In 95% of cases in the current Mortgage Loan Underwriting climate, tax returns are needed and not only are they needed, but the 4506-T form (completed by the borrower and allows for the lender/underwriter to have a copy of the transcripts to insure what was provided is what was actually filed) is always required. So, what does this have to do with the borrower? Simply put, loans that are in process now or will be soon, will need to have documentation of the current year's tax return filing in some form in order to close the loan.
The tax deadline is 04/15/2013 for the 2012 tax year and if you have a loan in process that is set to close before the 15th, keep these tips in mind:
- W2 employees
- Provide the 2012 W2 from their current employer
- If taxes have been filed, then proof they were filed will be needed (tax transcripts). If they aren't available then the borrower will need to show they the taxes were electronically received or stamped by the IRS as "officially received".If they haven't filed taxes, then nothing will be needed unless it is after the 15th. If taxes haven't been filed after the 15th, then must provide copy of extension and proof taxes owed have been paid and will need 2011 Tax Transcript.
- Self Employed borrowers
- If taxes have been filed, they need to get 2010 and 2011 transcript as well as povide proof that taxes were submitted (i.e. stamped by IRS, evidence electronic return received, or evidence of refund check received or payment made
- If taxes have not been filed, after the 15th of April, an extension must be provided and any taxes owed must be paid.
So while, only death and taxes are certain. You can now be certain that if you are qualifying for a loan in late February through early April, your new tax return will play a factor in the decision making.