approx 1 year from now i plan to look into buying a home (my credit is too bad at the moment but im working on that). at this time, i have an open fed tax lien, and will have all but one year's liability paid mid summer (i wouldnt be able to pay the year i referenced, as it hits CSED next month, and i will be unable to PIF prior to that). problem with that is i will not qualify for a full lien withdrawal since that year was not PIF (even though it would no longer be collectable).
history aside, my question is in reference to the real damage a released fed tax lien does in a manual review. is it borderline deal-killer, or at that point is it looked at just like any other paid judgement, CA, CO, etc? if it makes a difference, i could also provide some type of documentation that i have 0 tax liability at that time (considering you can get a release by paying the tax years on the lien itself, but still owe for tax years after the filing of the lien, thought it may or may not make a difference).
thank you in advance!
There have been lenders that are okay with payment arrangements. The obviouis is to pay in full with no more liability. If you are paid in full or in payment arrangements, you have a chance for approval. Now thats as of today, a year from now requirements can change.
I paid my state tax lien in full, and was never late on any of the payments, and it was a deal breaker in UW thru USDA. I was told if I got my scores up to 640, and we could get approved thru GUS (automated underwriting) the UW wouldn't sweat us for it. I would advise to get your scores up to 640 or 660 even just to be sure.
I closed on my mortgage in September of last year. My credit report showed a tax lein which had been released with a payment arrangement in place. I needed to prove I had made 12 payments on time and write a letter of explanation. I went through a smallish mortgage company for an FHA loan and when I closed I signed the papers for it to be sold to Wells Fargo. Talk to your mortgage person and be completely honest and forthcoming about the situation. If they're not willing to work with you, find someone who will.
Good Luck! It can be done and is well worth the stress and effort!