Don’t Get Liened On if you Are Saving For a Mortgage

March 11, 2014

Pay taxes to get good mortgageIf you are saving for a mortgage for Chicago real estate, it’s important that you pay your taxes. While taxes are generally something you consider more heavily after you become a homeowner and have to deal with property tax, not paying taxes can be disastrous for your credit score and chance at a mortgage. Equifax explains in the new article, ”

Tax Questions: Can Unpaid Taxes Affect My Credit Score?” that will make paying your debts to Uncle Sam on April 15 a must do if you want to own a home.

The problem is that if you haven’t paid your taxes, the Internal Revenue Service places a tax lien on your credit report. This acts as a red flag for lenders and can penalize your credit score. Worse, the liens are automatic and even if the service says it won’t place one, there’s a chance that their system may do so for them.

This means you may want to consider non-traditional option to avoid the shadow of a chance of a lien, such as making a partial payment, taking a loan out to pay off the IRS, or other option. Whatever you do, don’t draw the money from your retirement plans, especially if you are under age 59½. That’s the most expensive money you can use. It will cost you at least 30 percent in IRS and state taxes, plus at least 10 percent in early withdrawal penalties.

There are more options available for you after you suffer the lien, and the full article talks more about ways to deal with it if you do. Check it out as well as lots more personal finance advice on the Equifax Finance Blog.

About The Author

Read All Stories By Mitch Levinson

Mitch Levinson is the author of “Internet Marketing: The Key to Increased New Home Sales” published by BuilderBooks. He is an Internet marketing expert with expertise in search engine optimization, website development, email marketing, social media and CRM consulting services. He is known for creating effective programs that can be tracked through analytics to prove effectiveness and ROI. Mitch is founder and president of MLC New Home Marketing and MLC FlatFee Realty, as well as managing partner of mRELEVANCE, LLC, a Marketing, Communication, Interactive agency with offices in Chicago and Atlanta. He currently leads the Chicago team. A Multi-Million Dollar Sales Producer who earned an MBA in Computer Information Systems and eCommerce, he brings a unique perspective and experience to the field of real estate communications. Mitch combines the two interests in order to help home builders and developers gain a competitive advantage through the Internet and technology. When he isn’t behind a computer, he enjoys participating in sports and coaching his kids’ teams. Mitch resides in Arlington Heights, Ill., a northwest suburb of Chicago, with his family, which includes two rambunctious labs. Visit my Google+ profile.

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