Can You Get a Mortgage With a State Tax Lien?

Can you get a mortgage with a state tax lien? Are you considering applying for a mortgage but worried about a state tax lien on the property? It’s crucial to understand the impact of these liens and how they can affect your mortgage approval.

State tax liens take priority over mortgages and must be paid off before you can secure a mortgage. However, with the right knowledge and approach, it is possible to navigate this challenge and obtain a mortgage.

In this article, we will explore whether you can get a mortgage with a state tax lien and provide guidance on how to handle this situation effectively.

What is a Tax Lien?

Liens are associated with properties. Let’s talk about their placement, origins, and responsible parties.

The county and state are the entities responsible for attaching these liens, and the primary lien holds precedence over all others on the property. What is the primary lien?

The priority of liens on properties is based on chronological order, in other words, on the time and date they are filed. What was the first lien? The tax lien.

The tax lien was created when the property was initially drawn up and assigned a unique tax number, making it the first lien affixed to the property. This initial lien, regardless of its value, is the primary lien senior to all other liens.

Subsequent liens hold secondary status. They are junior liens in relation to the tax lien.

How Can You Get a Mortgage With a State Tax Lien?

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Does tax debt affect getting a mortgage? Can you get a mortgage with a state tax lien? If you have a state tax lien, it can prevent you from qualifying for a mortgage because state tax liens have priority over mortgages and must be paid before a property can be mortgaged.

If mortgage lenders find a state tax lien, it can raise red flags and make it difficult for you to secure a mortgage. It’s crucial to address any state tax liens before applying for a mortgage to increase your chances of approval. Paying off the tax lien will not only improve your eligibility for a mortgage but also demonstrate financial responsibility to lenders.

Taking the necessary steps to resolve the state tax lien can open up opportunities for you to fulfill your dream of owning a home.

A State Tax Lien’s Impact on Mortgage Approval

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Mortgage lenders perform due diligence and thoroughly check county records, including any existing tax liens. State tax liens are considered first and highest priority liens on a property to ensure the payment of property taxes. To illustrate the impact of state tax liens on mortgage approval, consider the following table:

Scenario Impact on Mortgage Approval
No tax lien Higher chances of approval
Small tax lien Some lenders may approve with certain conditions
Large tax lien Difficulties in obtaining a mortgage
Active payment plan Lenders may consider with additional documentation

To maximize your chances of getting approved for a mortgage, it is crucial to address any state tax liens and work towards resolving them before applying for a mortgage. This can involve paying off the lien in full or setting up a payment plan and demonstrating a consistent payment history. By taking proactive steps to address the tax lien, you can improve your standing with lenders and increase your chances of obtaining a mortgage.

Handling County Tax Liens

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When dealing with tax liens, it’s important to understand the specific processes followed by local governments which have established procedures for handling tax liens on properties.

For a property with a tax lien to be sold, the lien must be paid off before the sale can be completed.

When a property owner fails to pay their property taxes, the government issues a deed to the property, transferring ownership to the government. However, properties with tax liens are redeemable by the owner. This means that if the owner pays off the tax lien during the allotted redemption period, they can regain ownership of the property.

Why Tax Lien Investing is Safe

A tax lien certificate holds a position of priority surpassing that of a mortgage or even the IRS. So when you invest in a tax lien, you’re ensured a sense of safety and security. You’ll either receive your payment or gain ownership of the property unburdened by a mortgage.

How did this system come into being? The foundation of a country’s wealth, when it originated two centuries ago, revolved around land ownership. Today, taxes still remain an obligation tied to real estate.

At the heart of this lies the preeminence of the tax lien. So, if you’re looking for a secure and reliable investment, tax lien investing is an excellent choice. Not only is your investment protected by the property tax code, but with interest rates of 16%, 18%, 24% or 36%, tax lien certificates offer an excellent hedge against inflation.

Frequently Asked Questions

Can you negotiate with the state to lower or remove a tax lien?

Yes, you can negotiate with the state to lower or remove a tax lien. By demonstrating financial hardship or proving the lien is inaccurate, you can work out a payment plan or request a lien withdrawal.

What are the consequences of not paying a state tax lien?

Not paying a state tax lien can have serious consequences. It can lead to penalties, interest charges, and even legal action.

Can you get a mortgage with a state tax lien? Your credit score may be affected, making it difficult to obtain loans or mortgages. It’s crucial to address and resolve tax liens promptly.

Are there any options for financing a property if you cannot obtain a mortgage due to a state tax lien?

How can you get a mortgage with a state tax lien? If you can’t get a mortgage due to a state tax lien, there are still options for financing a property. You can explore alternative lending options like private lenders, hard money loans, or seller financing.


We hope you enjoyed today’s lesson, ” Can You Get a Mortgage With a State Tax Lien?” Congratulations! Now that you understand the impact of state tax liens on obtaining a mortgage, you can take the necessary steps to qualify for one.

While tax liens can pose challenges, it’s not impossible to secure a mortgage. By handling tax liens responsibly and seeking expert advice, you can navigate through the process smoothly.

If you’d like to know more about tax lien investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, personal coaching with certified coaches, and an interactive map and auction calendar research tool that allows you to visit each county online to find the details about upcoming auctions. Start your money-making journey by attending Ted’s 7-Hour foundational training.

Want to earn massive income from bargain real estate investing? Would you like to buy mortgage-free properties for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then get started today with this Free Gift.

Ted Thomas answers can you get a mortgage with a state tax lien

Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.

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The Ted Thomas Difference:
  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in defaulted properties for over 30 years.
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