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Mortgage approval frustration

I have had a rough financial past from 2003 thru 2006 and had bad credit (around 525 score) but I have now increased my credit score to between 680 and 700 depending on the credit agency.  I also have Federal tax liens (filed in 2008) on my credit report for the tax years 2003 thru 2005.  In 2009 I entered into a payment plan with the IRS.  I have made all payments due and, for the most part,  have been on time with payments but twice in the last 16 months I have been late on my payment.  I applied for a mortgage in April (my credit score at the time was about 650) and was told I needed to go the FHA route due to score and minimal down payment.  I have good income and was preapproved for a mortgage in April.  Since signing the contract on the home purchase and putting down earnest money, the mortgage company has said that since I have had late payments to the IRS on the payment plan, I am ineligible for an FHA loan. What are my options?  Are there any other alternatives I have, short of paying off the IRS and getting the release on the liens?  I have worked hard to increase my credit score to be able to purchase a home again.  I thought I was good to go since I had a preapproval, but I guess that really doesn't mean much.  Any advice would be appreciated.
Thanks
  • July 26 2013 - Omaha
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Answers (2)

We only require 3 months payment history on any IRS or State Tax Liens. If you put yourself on an Installment Agreement and request a IRS Form 433-D (Auto-Debit Plan) then you will be good to go. In the mean time, to start the ball rolling, go to the IRS website "EFTPS" and make your payment on the same day of the month. You will need to request a PIN in order to make payments over the phone or online.

Now getting back to my comments, you can go FHA and we do not require 12 months perfect payment history. Remember, we only request 2-3 months worth of bank statements and the Underwriter will be looking at those bank statements and as long as they see the IRS auto debit going out at the same time every month, they won't ask for more documentation. Don't listen to people on this site who clearly should not be responding to questions.

Find yourself a Pro to work with not a Rookie or a naysayer and take my advise to don't miss a payment and keep your nose clean from this day forth.

Best of Luck!
  • August 06 2013
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If you have liens of any kind a lender will not loan you anuthing...sorry to tell you...you could do a hard money lender, but interst will be much higher
  • August 06 2013
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