Arlington, VA · Member since 2017 · 22 posts · 3 votes
Hello all,
I stand to inherit a home that has about 15,000 dollars worth of tax liens on it. The property is worth about 360K and is otherwise free and clear. I won't be able to take over the property unless I take it on with the tax liens. My question is will I hurt my credit score if I take on the property and then aggressively pay down the liens? Is it something you would do?
Lender · Ogallala, NE · Member since 2016 · 8 posts · 2 votes
9y
It should not hurt your credit score. However, if the property has multiple years of tax liens, you will want to maker sure they are paid before they can foreclose on the property. Additionally, the longer you wait on paying them off, the more interest accrues. If the property is truly worth $360K, then speaking with your lender about getting a small loan to pay off the full amount of the taxes might be another solution and amortize the payments out over a longer period so you can make payments easier.
Lender · Ogallala, NE · Member since 2016 · 8 posts · 2 votes
9y
It should not hurt your credit score. However, if the property has multiple years of tax liens, you will want to maker sure they are paid before they can foreclose on the property. Additionally, the longer you wait on paying them off, the more interest accrues. If the property is truly worth $360K, then speaking with your lender about getting a small loan to pay off the full amount of the taxes might be another solution and amortize the payments out over a longer period so you can make payments easier.
The last thing you want it a tax foreclosure. Taking a property subject to existing liens is not a big deal. I do it all the time. Unlike other liens, tax liens to do "fall off" after a period of time. $15K is a lot (at least to me), but if you plan on renting it out, just take a portion of the proceeds and start paying it down. Most country will cut you some slack if you are actively paying down the outstanding balance. What are you planning on doing with the property?