Unpaid Taxes

[mortgagee]

Hello,

I am in the process of purchasing a new construction home that will close mid to late september.  I applied for a mortgage, and was preapproved by 2 lenders.  I have unpaid taxes for 2013, 2014 and 2015.  I completed 4506t for both lenders, however one lender has all boxes checked (return transcript, account transcript, record account transcript, verification of nonfiling and Form Transcript) and the other lender only has the return transcript selected.    They both are for years 2018, 2017 and 2016.  Will the unpaid taxes for the prior years be a factor?  Not sure what to do...

[Anonymous]

It will be a factor.  Are you planning to go with a conventional mortgage?  Are there any tax liens filed?  I would suggest getting a payment plan set up with the IRS asap.  For an FHA loan, you will need to have made three consecutive payments prior to closing and the monthly payment will be included in your DTI calculation.  For conventional, I believe you only  have to have made one payment prior to closing.  If any have resulted in a tax lien, you will not be able to go with a conventional mortgage unless you can get them withdrawn.

[JVille]

Agree a huge factor. In fact a declining factor if it was undisclosed and you are not in a payment plan with a Nobel winning letter of explanation. Unpaid taxes for multiple years? Federal taxes take lien priority over the lender.....
Failure to disclose and address multiple years of back past due taxes are a bit more than an issue.

[mortgagee]

No tax lien has been filed. I just got the notice last week, after adjustments were made to these years. The tax transcripts have already been received by the lender and I have received a conditional approval, just needing the appraisal completed. I want to reach out to the IRS to get on a payment plan, however I wonder if that will exclude me from closing since I only have two months from now until closing using a VA loan. And I will not have an opportunity to make multiple on-time payments before the closing date

[mortgagee]

I think you are I did not know there was going to be amounts due until last week we did file the taxes and had paid the taxes but adjustments were made due to errors and now we need to make these payments. I have been trying to contact the IRS but they keep saying to call back later or tomorrow.

[JVille]

Is the amount due too large to just pay? Or get a family member to advance funds to payoff? Possibly 401k loan? Anything to clear the obligation?

[mortgagee]

Yes the amount is too large I can pay off one of the years..
I am going to a payment arrangement however I’m wondering how that is going to affect me now that we are closing in two months..once when we go into the installment agreement Irs says they will issue a lien. At this point we don’t have a lien I’m wondering if I should just wait until we close and then going to the installment agreement since the tax transcripts have already been reviewed and approved ? Or do you think they will review the tax transcripts again before closing ?

[JVille]

Yes they will absolutely review Tax Transcripts.... and the repayment plan will be calculated into your DTI ratios. You need to discuss this with your Lender ASAP

[mortgagee]

I need to get a payment plan in place first... the payment will put me over DTI . I am married but my husband is not on the loan, but he is responsible for tax debt jointly. Do you think they will split the amount for dti purposes?

[mortgagee]

Thank you for your responses.