As you know, tax season is now over and by now you have either filed your taxes or filed for an extension. Some of you may already know but those of you who don’t, when you are getting approved for a mortgage one of the mandatory documents a lender will request is your tax transcripts. Yes, you will most likely provide a copy of your tax returns, especially if you are self-employed, but as a lender we HAVE to request tax transcripts. The disclosure you sign in order for your lender to request them is the 4506-T.
Why is this important?
This is important because underwriters have to see your tax transcripts, especially if you are self-employed. “Why can’t they just use the tax return?” I know it may seem redundant but there really is reason to the madness. If you were to look at a tax return, the forms could be completed by really just anyone, there is no way to know it was your actual return. The only way to confirm your tax return is your tax transcripts which is what the IRS has from your “filed” tax return. Clear as mud?
My point to this is that if you are looking to obtain a mortgage you need to make sure if you have just filed your taxes that the IRS has registered your return. Lately we have had a couple files where the tax transcripts were not yet ready, so this cut it very close for approval time because those are REQUIRED for loan approval (especially if you are self-employed)!
On that note, you must also disclose to your lender if at anytime your tax returns where amended. If you don’t disclose and it was of great importance and would make a difference to your income either positive or negative, then once your transcripts are received it could possibly affect your approval.
Just remember your lender is on your team, they are working for you and helping you achieve the same goal, a home!
Summit Mortgage Corporation