The quick answer is, Yes!
You know there is a “but” after this.
Basically, you can apply for a mortgage loan with secured or unsecured debts. But if you owe the IRS, it’ll be a different situation for the mortgage underwriter.
Even with the extra scrutiny, it can be done. Here’s how.
Arrange payment plans with the IRS
Before starting your mortgage application, it’s important that you are in the process of paying your tax debts with the IRS. Either by payment arrangements or full payment.
It’s ideal to send a check for the payment so you have a physical record that the balance has been paid or in the process of paying it off.
Depending on the kind of mortgage loan you are choosing, some loan programs require that you have made three consecutive payments that are reflected on your bank account.
FHA loans (government-backed loans), will require this payment plan to be reflected on your statement.
While conventional loans are more lenient and do not require the three months payment but it’ll ask for proof that you have made payment arrangements with the revenue service. ]
Your rate will be higher and may be requested to increase downpayment.
Tackle it head-on
For a number of reasons that you really need to buy a house and you still have some tax debts to pay off. Focus your funds in paying off your tax debt applying for a mortgage loan.
Your credit score will increase and you’ll be get better rates in the end.
