your best bet is to go through the pre-approval process and tell the lender the details, so he or she can find out from their underwriter based on your specific situation.
I have a few lenders I work with regularly who may be able to advise you.
Please let me know if I can help you further!
Sincerely,
Marney Kirk
Keller Williams Excellence Realty
0 votes
brent mendel…, Mortgage Broker Or Lender, Bethesda, MD
Fri Mar 16, 2012
Mstrong,

It could be a problem. The monthly debt will be counted against your debt to income ratio. It could depend on other factors as well. Smart of you to let a lender know up front because we would all know it at some point. It's good you do have the money just in case. Hope this helps.
Thanks,
Brent
0 votes
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