Ingrid B. Quinn

NMLS ID #211652 Arizona, Loan Consultant

Self Employed & Buying a Home?

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Self Employed Tax Return Policies for Obtaining a Mortgage

 

The following information is policy for tax returns required for a loan application during the time of year where current year taxes may have been recently filed and the borrower needs to have the income used for qualification on the mortgage application. 2012 last date to file with an extension is October 19, 2013.

 

Self Employed Borrowers

 

If income from the immediate prior year’s tax returns is needed to qualify, and transcripts are not available, the borrowers must have a CPA prepared and signed tax return and verification that the tax return was filed with the IRS. An exception for CPA prepared tax returns can be made if the borrower has a history of not using a CPA to prepare tax returns.

 

Verification that the tax return was filed with the IRS would include:

 

A letter from the CPA stating that the CPA personally filed the return and confirm the adjusted gross income figure to match the tax return that has been provided (see Affidavit of Filed Tax Returns).

Copies of tax returns stamped “received” by the local IRS office

For self-prepared tax returns (exception described above): other acceptable evidence that the tax returns have been filed such as evidence of electronic filing that also verifies taxes owned or refund due.

 

Additional documentation must be provided to verify that any taxes owed have been paid (e.g. copy of canceled check) or refund due has been received (e.g. copy of bank statement verifying deposit) to match the tax returns provided.

 

Note: If the income has increased by more than 20% over the previous year, transcripts for the current year will be required.

 

In addition a statement from the borrower(s) acknowledging that they will not subsequently amend the returns to negatively impact the income used to qualify is required

 

Amended Tax Returns

 

  • Cobalt Mortgage will not accept amended tax returns filed after the date of application.
  • If amended tax returns have been provided by the borrowers that were filed prior to the date of application, transcripts of those amended returns will be required.

 

For those loans closing after April 15th IRS transcripts for the most recent 2 years will be required. If an extension has been filed with the IRS by the borrower for the immediate preceding year, the two prior years’ transcripts will be required and our Extension policy must also be followed.

For additional information contact Ingrid Quinn at ingrid.quinn@cobaltmortgage.com.

 

Author: ibquinn

I am a Senior Loan Officer at Caliber Home Loans, with over 32 years of Mortgage Banking experience. I have the expertise and knowledge to help focus in on your homeownership goals and make them into reality. My team of experienced mortgage professionals and I can assist you in all steps of the home buying process and ensure that you have a smooth and hassle-free transaction. Caliber cannot accept mortgage loan applications or inquiries for properties located in New York through this site. Ingrid Quinn NMLS #211652 BK#0923637 www.ScottdaleMortgageExpert.com

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