Information on effect of unpaid taxes on FHA loan application - The Bills.com Blog

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Information on effect of unpaid taxes on FHA loan application

Question: I want an FHA loan... I have filed my taxes but have an unpaid status and I am trying to purchase a house through FHA. Will this prevent my purchase?

Answer: I think what you are trying to ask is whether or not your credit rating has a part to play in your FHA loan application, and the short answer to that would be a 'yes'. Here is why.

Toqualify for an FHA mortgage loan you must apply through a lender approved with the Federal Housing Administration.

You can apply here:
Free Mortgage Quote

The FHA will evaluate your credit; the agency requires at least one year of on-time payments on your credit reports. They may require your rental and mortgage repayment history before approving your application. The FHA will also consider your debt-to-income ratio in making their determination.

The

advantage of going though this scrutiny by the FHA is that you will have an opportunity to explain any blemishes on your credit records. If you have valid reasons for your financial difficulties, the FHA will consider your explanations before making a decision. In case the FHA feels that you are a credit risk, then you will be required to make a down payment on the mortgage; however, this down payment amount can be as low as three percent of the loan amount.

If you have a payment plan in place for the taxes owed, then

you can explain the circumstances during the application process. If this is something that has happened more than a year ago, then I don't think it will lead to your loan being rejected. But, on the other hand if it is a fairly recent occurrence, then I think you would face some problems. You will need to work with your real estate broker and inform them of the situation before hand.

I hope the information provided helps you Find. Learn. Save.

Best,
Bill
www.bills.com

Also, make sure to get a free financial health check-up with Bills IQ!

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Bill has answered all sorts of questions and has been able to provide those in need of financial guidance with helpful and valuable advice and information on their specific financial area of interest. If you need specific guidance on any of the above mentioned financial areas, feel free to Ask Bill your financial questions and get better informed. Also, make sure to get a free financial health check-up with Bills IQ!

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