Mortgage and IRS payment plan

[EaglesFan2006]

I was approved for FHA loan. I’ve been upfront with lender, including informing of a $150 monthly IRS payment plan from taxes due in 2017. IRS just deducted the first payment in June. This was set up with direct debit and I guess they don’t deduct until they send a letter saying you owe. So I haven’t made 3 payments yet as per FHA rules. Is this something I can explain to my lender and they will work with me on? I can also pay the debt in full and it would leave me enough for down payment and closing, but not a lot I reserve after that. What’s the best way to approach this? And I already rectified W4 so that owing taxes again won’t be an issue, even with uncertain tax guidelines coming up.

[ShanetheMortgageMan]

FHA only requires 3 months of payment if it's turned into a tax lien. 

If it hasn't turned into a lien yet, then all you need to do is get set up on a payment plan and provide the terms from the IRS to your loan officer.  The amount will be included in your DTI.  Only payments that need to be made is if one is due, if none are due yet then no payments need to be made.

[Anonymous]

Does anyone know if this is also the case for USDA? We are currently losing sleep because lender just asked for proof that 2017 & 2016 taxes have been paid to $0 balance. We recently set up an automatic payment plan with IRS online but first payment has not been made nor billed for. LO says adding this monthly payment does not negatively affect DTI ratio but I am still very concerned. Any help or input is appreciated.

[Anonymous]

BUMP

[Anonymous]

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@ShanetheMortgageMan wrote:

FHA only requires 3 months of payment if it's turned into a tax lien. 

If it hasn't turned into a lien yet, then all you need to do is get set up on a payment plan and provide the terms from the IRS to your loan officer.  The amount will be included in your DTI.  Only payments that need to be made is if one is due, if none are due yet then no payments need to be made.

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Old post, I know, but is this still the case?  I just got a call from my lender who said my pre-approval is basically tanked because the Direct Debit payment plan I set up is too new and the payment hasn't come out yet and that I'll need 3 months of payments for my FHA application.  I have no liens reporting. 

[EaglesFan2006]

For me I did ultimately have to show 3 payments on the plan and I had no liens either.. however I explained it to them and they knew the 3rd payment was coming out about 2 weeks from closing , and I closed on the scheduled date. So I don’t think it should tank your pre-approval...but likely you will need it before you close. How close are you to closing? You should be able to call your lender and discuss before anything is tanked.


For timing sense... I set up my IRS plan when I filed in April, first payment was debited in June. 3rd payment came out August 28. I closed September 14, which was set as my closing date when i went under contract. Also keep in mind with the 3 payments that you can’t pay ahead, meaning you have to wait for that due date

[VALoanMaster]

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@Anonymous wrote:

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@ShanetheMortgageMan wrote:

FHA only requires 3 months of payment if it's turned into a tax lien. 

If it hasn't turned into a lien yet, then all you need to do is get set up on a payment plan and provide the terms from the IRS to your loan officer.  The amount will be included in your DTI.  Only payments that need to be made is if one is due, if none are due yet then no payments need to be made.

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Old post, I know, but is this still the case?  I just got a call from my lender who said my pre-approval is basically tanked because the Direct Debit payment plan I set up is too new and the payment hasn't come out yet and that I'll need 3 months of payments for my FHA application.  I have no liens reporting. 

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Yes it is still the case.

You need a new lender.

[Anonymous]

So providing my payment plan letter showing first Direct Debit payment won’t come out until 9/20, plus adding it into my DTI should be enough to get approved for a FHA or Conv loan?

[VALoanMaster]

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@Anonymous wrote:
So providing my payment plan letter showing first Direct Debit payment won’t come out until 9/20, plus adding it into my DTI should be enough to get approved for a FHA or Conv loan?

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Yes