Can I refinance with a tax lien?

[tina t]

Is there anyone who would know about this? What do I need to do about acquiring this refinancing? Any help would be appreciated.

[Charlie & Angie G]

An IRS lien is no different than any other lien. You can refinance as long as there is enough equity in the property and your credit is good enough.

Think of it this way; If you had a 1st mortgage and a home equity loan and you refinanced the 1st, the home equity loan would have to be paid off at closing.

[mefuture]

What is your credit score? If you have enough equity and have a good repayment record on all your debts, you should be able to get a refinance. If the mortgage co. brings up the lien issue then you can always explain what exactly happened. The secret is to get quotes from multiple lenders and speak to each one about your problem. That will also give you insights on what your options are (realistically).

[Chase R]

Very few lenders will allow you to refinance unless there is enough equity to pay off the tax lien in the process. You may be able to get the IRS to subordinate (take a 2nd lien position behind the new mortgage) but this is unlikely unless you are STRICTLY refinancing for a lower rate. If you intend to get any cash out or do any debt consolidation, the IRS will not typically subordinate because it weakens their interest in the property. Most lenders won't accept this even if the IRS is willing to subordinate. They typicall want any judgements or liens that are not mortgages paid off before they will extend additional credit to you. If you can roll the IRS debt into the mortgage, do it by all means unless you are disbuting what you owe. Eventually the IRS will take the house if the debt is not paid.