Is a Mortgage Possible?

[Kay_Cee]

My income should come in at around $60K this year which includes salary, overtime, bonus and a pension of $380 per month.  I currently pay $1135.00 a month in rent, plus all utilities.  I have a car payment of $375 a month.  I use my credit cards regularly but generally pay the statement balance monthly with the exception of about $300 in dental expenses and that will be paid off shortly.  I have about $6000 in savings and a credit score of 703.  I'd like to buy a townhouse and would need to finance something around $115K.

Here are the negatives, a paid judgement from 2007, a paid state tax lien released in 2007, two federal tax liens, not paid,  from 1992 and 2000, for back taxes.  The IRS has me in a currently not collectable status as my income took a serious dip two years ago.  The last time ( two weeks ago) I pulled my Transunion Credit Report the only public record showing is for the satisfied judgement and no record of any problems with the taxes.  I have had no late payments on any of my accounts.

Do you think it is possible for me to qualify for an FHA mortgate?

[Anonymous]

Taxes will have to be paid or in a payment arrangement for 12+ months with on time payments.  Unfortunatley I believe (I could be wrong) you can only be in a payment arrangement for 1 year at a time.  Either way, you will not be able to buy right now.  Basicly any loan program is going to require that all taxes be current and paid or in a payment agreement with established payment history as mentioned above.

[ShanetheMortgageMan]

Usually you do need to be in a payment plan for a period of time (the amount will vary, but most underwriters like to see 12 months), but if your score is good/exhibit good payment habits, and your debt to income ratios are within the preferred range (that is including the payment on the IRS debt) then it's possible that an underwriter will just require a payment plan be established, and not require a history of on time payments.  If you can start making voluntary payments to the IRS now, that would further help your case.

I don't see a problem with your debt to income ratio, even if you throw in $200/mo in IRS debt.  The IRS does a calculation to determine how much you need to pay on an installment plan, I'm sure it has to do with your income as well as the amount owed, but if you have been deemed by the IRS as non-collectible then it sounds like even if you offer to pay them $50/mo they may agree.  As far as the duration of the repayment plans with the IRS, it can go on for up to 5 years from what I've heard.  I had a client who was on hers for 3 years, and she is still on it today.

[Kay_Cee]

Thanks for the feedback!  I guess I'll be waking the sleeping giant soon to see what I can work out....