Looking at buying a home, but you have back taxes that you still owe to the IRS? Perhaps you haven’t even started looking for a home because you think you’ll never be approved due to tax debt?
Whatever the case may be, our tax experts here at Ideal Tax Solution, ITS, want to let you know that you’re not alone and that there are things you can do today to get into the home of your dreams! Today, we wanted to give you some tips and steps to be on to the path of buying a home.
Resolving your tax debt
Sometimes this is easier said than done, as the money owed on your back taxes might be out of reach to just cut a check and be done. This wouldn’t stop you from being able to buy your home now, it just makes things a little harder. The FHA has guidelines for instances like this when people are trying to buy their home and have tax debt. The best thing to do is to set up a repayment plan with the IRS to resolve the matter directly with them. Showing consistent payments for over three months on your IRS repayment plan and maintaining those timely payments is the only way to secure your ability to be approved for a mortgage.
So, calling the IRS and setting up your repayment plan is a big way you can be sure that you can buy your new home. Ideal Tax Solution can help with this and also with negotiating manageable repayment terms with the IRS on your behalf. That’s just what we do, and do it well!
Reducing your debt to income ratio
When you owe a large amount of back taxes, you’re no doubt looking for some tax relief. And ways to help find that, are to start resolving your debt with the IRS by making payments. But there is something else you can start doing to improve your chances to get approved for a mortgage loan.
Taking the time to lower your debt to income ratio. Which is simply the total amount of your monthly debt-related expenses divided by your gross monthly income. When you’re in little debt, the better your debt to income ratio. Thing is, when you owe a large amount of tax debt to the IRS, your DTI remains to b0e high. Finding ways to combine accounts onto one single card with better terms, or proper budgeting are ways to lower that. Again, to help with this, ITS tax experts can work with you to renegotiate better repayment terms on your IRS debt and provide some relief. Especially in times of COVID19, who doesn’t need relief?
On your way to Buying a Home
Our tax specialists at ITS can help. Whether you’re looking to buying a home now or start getting ahead of your back taxes and IRS tax debt. Call us today to find out how we can help get into your new home sooner than you think!
We provide professional guidance to people whose lives have been affected by tax problems. To evaluate your specific tax issue and determine if you qualify for tax relief, please contact us for a free consultation. For everyone’s safety, we are COVID-19 prepared, our Senior Tax Analysts will work with you over the phone, via e-mail, and regular mail.
The content of this post does not replace the advice of a licensed tax professional. Consult a qualified tax professional for questions specific to your individual circumstances.