fbpx
Average Rates: 3.6% - 30yr|3.25% - 15yr
for a free quote!

Homestead Financial Mortgage

Let Homestead Financial Mortgage provide you with a stress-free home mortgage or refinance experience! Ask us anything at anytime because it's always #zerotofindout.

5 Tax Return Pointers to Help You Qualify for a Mortgage

For any of us interested in qualifying for a mortgage in the near future you should also pay attention to how we are required to file our tax returns. With April 15th fast approaching, here a some tax return pointers to make sure your return doesn’t keep you from qualifying for a mortgage.

1. Taxes? Ohhh, You Need My Taxes?

Tax Return Pointers to Help You Qualify for a MortgagePart of the new, more conservative mortgage industry is that pretty much all mortgage applications require a great deal more documentation, which includes….2 years worth of our most recent tax returns. Furthermore, each investor has begun to pull tax transcripts from the IRS to make sure the tax return information submitted in the loan application is accurate. So, make sure to file your taxes on time and they are accurate.

2. Oh! That was revenue?

Again, there is no such thing as a stated income mortgage any longer. For those who are self employed, forgetting to call a cash payment revenue won’t help you qualify for a mortgage if you don’t make enough money, so make sure to claim it all.

3. Oh! That’s not a deduction?

If you work from a home office, but write off 100% of your house payment on your schedule c, while still living there, that normally is a bad idea. If, further still, deduct 100% of your interest payment on schedule A with very little income, essentially double dipping the expense, again that might be a bad idea.

Further, if your house payment is $1,500 per month, but your only source of income is your self employed job which you claim you make $500/month, again, that might be a bad idea.

So, be careful about what you write off, especially if you make very little money compared to what type of home and lifestyle you have, which is a suggestion not only for mortgage qualifying, but has other financial considerations.

4. Show your work!

Try not to keep mattress money, opting for putting it conventional accounts, and keep copies of deposits, especially larger deposits, which will show an audit trail.

5. Watch unreimbursed business expenses

This is for any standard employee or person owning a company. If you document $40,000 of income, I suppose you could try to claim $38,000 in expenses that your company didn’t reimburse you for, but it would leave the loan officer trying to qualify you on an income $167/month.

To conclude, know what your income is vs. what is getting claimed and make sure it is reasonable, otherwise, it may mean the difference between getting the mortgage you want or not getting the mortgage at all.