Mortgage approval & back taxes

[wils70]

Hi there,

I have several years past returns that I need to/have just filed - specifically:

2012: W2, just filed, did not owe due to change in job and also change in withholding

2011: W2, just filed, owe ~$7k

2010: W2 have not filed but will immimently expect to owe (~5k)

I am going to pay off 2011 in one lump sum this week, but was going to plan to pay 2010 pay an installment agreement.

When seeking pre-approval, and subsequently approval, on a mortgage:

• Do all backtaxes needed to be cleared or will the lender worry only about the most recent 2 years?
• If all, as long as a payment plan is in place, would 2010 be an issue?
• Would filing returns recently be an issue, or is the requirement 'just' that they have to be paid?
• From an approval perspective, is completely paid off a year's back taxes better than an installment agreement, or does it not make a difference?

Thanks.

[cocomadd]

I set up a payment plan for my 2012 taxes because I had a high bill that I could not pay off the bat.  My loan officer said as long as I was current and honoring my installment plan I would be fine.  He also said that if the payments were set up for more than 6 months they would have to factor it into DTI, which in some cases would disqualify you.  Fortunately, my last payment is next month and my loan application will be on or around Sept 1st.

If you can wait, I would suggest you iron out those tax issues and then apply.   You do not want UW to assume that you will have tax issues in the future and that you are a risk because of the whole "Lien" on your home for tax issues thing....

[1LNurse]

Payment plan with automatic debit, once you receive the confirmation in mail from IRS, submit this to your lender. I am in agreement with the IRS and had no trouble from the lender regarding this.

[fdiggy]

Have these taxes been delinquent as in getting letters you didnt respond to.

Thats when its a problem. It then becomes a collection on CAIVRS.

Everyones process is different with scores income and how much house so its hard for anyone to give 100% correct answers.

I was told because i owed for 2011 and 2012 i was unaprovable pretty much. Never even came up, closed 2 months ago. Set up payment plans after closing.

Many say if you have a collection in last year you cant get approved. I had a leach put a $22 collection on me that was 7 yrs old but they reported it to look like it happened 3 months ago. Wasnt a problem. I just got that removed last month.

I think what helped me was $60K income and the house was only $69,000

If the house was $120,000 all of that may have been a problem. So its different for everyone.

Many have been denied over any recent collection.

[ecalmese]

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@fdiggy wrote:

Have these taxes been delinquent as in getting letters you didnt respond to.

Thats when its a problem. It then becomes a collection on CAIVRS.

Everyones process is different with scores income and how much house so its hard for anyone to give 100% correct answers.

I was told because i owed for 2011 and 2012 i was unaprovable pretty much. Never even came up, closed 2 months ago. Set up payment plans after closing.

Many say if you have a collection in last year you cant get approved. I had a leach put a $22 collection on me that was 7 yrs old but they reported it to look like it happened 3 months ago. Wasnt a problem. I just got that removed last month.

I think what helped me was $60K income and the house was only $69,000

If the house was $120,000 all of that may have been a problem. So its different for everyone.

Many have been denied over any recent collection.

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i've been trying for a very long time to get a house. i seem to hit a lot of road blocks. i just wanted to say every post you write is a positive post that gives me inspiration that i will eventually get a home and hopefully sooner than i know.

thanks for your great posts. i owe the IRS myself. i am on a payment plan. my payments have not been consistent because i've been working on so many other things. but your post makes me feel there is still light at the end of the tunnel if i do not get the taxes paid off first.

[DallasLoanGuy]

payment plan will be ok.

will look better if you actually make some payments before applying