Can I Get a Mortgage with Unfiled Taxes

If you are looking to purchase a home, you may wonder if obtaining a mortgage is possible if you haven’t filed your taxes. The short answer is yes, you can still get a mortgage with unfiled taxes. However, it can be more complicated, and there are some potential hurdles you will need to navigate. In this article, we’ll explore the ins and outs of obtaining a mortgage with unfiled taxes, including the steps you must take and the potential challenges you may face.

What are unfiled taxes?

Unfiled taxes are tax returns you have failed to submit to the IRS or state taxing authority. If you have not filed your taxes, you may face penalties and interest charges and may even be subject to legal action. Not filing your taxes can have serious consequences, and it’s always best to file your taxes as soon as possible to avoid any additional problems.

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How do unfiled taxes affect your ability to get a mortgage?

When you apply for a mortgage, your lender typically asks for your tax returns from the past two to three years. If you have unfiled taxes, providing the necessary documentation to your lender can make it more difficult. In addition, having unfiled taxes can negatively impact your credit score, making it more difficult to qualify for a mortgage. If you owe back taxes, the IRS or state taxing authority can place a lien on your property, making it more difficult to obtain a mortgage.

Steps to take if you have unfiled taxes and want to get a mortgage

If you have unfiled taxes and are looking to get a mortgage, there are some steps you can take to make the process smoother:

Step 1: File your taxes

The first and most important step is to file your taxes. This will help you get up-to-date on your tax obligations and ensure you have the documentation to provide to your lender. If you owe back taxes, working out a payment plan with the IRS or state taxing authority is best.

Step 2: Provide documentation

When you apply for a mortgage, your lender will typically ask for documentation related to your taxes, including W-2s, 1099s, and tax returns. Make sure you have all of this documentation available and organized.

Step 3: Be prepared for additional scrutiny

If you have unfiled taxes, your lender may scrutinize your financial history more closely. Be prepared to provide additional documentation and answer more questions than you would if you had filed your taxes on time.

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Step 4: Work with a knowledgeable mortgage lender

Finding a mortgage lender familiar with working with individuals who have unfiled taxes can be helpful. These lenders may have more experience navigating the process and can help guide you.

Tips for getting a mortgage with unfiled taxes

If you have unfiled taxes and are looking to get a mortgage, there are some tips you can follow to make the process smoother:

Tip 1: File your taxes as soon as possible

Filing your taxes as soon as possible can help you avoid additional penalties or interest charges. It can ensure you have the necessary documentation to provide your lender.

Tip 2: Be honest with your lender

Being upfront and honest with your lender about your tax situation is important. Trying to hide unfiled taxes can result in serious consequences, including denial of your mortgage application.

Tip 3: Work with a tax professional

Working with a tax professional can help ensure that you have filed all your necessary tax returns and are up-to-date on your tax obligations. This can also help you establish a payment plan if you owe back taxes.

Tip 4: Improve your credit score

If you have unfiled taxes, your credit score may be negatively impacted. Improving your credit score can make it easier to qualify for a mortgage and help you get better interest rates.

Tip 5: Save for a larger down payment

If you have unfiled taxes and are struggling to qualify for a mortgage, saving for a larger down payment can help. A larger down payment can make you a more attractive borrower to lenders and can help offset any concerns they may have about your tax situation.

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The bottom line: Can you get a mortgage with unfiled taxes?

In short, yes, getting a mortgage with unfiled taxes is possible. However, it can be more complicated, and there are some potential hurdles you will need to navigate. The best action is to file your taxes as soon as possible and work with a knowledgeable mortgage lender who can guide you through the process. By taking these steps, you can increase your chances of getting approved for a mortgage and achieving your dream of homeownership.

FAQs

What is an unfiled tax return?

An unfiled tax return is a tax return that has not been submitted to the IRS or state taxing authority.

Can I get a mortgage if I owe back taxes?

Getting a mortgage if you owe back taxes is possible, but it can complicate the process. Working out a payment plan with the IRS or state taxing authority is best.

Will having unfiled taxes impact my credit score?

Yes, having unfiled taxes can negatively impact your credit score.

How can I improve my chances of getting approved for a mortgage with unfiled taxes?

Filing your taxes as soon as possible, providing all necessary documentation, and working with a knowledgeable mortgage lender can improve your chances of getting approved for a mortgage with unfiled taxes.

Can I get a mortgage with unfiled taxes if I have a large down payment?

A larger down payment can make you a more attractive borrower to lenders and can help offset any concerns they may have about your tax situation.

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