I'm on a payment plan to repay back taxes. Will the underwiter deny me if the balance is too high? It's about 12k

No, provide the formal payment agreement with the IRS and payment will just be reflected in the debts and debt ratio. You will most likely have to provide proof of on time payments.

It has nothing to do with the balance. We will need to include the monthly payment with your other payments as part of your Debt-to-Income Calculation. I've done dozens of loans for borrowers with IRS payments. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we are pending approval in VA, so give us a call. ~ www.ApplyYes.com 480-889-9000.

If you have been in a payment plan with the IRS, and have been making on time payments, then it is OK. We just calculate that payment into your debt ration like any other debt (car loan, etc). It is all about the payment amount, not the balance. I lend in North Dakota, South Dakota, Minnesota Iowa, and Wisconsin. Apply with me at iMortgageJoe.com - Cambria Mortgage, NMLS 274132

Did the debt become a judgement? If not do you have a monthly statement from the IRS and making all payments as agreed?