The quick answer is yes, it is possible to get a mortgage even if you have unpaid taxes. However, the process may be more difficult than it would be otherwise. Here's what you need to know about getting a mortgage with back taxes.
Characteristics of tax liens that make them more difficult to finance:
How to get a mortgage if you owe back taxes:
There are a few things you can do to make getting a mortgage with back taxes easier.
Assuming you owe back taxes and are looking to purchase a property, there are a few things you need to do in order to increase your chances of being approved for a mortgage. While it may be more difficult than usual, it is still possible to get a mortgage with back taxes owed. Work with a specialized lender and/or try to negotiate a payment plan with the IRS in order to improve your chances of being approved for financing.
If you find yourself owing money to the IRS, you're not alone. In fact, according to a report from the Treasury Inspector General for Tax Administration, nearly 10 million taxpayers owed the IRS a total of $131 billion in 2017. But just because you're in debt to the IRS doesn't mean you're out of options. Here are four tips for dealing with IRS debt.
1. Talk to the IRS. The first thing you should do if you find yourself in debt to the IRS is to contact them. The agency may be willing to work with you to set up a payment plan that fits your budget. If you're not able to pay your debt in full, the IRS may also be willing to accept a partial payment.
2. Consider an offer in compromise. If you're not able to pay your debt in full and you don't qualify for a payment plan, you may be eligible for an offer in compromise. This is an agreement between you and the IRS that allows you to settle your tax debt for less than the full amount you owe. To qualify, you'll need to prove that paying your full tax bill would create a financial hardship or that doing so would be unfair or inequitable.
3. Request an Equifax Credit Report extension on filing your return.. If you can't pay your taxes when they're due, you can request an extension from the IRS. This will give you extra time to file your return and pay what you owe without incurring any penalties or interest charges. Just remember that an extension on filing your return is not an extension on paying your taxes—you'll still need to pay any taxes owed by the original April 15 deadline or incur penalties and interest charges.
4. Check into tax relief programs.. If you're facing financial hardship, there are certain tax relief programs that may be able to help lessen your burden. For example, the Low Income Taxpayer Clinic program provides free legal assistance to low-income taxpayers who need help dealing with the IRS. You can find more information about this program and others on the IRS website.
Dealing with IRS debt can be daunting, but it's important to remember that you have options. By taking advantage of one or more of the tips above, you can get your finances back on track and put yourself on the path to a bright future.