IRS "Fresh Start" Program --> Mortgage

[Anonymous]

Hi all-

I have been working on rebuilding my credit and have it in the 675-700 range. I hope to be able to buy this year.

But I am on the hook with the IRS for about $50k in taxes from 2009 - 2013. I enrolled in their "Fresh Start" program where they debit me for approx $600 a month for the next five or so years.

Will being in this program harm my chances of a mortgage?

When you apply for a loan, I assume you have to submit all of your tax information, correct?

Thanks!

[Anonymous]

Yes, any installment agreement you have with the IRS will be counted as a monthly debt and calculated in your DTI ratios.

[Anonymous]

Do you know if most banks make you submit a record of payments? Unfortunately this past month (after no problems for the past year) they said said I defaulted on the agreement (which is now re-established) because of a chargeoff W9 from an account years ago that a CA submitted for 2013 which I didn't know about.

So, I'm afraid if they see the account went into default this will end my application. Or, as long as it's current good enough for the banks?

Thoughts?

[Anonymous]

 Usually three months of perfect payment history based on the payment amount established in the agreement will be sufficient. At the lender's discretion, they may require a longer history if there was any kind of default, but it will truly be up to your individual lender.

[Anonymous]

Thanks so much for helping me through this.

My final question (since I'll be brand new to the whole process)... when I do a "pre-qual" will they ask for everything then (proof of employment, taxes, employment, debts, etc etc) and verify all of this info at that time? I'd rather have it all out there and then go thru the verification process upfront. When I'm going through the home shopping process I'd like to know that there will be no surprises.

[Anonymous]

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@Anonymous wrote:

Thanks so much for helping me through this.

My final question (since I'll be brand new to the whole process)... when I do a "pre-qual" will they ask for everything then (proof of employment, taxes, employment, debts, etc etc) and verify all of this info at that time? I'd rather have it all out there and then go thru the verification process upfront. When I'm going through the home shopping process I'd like to know that there will be no surprises.

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They definitely should. Stay away from the big banks and try to find a direct lender that only does mortgages.