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My Wife and I have a tax bill from the last two years of 14k.
We were hoping to get into our home before setting up payments with the IRS..
we signed a contract to build and watched it be built and are days from closing.
LO says UW came back with wanting us to pay the 14k in full before we are clear to close.
Are there no other options?
Are we just going to have to walk away?
I am surprised no one mention the tax debt before as typically a payment plan with several payment made on time is required in order to issue the loan. 3-6 or more depending on loan type. Was the LO aware of the debt at the time of application?
Some have mentioned that the Government would have to sign off on being 2nd in line if there was a default but I don't know if that really ever happens.
honestly it was never brought up by either of us.. my wife and I were probably nieve to not know that it might cause a problem.. when the LO brought it up we were already a month or so away from closing and said that we would should try to get it from a family member or make a business loan with a family member to get it and then they gift it to us.. and it all sounded like he just wanted us to get more loans.
@Sbrooks1 wrote:
At this point you will have to pay it in full or dry up installment plan and pay 3 consecutive payments for FHA and 6-12 payments for conventional. These can not be prepaid all at once so unless you have an xtra 14 grand is gonna be huge problem. Can you liquidate 401 or anything like that. Shame on your LO as this should have been talked about in the very beginning.
I agree with the above^^^. If that is a condition before you close, you will have to fulfil it. I am also surprised they didn't say anything until now. Usually, setting up a payment plan with the IRS and showing a few months of payment should be enough.
That is alot of money to come up with this short amount of time. Let us know how it pans out.
@Sbrooks1 wrote:
At this point you will have to pay it in full or dry up installment plan and pay 3 consecutive payments for FHA and 6-12 payments for conventional. These can not be prepaid all at once so unless you have an xtra 14 grand is gonna be huge problem. Can you liquidate 401 or anything like that. Shame on your LO as this should have been talked about in the very beginning.
Sounds like the LO only found out about it a month ago, and did try to get them to take care of it then. If they didn't mention it and it wasn't on the CRs yet, how would the LO know about it until transcripts were pulled, etc.?
@Anonymous wrote:My Wife and I have a tax bill from the last two years of 14k.
We were hoping to get into our home before setting up payments with the IRS..
we signed a contract to build and watched it be built and are days from closing.
LO says UW came back with wanting us to pay the 14k in full before we are clear to close.
Are there no other options?
Are we just going to have to walk away?
Did you already put down a deposit with the contract to build? If so, how much? That could be a lot to walk away from. Is this a home in a new development? If so, I wonder if the builder can let you transfer your contract to a home that is not as far along in the building process. That way you would have time to get your installment plan set up. FHA only requires 3 months of payments, as others have mentioned. IDK if that is even an option, but I sure as heck would try. Especially if you have no other way of coming up with $14k in 3 days. Ouch.