Home loan

Can you get a home loan if you owe taxes?

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Owing money to the Australian Taxation Office (ATO) is rarely an ideal situation, but that doesn’t mean you can’t qualify for a home loan. When reviewing your home loan application, lenders will consider your tax debt as well as your other debts and debts, as well as your debt repayment history and other financial situation.

How does a tax debt affect your mortgage application?

Before a bank or mortgage lender lends you money to buy a property, they will want to be sure that you can pay the mortgage payments while servicing any other debts or liabilities, such as car loans, personal loans or credit cards.

If you have a significant tax debt to the ATO, for example if you owe money on your tax returns due to past tax errors or non-filings, this could also become a factor that affects your claim. mortgage. You will likely need to provide details of any outstanding tax debts, as well as any payment plans you have entered into, when applying for a mortgage.

An overdue tax debt could also be recorded on your credit file, which would affect your credit score. If the ATO takes legal action against you, you may have a court judgment or similar decision recorded on your credit file. This could affect your future credit applications, including home loans, as borrowers with poor credit may need to meet additional conditions to have their credit applications approved.

Keep in mind that not all tax debts will automatically be considered a mark against you by your mortgage lender. For example, if your debt is the result of an accounting error or it is a one-time debt due to the payment of capital gains on a recently sold property, your lender may not consider you a high risk borrower. Different lenders will have different policies for home loans for borrowers with tax debts.

How to get a home loan with a tax debt?

If you expect your mortgage application to be affected by your tax debt or other debts you owe, it may be worth contacting a mortgage broker. These home loan experts can advise you on which home loan options are best for your unique financial situation. They can also negotiate with lenders on your behalf, provide access to exclusive home loan offers that are not normally advertised, and manage the application process to ensure everything goes smoothly.

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