Tax Liens and Qualifying for a Home Loan

There's an old saying that there are two things in life that are certain - death and taxes. The statement is pretty true. You have to pay your taxes and you have to pay them on time. If you owe taxes and you don't have the money to pay them you should work out a payment plan with the state or federal tax authority you owe money to. If you do not make payments on the taxes you owe the tax authorities can file a lien with your county recorder. A lien is the right to take and hold or sell the property of a debtor as security or payment for a debt or duty. The debtor in this case would be you, the taxpayer, and the debt or duty would be the taxes you owe. You cannot get a home loan if you have a tax lien on your credit report. The taxes must be paid and the lien must be released by the tax authority.

You can not qualify for a home loan if you have unpaid tax liens on your credit report. The reason is that the government will always get paid before the lender. Unpaid tax liens represent too much risk for the lender. Therefore they will always turn down a home loan for any borrower who has unpaid tax liens on his/her credit report. The liens must be paid and released before the loan can be approved.

If you have tax liens to pay off these will be included as part of your personalized American Home Buyer Service program. If you have very large tax liens to handle we may refer you to someone who can help you do an offer in compromise with the IRS to reduce the total amount of tax you owe.

You may have been told that you cannot get a loan if you have a tax lien on your credit report, even if it has been paid off. That simply is not true. If handled correctly and in combination with all of the other areas covered in this booklet you can purchase a home after the tax lien is paid and released.

Tax liens preventing you from qualifying for a home loan? Fill out our consultation form for a Free Consultation.